Our investigation exposed SC failing to protect injury victims. Now the law is changed

Companies looking to take advantage of vulnerable South Carolinians by paying them quick cash in exchange for future proceeds from lawsuit settlements will now face a much tougher task.

Gov. Henry McMaster signed a comprehensive reform bill Tuesday that protects severely injured accident victims and their families who receive long-term payments because of traumatic brain injuries, and other injuries.

““This is a much needed step to ensure that our most vulnerable South Carolinians are no longer preyed upon by unscrupulous flim-flam artists,” McMaster said in a statement.

The bill, which passed unanimously through both the S.C. Senate and House earlier this year, was filed by Sen. Luke Rankin, R-Horry, in response to an S.C. McClatchy’s investigative series, Cashed Out, published in September. The series detailed how JG Wentworth and other companies like it have for years purchased accident victims’ future structured settlements for immediate lump sums worth an average of about 25% of the sold future payments.

South Carolina’s law governing these transactions requires the deals to be approved by judges, but the law hadn’t been touched since its implementation in 2002, and McClatchy found the companies were often directing the transfers to preferred judges, who offered little scrutiny.

Rankin said he was happy to be part of fixing the issues brought to his attention through McClatchy’s reporting.

“That’s our job in Columbia — to fix problems,” he said.

Attorney Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, had been advocating for the bill’s passage and said it’s rare to see such a consumer protection bill pass so quickly without any legislator opposition.

“It would’ve been embarrassing for the legislature to not come down on this practice after such extensive reporting,” she said. “It shows that sunshine makes a difference.”

Rankin explained that legislators often have to “cut through the fluff” when considering whether issues brought to them warrant a change to the law, but S.C. legislators clearly understood in this case that structured settlement recipients needed more protections.

“This is an example of one where it was clear on its face ... how South Carolina was being played for having no rules to keep predators from re-victimizing victims who otherwise would not be protected,” Rankin told The Sun News.

How has South Carolina’s law changed?

Rankin’s bill adds numerous protections to South Carolina’s structured settlement protection act that were highlighted during McClatchy’s reporting as having been successful in other states.

Changes include requiring an in-person hearing in a court in the county where the seller lives, the purchasing companies must register to do business in South Carolina and the companies must disclose when the proposed seller has previously sold part of their settlement.

“(South Carolina’s bill) picked up on things that really do make a difference, and it builds a brand new structured settlement protection act for the 21st century for SC. It’s really quite impressive,” said Eric Vaughn, executive director of the National Structured Settlement Trade Association, which represents the consultants, attorneys and insurance companies that help set up these settlements.

Vaughn told The Sun News that he was most impressed by the new law giving discretion to judges to appoint attorneys to serve as guardians ad litem during sales involving minors or sellers with known mental or cognitive impairments to act on their behalf.

That’s a rare provision among states’ protection acts, Vaughn noted, with Minnesota being the most recent example to add it before South Carolina. Minnesota changed its law in response to an investigative series by the Star Tribune newspaper, which inspired McClatchy’s investigation in South Carolina.

Berkowitz is currently representing a woman featured in McClatchy’s series who received her structured settlement after suffering a traumatic brain injury in a train crash before selling 30 years worth of those future payments in 17 separate deals.

She told The Sun News that she’s confident the new law would have prevented her client from losing all that money had it been in place at the time.

Rankin agreed that the changes should prevent the abuses previously highlighted by McClatchy from happening in South Carolina in the future.

“We’ve really empowered, by legislative dictate, who, what, when, where and how any future attempt to buy structured settlements has to be handled, which is a 180-degree difference from before the bill was proposed,” he said.

Vaughn said his association plans to use South Carolina’s updated law as an example to emulate in advocating for reform in other states.