SC nears adding protections for injury victims’ money. Will our investigation spur change?

South Carolina legislators are quickly pushing a bill aimed at protecting vulnerable residents’ financial futures toward final passage in the closing days of their current session.

The bill, filed by Sen. Luke Rankin, R-Horry came in response to McClatchy’s investigative series, Cashed Out, which detailed how JG Wentworth and other companies have for years been purchasing accident victims’ future structured settlements for immediate lump sums, often for pennies on the dollar.

South Carolina’s law governing these transactions has been untouched since its implementation in 2002 despite other states adding additional protections in recent years.

But South Carolina is now close to following suit, if the bill to comprehensively reform the state’s Structured Settlement Protection Act can pass the full House in time.

The bill unanimously passed the Senate at the end of February and cleared the House Labor, Commerce and Industry Committee with minimal discussion Tuesday. The House unanimously approved the bill Thursday on second reading and is scheduled to be read for the third and final time Friday. After ratification by the House and Senate, the bill is expected to head to Gov. Henry McMaster’s desk, but that will need to happen quickly since the current session is scheduled to end May 11.

Attorney Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, has been advocating for the bill’s passage and told McClatchy Tuesday she’s cautiously optimistic it gets to the governor in time.

“I’m really glad the legislature has recognized that this is a problem that needs to be solved,” she said.

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.

“Our hope is this bill makes sure nothing like this ever happens again,” she said.

Rankin, chairman of the Senate Judiciary Committee, has credited McClatchy’s reporting for exposing how South Carolina has “effectively become the playground” for the companies, known as structured settlement factoring companies, that purchase accident victims’ future payments.

S.C. Chief Justice Donald Beatty previously signed an order, in response to the newspaper’s findings, restricting these deals from being heard by master-in-equity judges or special referees, who are private attorneys appointed to act as judges in certain cases.

Judges are required to sign off on these transactions, per state law, but McClatchy found the companies were often directing the transfers to preferred judges, who offered little scrutiny.

Beatty’s order, as well an increase in public attention, led to a sharp decrease in judges approving the structured settlement deals, according to previous McClatchy reporting.

Rankin’s bill would essentially turn Beatty’s temporary order into law, in addition to several other changes that would restrict judge shopping and offer more protections for sellers with known mental or cognitive impairments.

Note: This story has been updated to reflect the vote of the full S.C. House on Thursday.