Judicial Overreach In South Carolina Asbestos Cases Draws National Scrutiny

Judicial Overreach In South Carolina Asbestos Cases Draws National Scrutiny

Press Releases | December 10, 2024

Controversial Receivership Practices and Inflated Verdicts Raise Concerns

Today, the American Tort Reform Foundation released its 2024-2025 “Judicial Hellholes®” report, revealing its third-worst “Judicial Hellhole®” in the country: South Carolina’s asbestos litigation.

Judge Jean Toal, the former South Carolina Supreme Court justice who oversees the state’s asbestos docket, received a rebuke last month from the U.K.’s High Court of Justice due to her aggressive tactics.

Local trial lawyer Peter Protopapas’s appointment by Judge Toal as a “receiver” at least 21 times for both defunct domestic and active foreign companies, raises serious concerns about transparency and accountability. ATRF says this tactic is not used elsewhere, making the state an outlier by appointing receivers in asbestos litigation.

This strategy led to an international legal challenge this year after she appointed Protopapas as a receiver for a U.K. based company, Cape plc, granting broad powers to sue third parties despite questions of jurisdiction. In November, the British court issued an injunction prohibiting Protopapas from acting or purporting to act as a receiver for Cape, stating that Protopapas had committed the tort of acting as an “imposter.”

“Judge Toal’s unprecedented use of receiverships in South Carolina’s asbestos litigation has created a lucrative system for a select few,” Tiger Joyce, president of the American Tort Reform Association said.

This practice recently came to light and creates a system where a small group of lawyers generates substantial fees while undermining fair judicial processes. For example, in one litigation involving Covil Corp., settlements exceeded $50 million, with Protopapas authorized to retain one-third as a contingency fee.

Through this setup, the receiver controls millions in settlements through secretive “qualified settlement funds” in Delaware. The creation of these “qualified settlement funds,” operating under Judge Toal’s orders, has allowed millions in asbestos settlements to flow outside of public scrutiny.

ATRF’s report further notes that South Carolina’s Republican House Speaker, G. Murrell Smith, also provides legal representation to the receiver, Protopapas, in cases for which he is the appointed receiver. The House Speaker also appoints five members to the state’s 11-member Judicial Merit Selection Commission.

“This opaque system raises serious questions about transparency and fairness, further highlighting the deep-rooted conflicts of interest within the state’s judicial selection process,” Joyce said. “Unfortunately, the legislature elects most judges and South Carolina’s Speaker of the House financially benefits from the current system.”

According to a recent report, South Carolinians pay $820 every year in an annual “tort tax,” while nearly 40,000 jobs are lost each year due to excessive tort costs.

“The consequences of this Judicial Hellhole® ranking extend beyond legal jargon; they affect real lives,” Joyce said. “When we allow our legal system to be manipulated for financial gain, it erodes public trust and leaves citizens questioning fairness. South Carolinians deserve a judicial system that works for the entire citizenship – not just a few well-connected politicos and lawyers.”

The full Judicial Hellholes report and rankings are available at JudicialHellholes.org.