You're representing a maritime worker in South Carolina. The case looks straightforward until you discover the third party is a government entity.
Suddenly, your client's potential recovery hits the $300,000 damage cap under the South Carolina Tort Claims Act.
Your client's longshore benefits already exceed that amount. The insurance carrier demands every dollar of the third-party recovery.
Your client gets nothing. You dismiss the case.
The Math That Doesn't Work
The longshore insurance carrier claims a dollar-for-dollar credit against any third-party recovery. When government entities are involved, this creates impossible mathematics.
Consider a recent case involving the Port of South Carolina. The injured worker's longshore damages exceeded $300,000. The government entity's liability was capped at exactly $300,000.
The carrier demanded the entire recovery. The client would receive zero compensation from the third-party case.
The strategic decision was stark: dismiss the case entirely.
The carrier gets nothing. The client gets nothing. Nobody wins.
Three Decades of Practice Overturned
For nearly 30 years, longshore carriers and maritime attorneys operated under an understood framework. Carriers would typically accept half the recovery after attorney fees and costs.
This course of dealing created predictable outcomes. Clients received meaningful compensation. Carriers recovered substantial portions of their payments.
That precedent vanished overnight.
The carrier's new position represents what one experienced maritime attorney calls "mutually assured destruction." When carriers demand everything, they often receive nothing.
The inflexible stance eliminates the very recovery they seek to capture.
Strategic Implications for Maritime Practice
This shift fundamentally alters how attorneys evaluate longshore cases involving government entities. The traditional cost-benefit analysis no longer applies.
Previously, attorneys could counsel clients about realistic recovery expectations. Split recoveries provided value for injured workers while satisfying carrier subrogation rights.
Now, attorneys must warn clients upfront that their third-party case may not be viable due to carrier positioning.
The practical effect extends beyond individual cases. Maritime attorneys are reconsidering whether to pursue third-party claims against government entities when recovery amounts fall within the tort claims cap.
Client counseling now includes discussions about case viability based on subrogation positioning rather than just liability and damages.
The Federal-State Collision
The Longshore and Harbor Workers' Compensation Act creates federal rights that collide with state damage limitations. This intersection has always created complexity.
South Carolina's $300,000 cap remains fixed regardless of actual damages or jury verdicts. Legislative efforts to increase these limits to $500,000 per person have stalled.
Meanwhile, longshore carriers are asserting increasingly aggressive positions on subrogation recovery. The federal framework gives them substantial leverage over state court proceedings.
The result is a legal environment where traditional negotiation practices are being abandoned.
Practical Considerations Moving Forward
Maritime attorneys must now factor carrier behavior into initial case evaluations. The question isn't just whether liability exists or damages are substantial.
The critical analysis becomes: will the carrier's subrogation position eliminate meaningful client recovery?
This requires understanding each carrier's current approach to subrogation liens. Some maintain traditional negotiation practices. Others have adopted the all-or-nothing stance.
Case selection now depends as much on carrier identity as on legal merits.
Attorneys must also consider timing strategies. Early engagement with carriers about subrogation positions can prevent wasted resources on unviable cases.
The alternative is discovering the carrier's inflexible position after significant case development, forcing difficult conversations with clients about dismissing cases they expected to provide recovery.
The New Reality
The maritime legal community is witnessing a fundamental shift in how longshore subrogation operates in South Carolina. Carriers are testing new approaches that prioritize maximum recovery over negotiated settlements.
Whether this represents a permanent change or a temporary aggressive stance remains unclear. The impact on injured maritime workers is immediate and significant.
Attorneys must adapt their practices to this new reality while continuing to advocate effectively for their clients.
The challenge is maintaining zealous advocacy within a framework where traditional recovery mechanisms are being systematically eliminated by carrier positioning.
For maritime workers in South Carolina, the message is clear: your third-party recovery rights exist within an increasingly complex web of federal and state laws where insurance carrier strategy may determine whether those rights have any practical value.
