International Institute for the Unification of Private Law

I. Brief Introduction of UNIDROIT

The international Institute for the Unification of Private Law, also known as UNIDROIT, set up in 1926 as an auxiliary organ of the League of Nations; the Institute was, following the demise of the League, re-established in 1940 on the basis of a multilateral agreement, the UNIDROIT Statute. Its seat is in Rome, Italy.

UNIDROIT is an independent intergovernmental organization. Its purpose is to study needs and methods for modernizing, harmonizing, and coordinating private international law and in particular commercial law between states, and to draft international Conventions to address the needs. Moreover, UNIDROIT has to prepare gradually for the adoption by the various states of Uniform rules of private law such as preparing draft of law and conventions with the object of establishing uniform internal law, preparing draft of agreement with a view of facilitating international relations in the field of private law, undertaking studies in comparative private law, taking an interest in project already undertaken in any of these fields by other institution with which it may maintain relations as necessary, organizing conferences and publishing works which the institute considers worthy of wide circulation.

What is the organizational structure of Unidroit like? What is the legislative policy of Unidroit? What are the achievements of Unidroit? Does Unidroit play important role in International law?

II. Membership of UNIDROIT

Unidroit member States are drawn from the five continents and represent a variety of different legal, economic and political systems as well as different cultural backgrounds. In order to be a Unidroit member, states have to accede to the Unidroit Statute.

Moreover, the obligation of member states is to pay the premise to support the yearly expenditure relating to the operation and maintenance of the Institute. In particular, the ordinary basic contribution of the Italian Government, the promoter of the Institute, as approved by the Italian Parliament, which that Government declares to be set, as from 1985, at 300 million Italian lire per annum, a figure which may be revised at the end of each period of three years by the law approving the budget of the Italian State, as well as the ordinary annual contributions of the other participating Governments.

Nowadays, there are 61 member states such as Argentina, Austria, Australia, Belgium, Bolivia, Bulgaria, Brazil, Canada, Chile, China, Columbia, Croatia, Cuba, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Holy See, Hungary, India, Iran, Iraq, Ireland, Israel, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Mexico, The Netherlands, Nicaragua, Nigeria, Norway, Pakistan, Paraguay, Poland, Portugal, Republic of Korea, Republic of Serbia, Romania, Russian Federation, San Marino, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Tunisia, Turkey, United Kingdom of Great Britain and Northern Ireland, The United States of America, Uruguay and Venezuela.

III. Organizational Structure of UNIDROIT

Unidroit structured is categorized into six organs, a General Assembly, A president, a Governing Council, a Permanent Committee, an Administrative Tribunal, and a Secretariat. However, the main three-tier organs that play mighty crucial role in UNIDROIT operation are a Secretariat, a Governing Council and a General Assembly.

1. General Assembly

The General Assembly is the ultimate decision making organ of Unidroit. The General Assembly consists of one representative from each of the participating government. The diplomatic representative or persons deputed by the participating member shall accredit to the Italian Government.

The Assembly should be convened in Rome by the president at least once a year to approve the annual accounts of income and expenditure and the budget in ordinary session. The general Assembly has to approve the work program of the Institute on the basis of a proposal by the Governing Council and, in appropriate cases pursuant to paragraph 4 of Article 16, revise by a majority of two thirds of the Members present and voting the resolutions adopted in accordance with paragraph 3 of the said Article 16.

The member of Unidroit is classified into different categories base on the yearly contribution of each country. The classification will be determined by a resolution through 2/3 vote of General Assembly. Also, the classification is concerning with the national income of the country.

Nonetheless, the classification of the member will be revised every 3 years by further resolution. The resolution of the General Assembly adopted in accordance with the classification shall be notified to each participating government by the Italian government.

During a period of one year following the notification, each participating Government may put forward objections against resolutions concerning its classification for consideration at the next session of the General Assembly. The Assembly shall give its decision by means of a resolution, adopted by a majority of two thirds of the Members present and voting, which shall be notified by the Italian Government to the participating Government concerned. The Latter Government shall, however, have the option of withdrawing from membership of the Institute.

The participating government that is arrear in payment the premise more than 2 years, will lose the right to vote in the General Assembly owing to the premise is very important financial support and necessary to operate the work within the organization.

Institute establish a Working Capital Fund in purpose of which is to meet current expenditure, pending the receipt of the contribution payable by the participating government, and to meet unforeseen expenditure. Furthermore, it must deem with Unidroit regulation, and adopted by 2/3 majority vote by the general assembly.

2. Governing Council

The Governing Council supervises all policy aspects of the means by which the Institute’s statutory objectives are to be attained and in particular the Secretariat’s carrying out of the Work Program, the drawing up of which is its responsibility. It is made up of one ex officio member, the President of the Institute, and 25 elected members, typically eminent judges, practitioners, academics and civil servants.

The 25 members are elected, and some may be appointed by the General Assembly, and one other member is chosen from among the judges in office of the International Court of Justice. The president and members of the Governing Council shall hold office for a term of five years which shall be renewable. The president of Governing Council is appointed by the Italian Government In case there is a replacement of membership, a member of Governing Council shall hold office for the remainder of the term of his or her predecessor. The Governing Council shall be convened by the President whenever he or she considers it expedient and in any case at least once a year.
The Governing Council may invite representatives of international institutions or organizations to take part in its meetings, in a consultative capacity, whenever the work of the institute deals with subjects which are the concern of those institutions or organizations.

Any participating Government, as well as any international institutions of an official nature, is entitled to set before the Governing Council proposals for the study of questions relating to the unification, harmonization or coordination of private law. Therefore the Governing Council shall decide any action to be taken on proposals and suggestions made in this way. The Governing Council may refer the study of particular questions to commissions of jurists who have specialized knowledge of those questions. The commissions shall, as far as possible, be presided over by members of the Governing Council. Following the completion of the study of questions in which it has engaged, the Governing Council has to approve any preliminary drafts to be submitted to Governments if appropriate. It shall communicate such drafts to the participating Governments or the institutions or associations which have made proposals or suggestions to it, asking them for their opinion on the expediency and the substance of the provisions. In the light of the answers received, the Governing Council, if appropriate, approves final drafts. It communicates these to the Governments and to the institutions or associations which have made proposals or suggestions to it. The Governing Council shall then consider the steps to be taken to convene a diplomatic Conference to examine the drafts.

3. The Secretariat

The Secretariat is the executive organ of UNIDROIT responsible for the day-to-day carrying out of its Work Program. It is run by a Secretary-General, who is appointed by the Governing Council on the nomination of the President of the Institute. The Secretary-General is assisted by a staff of international civil servants and various ancillary staff.

The Secretariat consists of a Secretary-General appointed by the Governing Council on the nomination of the President, two Deputy Secretaries-General of different nationalities also appointed by the Governing Council, and the officers and employees provided for in the rules governing the administration of the Institute and its internal operations. The Secretary-General and the Deputy Secretaries-General are appointed for a period which shall not exceed five years. They shall be eligible for reappointment. The Secretary-General of the Institute shall be ex officio Secretary of the General Assembly.

The Secretariat welcomes qualified staff from Member States to work or intern who are either required to carry out an internship with an international organization or as part of their university studies or wish to acquire experience within an organization such as UNIDROIT
The official languages are Italian, English, French, German and Spanish.

4. The President

The President is a representative of the institution. Usually, the president is elected by the General Assembly in other international organization, and also the president of Unidroit. The president has no executive power, but the Governing Council. The president has 5 years term.

5. A Permanent Committee

The Permanent Committee shall consist of the President and five members appointed by the Governing Council from among its own members. Members of the Permanent Committee shall hold office for five years and shall be eligible for re-election. The Permanent Committee shall be convened by the President whenever he or she considers it expedient and in any case at least once a year.

6. An Administrative Tribunal

The Administrative Tribunal has jurisdiction to deal with any dispute between the Institute and its officers or employees, or those entitled to claim through them, with particular regard to the interpretation or application of the Staff Regulations. Any dispute arising from contractual relations between the Institute and third parties shall be submitted to the Tribunal, provided that its jurisdiction is expressly recognized by the parties in the contract giving rise to the dispute.
The Tribunal consists of three full members and one substitute, chosen from outside the Institute and preferably of different nationalities. They shall be elected for five years by the General Assembly. Any vacancy on the Tribunal is filled by cooption.

The Tribunal arrives at its decisions, which shall be without appeal, by applying the provisions of the Statute and of the Regulations as well as the general principles of law. It may also decide ex aequo et bono when such power has been given to it by an agreement between the parties. The President of the Tribunal considers that a dispute between the Institute and one of its officers or employees is of very limited importance, he or she may decide it or may entrust the decision to a single judge of the Tribunal by adopting its own rules of procedure.

IV. Legislative Policies

1. Nature of instruments drawn up by UNIDROIT

Unidroit’s basic statutory objective is to prepare modern and where appropriate harmonized uniform rules of private law understood in a broad sense. However, experience has demonstrated the necessity of permitting occasional incursions into public law, especially in areas of law where hard and fast lines of demarcation are difficult to draw or where transactional law and regulatory law are intertwined. Uniform rules prepared by UNIDROIT are concerned with substantive law rules; they will only include uniform conflict of law rules incidentally.

2. Technical approach to harmonization or unification favored by UNIDROIT

Unidroit’s independent status amongst intergovernmental Organizations has enabled it to pursue working methods which have made it a particularly suitable forum for tackling more technical and correspondingly less political issues.

3. Factors determining eligibility of subjects for treatment

New technologies, commercial practices etc. call for new solutions and, where transactions tend to be transnational by their very nature, these should be harmonized, widely acceptable solutions. Generally speaking, the eligibility of a subject for harmonization or even unification will to a large extent be conditional on the perception of States being willing to accept change to their municipal law rules in favor of a new international solution on that subject. Legal and other arguments in favor of harmonization on a subject have accordingly to be weighed carefully against these considerations. Similar considerations will also determine the most appropriate sphere of application to be given to such rules that are whether they should be restricted to truly cross-border situations or relations or extended to cover also purely internal situations or relations.

4. Factors determining choice of instrument to be prepared

The uniform rules drawn up by UNIDROIT have, in keeping with its intergovernmental structure, traditionally tended to take the form of international Conventions, designed to apply automatically in preference to a State’s municipal law upon completion of all the formal requirements of that State’s domestic law for their entry into force. However, the low priority which tends to be accorded by Governments to the implementation of such Conventions and the time it therefore tends to take for them to enter into force have led to the increasing popularity of alternative forms of unification in areas where a binding instrument is not felt to be essential. Such alternatives include model laws which States may take into consideration when drafting domestic legislation on the subject covered or general principles addressed directly to judges, arbitrators and contracting parties who are however left free to decide whether to use them or not. Where the subject is not judged ripe for the drawing up of uniform rules, another alternative consists in the preparation of legal guides, typically on new business techniques, types of transaction or on the framework for the organization of markets both at the domestic and the international level. Generally speaking “hard law” solutions (i.e. Conventions) are needed where rules’ scope transcends the bi-polar relationship underlying ordinary contract law and where third parties’ or public interests are at stake as is the case in the law of property.

V. Working Method

1. Preliminary stage: use of study groups

Once a subject has been entered on Unidroit’s Work Program, the Secretariat, where necessary assisted by experts in the field, will draw up a feasibility study and/or a preliminary comparative law report designed to ascertain the desirability and feasibility of law reform. Where necessary and provided funding is available, an economic impact assessment study is carried out. The report, sometimes including a first rough draft of principles or such uniform rules, will then be laid before the Governing Council which, if satisfied that a case has been made out for taking action, will typically ask the Secretariat to convene a study group, traditionally chaired by a member of the Council, for the preparation of a preliminary draft Convention or one of the alternatives mentioned above. The membership of such study groups, made up of experts sitting in their personal capacity, is a matter for the Secretariat, which seeks to ensure as balanced a representation as possible of the world’s different legal and economic systems and geographic regions.

2. Intergovernmental negotiation stage

A preliminary draft instrument established by a study group will be laid before the Governing Council for approval, and advice as to the most appropriate further steps to be taken. Typically, in the case of a preliminary draft Convention, these will consist in its asking the Secretariat to convene a committee of governmental experts for the finalization of a draft Convention capable of submission for adoption to a diplomatic Conference. In the case of one of the alternatives to a preliminary draft Convention not suitable by virtue of its nature for transmission to a committee of governmental experts, the Council will be called upon to authorize its publication and dissemination by UNIDROIT in the circles for which it has been prepared.

Full participation in UNIDROIT committees of governmental experts is open to representatives of all UNIDROIT member States. The Secretariat may in addition invite such other States as it deems appropriate, notably in view of the subject-matter concerned, and the relevant international Organizations and professional associations to participate as observers. A draft Convention finalized by a committee of governmental experts will then be laid before the Governing Council for approval and advice as to the most appropriate further steps to be taken. Typically, where it judges that the draft Convention reflects a consensus as between the States which have participated in the committee of governmental experts and that it accordingly stands a good chance of adoption at a diplomatic Conference, these steps will consist in its authorization of the draft Convention’s transmission to a diplomatic Conference for adoption as an international Convention. Such a Conference will be convened by one of Unidroit’s member States.

3. Co-operation with other international Organizations

UNIDROIT maintains close ties of co-operation with its sister international Organizations, both intergovernmental and non-governmental, which in many cases take the form of co-operation agreements concluded at inter-Secretariat level.

By reason of its expertise in the international unification of law, UNIDROIT is moreover at times commissioned by such other Organizations to prepare comparative law studies and/or draft Conventions designed to serve as the basis for the preparation and/or finalization of international instruments in those Organizations.

4. Network of correspondents

Unidroit’s ability to obtain up-to-date information on the state of the law in all the various countries is essential to the pursuit of its statutory objectives. This information is sometimes difficult to obtain and UNIDROIT therefore maintains a network of correspondents in both member and non-member States, who are appointed by the Governing Council amongst academic and practicing lawyers.

VI. UNIDROIT Achievements

UNIDROIT has over the years prepared over seventy studies and drafts. Many of these have resulted in international instruments, including the following international Conventions and Model Laws, drawn up by Unidroit and – in the case of Conventions – adopted by a diplomatic Conferences convened by member States of UNIDROIT:

1. 1964 Convention relating to a Uniform Law on the Formation of Contracts for the International Sale of Goods (The Hague);

2. 1964 Convention relating to a Uniform Law on the International Sale of Goods (The Hague);

3. 1970 International Convention on the Travel Contract (Brussels);

4. 1973 Convention providing a Uniform Law on the Form of an International Will (Washington);

5. 1983 Convention on Agency in the International Sale of Goods (Geneva);

6. 1988 UNIDROIT Convention on International Financial Leasing (Ottawa);

7. 1988 UNIDROIT Convention on International Factoring (Ottawa);

8. 1995 UNIDROIT Convention on Stolen or Illegally Exported Cultural Objects (Rome);

9. 2001 Convention on International Interests in Mobile Equipment (Cape Town);

10. 2001 Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment (Cape Town);

11. 2007 Luxembourg Protocol to the Convention on International Interests in Mobile Equipment on Matters specific to Railway Rolling Stock (Luxembourg).

UNIDROIT has prepared:

1. Model Franchise Disclosure Law (2002);

2. Principles of International Commercial Contracts (1994; enlarged edition 2004);

3. Principles of Transnational Civil Procedure (in co-operation with ALI) (2004)
Moreover, UNIDROIT has published:

1. Guide to International Master Franchise Arrangements (1998).

Unidroit’s work has also served as the basis for a number of international instruments adopted under the auspices of other international organizations which are already in force. These include:

1. 1954 Convention for the Protection of Cultural Property in Case of War (adopted under the auspices of UNESCO);

2. 1955 European Convention on Establishment (Council of Europe);

3. 1955 Benelux Treaty on Compulsory Insurance against Civil Liability in respect of Motor Vehicles (Council of Europe);

4. 1956 Convention on the Contract for the International Carriage of Goods by Road (CMR) (UN/ECE);

5. 1958 Convention concerning the recognition and enforcement of decisions relating to maintenance obligations towards children (Hague Conference on Private International Law);

6. 1959 European Convention on Compulsory Insurance against Civil Liability in respect of Motor Vehicles (Council of Europe);

7. 1962 European Convention on the Liability of Hotel-keepers concerning the Property of their Guests (Council of Europe);

8. Protocol No. 1 concerning rights in rem in Inland Navigation Vessels and Protocol No. 2 on Attachment and Forced Sale of Inland Navigation Vessels annexed to the 1965 Convention on the Registration of Inland Navigation Vessels (UN/ECE);

9. 1980 United Nations Convention on Contracts for the International Sale of Goods (UNCITRAL);
VII. Conclusion Remark

In conclusion, Unidroit is a unique intergovernmental organization that responsible to prepare draft of law or international convention. Therefore it plays very important role in private international law because it studies the needs and methods to modernize and harmonize the international private sectors, especially international trade. The conventions, protocols and guides serve as a crucial instrument in legal practice. More importantly, the achievements of Unidroit are the wonderful contribution that this organization involves in helping private persons, private companies to settle their disputes. Also, it is a mechanism to boost the progress and development of international trade and commerce prosperously and peacefully. However, Unidroit can only prepare the draft of law or convention, but it has no execution power to enact the law on their own.

The UK Parliamentary Select Committee Report

The offence of blasphemy, last successfully prosecuted in the UK in 1977, has now been abolished. However, an analysis of the offence is instructive and the history leading up to its abolition will be briefly recounted. Following a 1985 report by the Law Commission, which concluded that the offence should be repealed, and a similar recommendation by the UN Human Rights Committee, in 2002, the House of Lords appointed a Select Committee ‘to consider and report on the law relating to religious offences’. The Report did not offer a conclusion regarding the law of blasphemy, but offered several possible options for reform which will be discussed later. The report, in its approach to religious freedom, mostly encompasses the identity aspect of religious freedom rather than its expres­sive-critical aspect, as will be seen in the following discussion.

In its analysis of the law under the Human Rights Act 1998, the Committee saw in the prohibition a contravention of freedom of expression (Article 10) and of the obligation not to discriminate in the application of the right to religious freedom (Articles 9 to 14). It thus looked at the equality of protection of religious freedom of the members of groups, which the blasphemy laws either did or did not protect. The Report did not consider religious freedom as a critical- expressive right, the religious freedom of the blasphemer, which is impaired by blasphemy laws.

The Select Committee suggested three options for reform the offence of blas­phemy, without choosing between them: ‘leave as is’, repeal, or replace with a broader offence. The reasoning behind each of the approaches reveals more of a community-identity approach than an expressive-critical approach to religious freedom. One reason for the first option, leaving the law unchanged, was that blasphemy law was part of the legal fabric; this reasoning underscores the law’s constitutional heritage and national identity, which should be tampered with only for weighty reasons. This is a viewpoint that sits squarely within the community perception of the right to religious freedom.

Under the reasons in support of the ‘repeal’ option, the Report stressed that the common law offence of blasphemy was discriminatory as it protected only one religion. The Report also stated that the most serious deficiency of the blasphemy offence is that UK courts had interpreted the offence as one of strict liability. The Report did not directly ask, however, whether any offence of blasphemy would be commensurate with respect for religious freedom. An expressive-critical approach would raise this question and answer it by noting that a blasphemy offence is incommensurate with the right to religious freedom.

Under the option of replacement of the offence with a broader, non-discriminatory provision, the Report suggested the use of the Indian Penal Code provisions as a starting point, particularly Article 295A, which states:

Whoever, with deliberate and malicious intention of outraging the religious feelings of any class of citizens of India, by words, either spoken or written, or by signs or by visible representations or otherwise, insults or attempts to insult the religion or religious beliefs of that class, shall be punished with imprison­ment… or with a fine, or with both.

The Indian Supreme Court viewed this Article as commensurate with the Indian Constitution’s provisions of freedom of speech and freedom of religion. The Indian approach, as the Report itself noted, is based on the uppermost con­sideration of preventing religious strife in a particular political context. The Report envisioned problems with such a law, namely potential misuse for political prose­cutions (which it did, however, see as unlikely to occur in the UK) and the difficulty of defining hurt to religious feelings.

Yet the more basic objection should stem from a view of religious freedom that sees the value of this right in the freedom to criticize and debate issues of religion and belief. Even deliberately insulting speech is not necessarily without merit; some effective conveying of religious ideas for and against religions is deliberately provocative and insulting. There is, however, speech that effectively silences, through propagation of hate or intimidation, members of a religious group from expressing their own voice and enjoying their rights as equal citizens. This speech should be more narrowly defined and is better addressed through prohibitions on hate speech.

South Carolina’s Whistleblower Protections – A Review for SC Attorneys, Lawyers & Law Firms

South Carolina whistleblowers who are employed by a South Carolina state government agency are protected from adverse employment actions when they timely report violations of state or federal laws or regulations or other wrongdoing. South Carolina attorneys, lawyers and law firms who represent SC state government whistleblowers should be aware of the protections afforded to these employees who are fired, demoted, suspended or otherwise subjected to an adverse action in reaction to a report of fraud or other wrongdoing by a public agency or one of its officers or employees. South Carolina whistleblower attorneys, lawyers and law firms should also be aware of the administrative requirements necessary to invoke the protections of the state’s anti-retaliation statute, as well as the relief provisions afforded to such SC whistleblowers. There are also some whistleblower protections for government and private employees who report violations of South Carolina’s occupational safety and health statutes, rules or regulations.

South Carolina’s Whistleblower Protection Act for State Government Employees

South Carolina’s General Assembly enacted legislation called the “Employment Protection for Reports of Violations of State or Federal Law or Regulation” (the “Act”) to protect South Carolina state employees from retaliation or disciplinary actions when they report violations of state or federal laws or regulations or other wrongdoing including fraud and abuse. See South Carolina Code § 8-27-10, et seq. The Act prohibits a South Carolina public body from decreasing the compensation of, or dismissing, suspending or demoting, a state employee based on the employee’s filing of a protected report of wrongdoing with an appropriate authority. S.C. Code § 8-27-20(A). The protected report must be made by the SC whistleblower in good faith and not be a mere technical violation. Id. The Act does not apply to private, non-government employers or employees. S.C. Code § 8-27-50.

A public body under the Act means one of the following South Carolina entities: (A) a department of the State; (B) a state board, commission, committee, agency, or authority; (C) a public or governmental body or political subdivision of the State, including counties, municipalities, school districts, or special purpose or public service districts; (D) an organization, corporation, or agency supported in whole or in part by public funds or expending public funds; or, (E) a quasi-governmental body of the State and its political subdivisions. S.C. Code § 8-27-10(1).

A South Carolina employee under the Act is an employee of any South Carolina public body entity, generally excluding those state executives whose appointment or employment is subject to Senate confirmation. S.C. Code § 8-27-10(2).

An appropriate authority under the Act means either (A) the public body that employs the whistleblower making the protected report, or (B) a federal, state, or local governmental body, agency, or organization having jurisdiction over criminal law enforcement, regulatory violations, professional conduct or ethics, or wrongdoing, including but not limited to, the South Carolina Law Enforcement Division (“SLED”), a County Solicitor’s Office, the State Ethics Commission, the State Auditor, the Legislative Audit Council (the “LAC”), and the Office of Attorney General (the “SCAG”). S.C. Code § 8-27-10(3). When a protected report is made to an entity other than the public body employing the whistleblower making the report, the Act requires that the employing public body be notified as soon as practicable by the entity that received the report. Id.

A SC whistleblower employee’s protected report under the Act is a written document alleging waste or wrongdoing which is made within sixty (60) days of the date the reporting employee first learns of the alleged wrongdoing, and which includes (a) the date of disclosure; (b) the name of the employee making the report; and, (c) the nature of the wrongdoing and the date or range of dates on which the wrongdoing allegedly occurred. S.C. Code § 8-27-10(4).

Pursuant to the Act, a reportable wrongdoing is any action by a public body which results in substantial abuse, misuse, destruction, or loss of substantial public funds or public resources, including allegations that a public employee has intentionally violated federal or state statutory law or regulations or other political subdivision ordinances or regulations or a code of ethics, S.C. Code § 8-27-10(5). A violation which is merely technical or of a de minimus nature is not a “wrongdoing” under the Act. Id.

Rewards for SC Whistleblowers

When a SC state employee blows the whistle on fraudulent or abusive acts or violations of federal, state or local laws, rules or regulations, and the protected report results in savings of public funds for the state of South Carolina, the whistleblower is entitled to a reward or bounty under the Act. However, the reward is extremely limited. The provisions of the Act provide that a SC whistleblower is entitled to the lesser of Two Thousand Dollars ($2,000) or twenty-five percent (25%) of the estimated money saved by the state in the first year of the whistleblowing employee’s report. The South Carolina State Budget and Control Board determines the amount of the monetary reward that is to be paid to the employee who is eligible for the reward as a result of filing a protected report. See S.C. Code § 8-27-20(B). This reward is very meager when compared to the bounty provisions of the federal False Claims Act, 31 U.S.C. §§ 3729-3732 (the “FCA”). The FCA allows a qui tam whistleblower or relator to receive up to 30% of the total amount of the government’s recovery against defendants who have made false and fraudulent claims for payment to the United States. Some recent federal FCA recoveries by the U.S. Department of Justice have exceeded $1 Billion Dollars.

However, the Act does not supersede the State Employee Suggestion Program, and if a whistleblower employee’s agency participates in the State Employee Suggestion Program, then items identified as involving “wrongdoing” must be referred as a suggestion to the program by the employee. A South Carolina government employee is entitled to only one reward either under the Act or under the State Employee Suggestion Program, at the employee’s option. Id.

Civil Remedies for SC Whistleblowers

If a South Carolina government employee suffers an adverse action related to employment within one (1) year after having timely filed a protected report which alleged wrongdoing, the employee may institute a non-jury civil action against the public body employer after exhausting all available grievance or other administrative remedies, and such grievance/administrative proceedings have resulted in a finding that the employee would not have been disciplined but for the reporting of alleged wrongdoing. S.C. Code § 8-27-30(A). The adverse action or retaliations can include is dismissal, suspension from employment, demotion, or a decrease in whistleblower’s compensation. The statutory remedies under the Act that the adversely effected employee may recover are (1) reinstatement to his or her former employment position; (2) lost wages; (3) actual damages not to exceed Fifteen Thousand Dollars ($15,000); and (4) reasonable attorney fees as determined by the court. Id. However, an award of attorney’s fees has a cap under the Act, and may not exceed Ten Thousand Dollars ($10,000) for any trial and Five Thousand Dollars ($5,000) for any appeal. Id.

At least one court has addressed the Act’s remedies with respect to a whistleblower employee. In Lawson v. South Carolina Department of Corrections, 340 S.C. 346, 532 S.E.2d 259 (2000), the S.C. Supreme Court held that when a whistleblower employee is limited to a recovery under the statutory remedies of the Act when the employee alleges a wrongful discharge only on the grounds of his whistleblowing. In Lawson, the court granted summary judgment against the employee because he could not point to a violation of any policy, ethics rule, or other regulation as a basis for his whistleblower action which amounted to “wrongdoing” under the Act. Id.

Adverse Actions Based Upon Causes Independent of a Protected Report

In the event the appropriate authority which received the report determines the whistleblower employee’s report is unfounded or a mere technical violation and is not made in good faith, the public body may take disciplinary action including termination and, notwithstanding the filing of a report, a public body may dismiss, suspend, demote, or decrease the compensation of an employee for causes independent of the filing of a protected report. Id. A South Carolina public body may also impose disciplinary sanctions against any direct line supervisory employees who retaliate against another employee for having filed a good faith report.

Statute of Limitations

Under the Act, a whistleblower’s civil action must be commenced within one (1) year after the accrual of the cause of action or exhaustion of all available grievance or other administrative and judicial remedies, or such a lawsuit is forever barred. S.C. Code § 8-27-30(B).

Occupational Safety and Health Act (“OSHA”) Whistleblower Protections

South Carolina has a separate whistleblower protection statute for employees who report violations of statutes, rules or regulations regarding occupational safety and health. S.C. Code § 41-15-510. The protected activities include filing a complaint, instituting a proceeding, or testifying about OSHA violations. Any employee who has been discharged or otherwise discriminated against by any person in violation of Section 41-15-510 has the right to file a complaint with the South Carolina Commission of Labor alleging such discrimination. The SC Labor Commissioner shall cause investigation to be made as he or she deems appropriate, and, if the Commissioner determines that anti-discrimination provisions of Section 41-15-510 have been violated, he must institute a law suit in the appropriate court of common pleas against such discriminating person or entity. In any such action, the court of common pleas has injunctive authority to restrain such OSHA anti-discrimination violations, as well as authority to order all appropriate relief including rehiring or reinstatement of employee to his or her former position with back pay. S.C. Code § 41-15-520. Unlike the Act, the OSHA whistleblower protections are available to state government and private employees.

Conclusion

South Carolina whistleblowers who are employed by a South Carolina state government agency are protected from adverse employment actions when they timely report violations of state or federal laws or regulations or other wrongdoing. South Carolina attorneys, lawyers and law firms who represent SC state government whistleblowers need to know the protections afforded to these employees who are fired, demoted, suspended or otherwise subjected to an adverse action in reaction to a report of fraud or other wrongdoing by a public agency or one of its officers or employees. South Carolina whistleblower attorneys, lawyers and law firms should review the administrative requirements necessary to invoke the protections of the state’s anti-retaliation statute, the statutes of limitations, as well as the remedial provisions afforded to such SC state government whistleblowers, in order to properly advise such clients. So too, the employment attorney should be aware of the rights and remedies of both private and South Carolina government employees who blow the whistle of violations of state OSHA statutes, rules or regulations.

© 2010 Joseph P. Griffith, Jr.