New Florida Law Targets “Frivolous” Lawsuits
On Friday, March 24, Governor Ron DeSantis signed House Bill 837, a companion to Senate Bill 236. This major legislative action will bring about tort reform in the state of Florida. HB 837, titled Civil Remedies, will make substantial changes to the way lawsuits are filed and how they are litigated.
Governor DeSantis claims that this legislation will limit insurance and injury litigation, as well as attorneys’ fees, which will result in fewer frivolous lawsuits in Florida. In general, it will make it more difficult and expensive for injured parties to sue insurance companies. The governor proposed the new law in February, before the 2023 Legislative Session began.
What the Law Mandates
According to the governor’s office, this new law will eliminate one-way attorneys’ fees and fee multipliers, modify the bad faith framework, and ensure that those being sued cannot be held liable if the claimant is more at fault for the injury or accident.
The following are some highlights to keep in mind:
- For general negligence cases, the statute of limitations has been reduced from four years to two years. However, there is a carve-out for construction defects. The statute of limitations remains four years for patent defects and ten years for latent defects.
- The comparative fault statute has been revised. Parties found to be greater than 50 percent at fault for their own harm may not recover any damages.
- Policy limit demands have an additional timeframe of 90 days. Mere negligence is insufficient to create bad faith. The claimant now must act in good faith by providing information and attempting to settle.
- To avoid bad faith, insurers can file interpleader actions and/or submit to binding arbitration on bad faith claims with multiple claimants.
- A loadstar fee is presumed reasonable for attorney fee claims in civil actions. A multiplier will apply only in rare and exceptional cases.
- There are now significant limits on the medical expenses people can collect in cases of negligence, which will hinder the claimants’ ability to inflate medical bills at trial. Evidence of these questionable billing practices is admissible, further limiting recoverable medical treatment damages. Additionally, defendants are now allowed to tell juries if the plaintiff’s attorneys referred their clients to specific doctors and what relationship those doctors had with the attorneys.
- No longer will insurance companies be required to pay attorneys’ fees for the policyholder if the policyholder wins the case.
- When reviewing cases that involve alleged lax security in public places, juries will be instructed to consider the role of criminals in the incident when deciding the level of negligence involved.
How Lawmakers and Lawyers Are Reacting
This legislation has been challenging for Republican lawmakers. Four Republican senators voted against the Senate bill. In addition, three others voted against it in committee, then flip-flopped and supported it on the Senate floor. The uncertainty stems from the fact that the bill is quite broad, and that Florida’s auto and homeowners insurance rates are the highest in the country. The governor and other key Republicans state that fewer lawsuits will result in lower premiums, but others are not so sure. Lawmakers have taken steps to curb lawsuits against property insurance companies in recent years, but rates still rise each year. So some Republicans are worried that the law favor insurance companies too much.
Many Floridians—including doctors, victims of accidents, and even the parents from the Parkland shooting—opposed the legislation and testified before congressional committees. Such testimony led to some lawmakers being even more conflicted.
Some small business owners are concerned that the new law will protect liability insurers from being sued for bad faith. That provision could put businesses at risk if insurers do not settle cases quickly.
In addition, many attorneys specializing in accidents and injuries believe this law will hurt their clients. They envision that some Floridians will have no recourse if they or their family members are injured. They also assert that homeowners will be helpless if their insurance companies lowball settlements or deny their claims altogether.
How the Law Will Impact Floridians
Governor DeSantis explained the reasoning for the new law: “Florida has been considered a judicial hellhole for far too long and we are desperately in need of legal reform that brings us more in line with the rest of the country.” He believes this new law will protect the state economy and its citizens. And many lawmakers also hope it will be a boon to the state.
Time will tell if the law’s provisions actually reduce insurance rates or not. But it is probably safe to say that we will see fewer lawsuits.
If you are unsure how this new law will impact you and your company, do not hesitate to reach out to me at email@example.com or 1.866.303.5868.