- House Bill 837, a tort reform package that would make it harder for Floridians to take legal action against insurance companies, has reached Gov. Ron DeSantis’ desk, who is expected to sign it into law.
- The bill includes provisions that would impact the state’s litigation environment, such as altering the comparative negligence system, providing clearer standards for calculating medical damages, and introducing modifications to the framework that holds insurance companies accountable.
- The bill limits attorneys’ contingency fee multiplier, reduces the statute of limitations for general negligence cases, and introduces a presumption against negligent security liability in specific situations.
House Bill 837, a major legislative package that would enact tort reform in Florida, has reached the desk of Gov. Ron DeSantis, with an anticipation that he will soon sign off on the measure.
The bill, which seeks to impose limitations on lawsuits to make it more difficult for Floridians to take legal action against insurance companies, includes several provisions, that if adopted, would impact the state’s litigation environment.
The legislation, upon adoption, would alter Florida’s comparative negligence system – which determines fault in personal injury cases – by introducing a “modified” system. Under the new system, plaintiffs who are mostly responsible for their own injuries won’t be able to recover damages from others as easily, except for medical negligence cases. The bill also aims to provide clearer standards for calculating medical damages in personal injury and wrongful death cases.
Additionally, the bill introduces modifications to Florida’s “bad faith” framework, which holds insurance companies accountable for acting “unfairly” towards their policyholders. The new law allows insurers to avoid third-party bad faith liability if they pay out the policy limits or the amount demanded by the claimant within 120 days of receiving notice of the claim.
It also limits the circumstances under which attorneys can charge a contingency fee multiplier, reduces the statute of limitations for general negligence cases from four to two years, and introduces a presumption against negligent security liability in specific situations.
Verdicts in negligence cases “will be fairer,” according to House Speaker Paul Renner, as fault assessment will be tweaked and juries will be provided with more details in medical cases.
“We have by far the highest property insurance in the country. We also have, depending on who you ask, one of the highest auto insurance rates in the country,” said Renner. “There’s no doubt that by trying to reach balance in our litigation climate, we will allow for affordability to be brought to all Floridians.”
DeSantis, who pledged immediate support when the bill was first introduced by the legislature, cited a statistic during a recent press conference showing that Florida accounted for eight percent of all property insurance claims nationally, but 80 percent of property insurance litigation.
Business advocates backed the House bill as it progressed through the legislative process, including President of the Florida Chamber of Commerce Mark Wilson, who remarked that frivolous lawsuits are driving up the costs of doing business in the state.
“Florida has a lot of things going right for it, but we also have the fifth-worst legal climate in the United States, and that’s making everything more expensive,” said Wilson. “We have more billboards in Florida telling you to sue someone than any country on the planet, let alone any other state, and the lawyers on those billboards are making your food more expensive, your gas more expensive, and your insurance cost more. That’s why the Florida Chamber is here to support common sense game-changing relief”
According to information provided by Citizens Against Lawsuit Abuse, excessive tort costs wipe out billions of dollars of economic activity on an annual basis. In 2021, there were 100,595 lawsuits in Florida resulting in $7.8 billion in damages, while there were 24,700 lawsuits nationally that yielded $2.4 billion in damages across the same timeframe.
In a special session late last year, the Florida Legislature approved legislation to address the ongoing property insurance crisis, which was partially spurred by excessive lawsuits.
Senate Bill 2D, signed during a December special session, sought to reduce frivolous litigation through the enactment of similar regulatory changes, like reserving attorney fee multipliers, requiring proof that an insurer breached its agreement with a policyholder before a lawsuit can be filed, and preventing insureds from transferring their unilateral right to receive attorneys’ fees to contractors.
Within the last two years, at least eight policy writers have exited the Florida market, oftentimes citing a volatile market and heightened levels of risk due to worsening storm seasons and aging infrastructure.