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Florida Passes Tort Reform: What You Need to Know

On March 24, 2023, Florida Governor Ron DeSantis signed House Bill 837, “Civil Remedies,” into law. HB 837 contains sweeping tort reform that will uproot the landscape of Florida civil litigation. The changes apply to causes of action accruing after the effective date—March 24, 2023. Prior to the bill becoming law, plaintiffs’ firms, anticipating this monumental change, filed approximately 100,000 lawsuits. These filings represent approximately 77% of the total cases filed since January 1, 2023.[1] Below is a brief summary of the changes and the potential impact the new law brings.    NEW MODIFIED COMPARATIVE NEGLIGENCE STANDARD    HB 837 changes Florida’s standard from “pure” comparative negligence to “modified” comparative negligence. This aligns Florida with a majority of the other states who have already adopted a “modified” comparative negligence standard. This new standard does not apply in medical negligence actions.   Previously, a plaintiff was entitled to recover a percentage of damages proportionate to the degree of fault of the defendant. Under “modified” comparative negligence, if a plaintiff is more negligent than the defendant, the plaintiff cannot recover.    This new standard will likely reduce the number of cases brought in which the plaintiff was the predominant cause of his or her own harm.    TWO-YEAR STATUTE OF LIMITATIONS FOR GENERAL NEGLIGENCE CLAIMS   HB 837 amends section 95.11, Florida Statutes, which sets forth the statutes of limitations for various causes of action. The bill now reduces the statute of limitations for general negligence from four years to two years.    This may encourage plaintiffs to file suit earlier as plaintiffs and their counsel will prepare their cause of action and evaluate the validity of their claims at an earlier juncture. This will also increase the ability to obtain evidence closer to the time of the alleged incident.    Where liability is contested, plaintiffs may be deterred from filing suit sooner. The two-year statute of limitations could also be used as leverage to effectuate earlier settlement and resolution of claims, especially pre-suit.    ADMISSIBILITY OF EVIDENCE IN PAST AND FUTURE MEDICAL EXPENSES    HB 837 changes the evidence that plaintiffs can introduce to establish past and future medical expenses. Previously, with the exception of services paid by Medicare or Medicaid, plaintiffs were permitted to board the full amount of medical bills charged for services rendered. This was without evidence of any adjustments or reductions and was prior to a post-verdict setoff for adjustments by private insurance. If plaintiffs had Medicare or Medicaid, only the amounts actually paid by Medicare or Medicaid were admissible as evidence of past medical expenses.    Now, the evidence offered to prove the amount of damages for past medical bills that have been satisfied is limited to the evidence of the amount actually paid, regardless of the source of payment. For unpaid past medical bills, admissible evidence will depend whether the plaintiff has health care coverage, Medicare, or Medicaid:    •    If plaintiff has health care coverage but obtains treatment under letter of protection or does not submit charges, evidence of amount that health care coverage would have paid to satisfy charges, plus plaintiff’s share of medical expenses, is admissible. Evidence of reasonable amounts that were billed to plaintiff for medically-necessary treatment or services is also admissible.  •    If plaintiff does not have insurance, or has Medicare or Medicaid, evidence of 120 percent of Medicare reimbursement rate in effect is admissible.  •    If there is no applicable Medicare rate, evidence admissible is 170 percent of applicable state Medicaid rate.    Damages that may be recovered may not include any amount in excess of the evidence of medical treatment and services expenses admitted. Further, it cannot exceed the sum of amounts actually paid, amounts necessary to satisfy charges due and owing, and the amounts necessary for reasonable and necessary future medical treatment and services.    For future medical bills, the “usual and customary” amount also depends on whether the plaintiff has health care coverage:    •    If plaintiff has health care coverage other than Medicare or Medicaid, evidence of amount that could be satisfied if charges were submitted, in addition to portion of medical expenses under insurance contract, is admissible.  •    If plaintiff does not have insurance, or has Medicare or Medicaid, evidence of 120 percent of Medicare reimbursement rate in effect is admissible.  •    If there is no applicable Medicare rate, evidence admissible is 170 percent of applicable state Medicaid rate.    LETTERS OF PROTECTION AND REFERRALS MUST BE DISCLOSED    If a plaintiff treats under a letter of protection, the letter of protection must be disclosed, as must all bills for medical expenses, which must be itemized and coded. Whether the plaintiff was referred for treatment under the letter of protection must also be disclosed, along with who referred the plaintiff. If the plaintiff is referred for treatment under a letter of protection by their attorney, disclosure of the referral is permitted, notwithstanding the attorney-client privilege, as the financial relationship between the law firm and the medical provider is relevant to the issue of bias of the testifying medical provider. This new law overturns the Florida Supreme Court’s decision in Worley v. Central Florida Young Men’s Christian Ass’n, Inc. , 228 So. 2d 18 (Fla. 2017).    BAD FAITH – NEW DUTY OF INSUREDS AND IMPACT ON DAMAGES    Now, in every bad faith action in Florida, the insured, claimant, and/or their representative have a duty to act in good faith in providing information, making demands, setting deadlines, and attempting to settle the claim. The trier of fact may consider whether the insured, claimant and/or their representative acted in good faith and may reasonably reduce the amount of damages awarded. Mere negligence remains insufficient to bring a claim for bad faith against an insurer.   BAD FAITH – CHANGES TO 90-DAY PERIOD, ADMISSIBILITY, AND STATUTE OF LIMITATIONS     No bad faith action can lie if an insurer tenders the lesser of the policy limits or the amount demanded by the plaintiff within 90 days after receiving actual notice of the claim and sufficient evidence supporting the claim. It is not bad faith if the insurer does not tender, and the existence of the 90 days is inadmissible in any action seeking bad faith. Should the insurer not tender, the statute of limitations is extended for an additional 90 days.    BAD FAITH – WHEN INSURER IS NOT LIABLE FOR FAILURE TO PAY POLICY LIMITS FOR MULTIPLE CLAIMS EXCEEDING LIMITS    If multiple claims arising out of a single occurrence exceed the policy limits, the insurer is not liable beyond the policy limits for failure to pay any or all of the policy limits within 90 days if:   •    The insurer files an interpleader to determine rights of claims, and if found in excess of policy limits, claimants are entitled to a prorated share; or  •    The insurer makes full policy limits available at binding arbitration, in which claimants are entitled to a pro rata share of policy limits as determined by the arbitrator, who must also consider comparative fault and the likely outcome of trial. If a claim is resolved by the arbitrator, a general release must be executed by the claimant to the insured party whose claim is resolved.    NEGLIGENT SECURITY – NEW PRESUMPTION AGAINST LIABILITY AND CONSIDERATION OF FAULT OF ALL PARTIES   In a negligent security action against the owner or operator of real property by a person lawfully on the property who was harmed by the criminal act of a third party, the trier of fact is now required to consider the fault of all persons who contributed to the injury or death, including the criminal actor. Moreover, the owner or operator of the property cannot be held negligent for damages to a third party attempting to commit, or engaged in committing, any criminal act on the property.    HB 837 also creates a presumption against negligent security liability for the owner or operator of a “multifamily residential property” if the burden of proof is met to demonstrate “substantial compliance” with crime assessments, crime and safety training for employees, and safety and security measures which include:   •    Security camera system at points of exit and entry that maintains the video retrievable for 30 days;  •    A lighted parking lot from dusk to dawn;  •    Lighting in common areas, porches, walkways, and laundry rooms from dusk to dawn;  •    A deadbolt measuring at least one inch in every door;  •    Locking devices on every window and sliding door;  •    Locked gates at pool fence areas; and  •    A peephole or viewer on door that does not have a window or window next to the door.    CONTINGENCY FEE MULTIPLIER – NEW LODESTAR FEE PRESUMPTION   Previously, Florida case law allowed for courts to consider and award contingency fee multipliers to attorneys’ fees, based on factors which included but were not limited to: the relevant market if contingency fee multipliers were required to obtain competent counsel; whether the attorney mitigated the risk of nonpayment; the amount involved, the results obtained, the type of fee arrangement between the attorney and client; and likelihood of success at the outset of the action.    HB 837 now changes the ability to obtain a contingency fee multiplier by creating a “strong presumption” that the “lodestar” fee, the number of hours which would have reasonably been spent by an attorney and multiplying that number by a reasonable hourly rate, is sufficient and reasonable. This can only be overcome in rare and exceptional circumstances in which evidence has been presented that competent counsel could otherwise not have been retained.    ONE-WAY ATTORNEYS’ FEES – LIMITED APPLICABILITY     Previously, “one-way attorneys’ fees” applied in situations in which an insured prevailed in an action against an insurer. One-way attorneys’ fees in insurance cases now only apply to declaratory judgment actions for the determination of insurance coverage against an insurer after a denial of coverage of a claim, which does not include a defense under a reservation of rights. If a declaratory judgment is granted in favor of the insured against the insurer, the court shall award reasonable attorneys' fees, which are limited to those incurred in the action.    Further, section 768.79, Florida Statutes, also known as the “offer of judgment” or “proposal for judgment” statute, will apply to any civil action involving an insurance contract.   ______________________________________________  

[1] Ron Hurtibise, Civil Case Filings Surge Before DeSantis Signed Sweeping Lawsuit Reform Bill , SUN-SENTINEL, (March 24, 2023, 6:55 p.m.), https://www.sun-sentinel.com/news/politics/fl-bz-case-filing-surge-before-tort-reform-20230324-7ze7uzxslbcndcaaessd4bmgzy-story.html .

The material in this law alert has been prepared for our readers by Marshall Dennehey. It is solely intended to provide information on recent legal developments and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We welcome the opportunity to provide such legal assistance as you require on this and other subjects. If you receive the alerts in error, please send a note to [email protected] . ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2023 Marshall Dennehey. All Rights Reserved.

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The Current State of Assignment of Benefits Litigation in Florida

By: Senior Counsel Nhan T. Lee with Associate Wayne A. Comstock

Homeowners typically experience property damage and use contractors to repair the damage as quickly as possible. [4] An assignment of benefits, or AOB, is an agreement “in which a contractor begins the work [on the property owner’s home] without charging the property owner and agrees to seek compensation from the insurer.” [5] An AOB can be beneficial to a homeowner because an AOB eliminates the processing of a claim through the insurance company. [6] Without contacting the insurance company, “the insured can hire a contractor, wait for the contractor to finish the work, then pay the deductible.” [7] Despite the time saving benefit to a homeowner, AOBs can lead to costly litigation and higher premiums. [8]

In Florida, AOB abuse first started with Personal Injury Protection (“PIP”) claims. [9] A PIP claim works similar to an AOB property damage claim. [10] In a PIP claim, “[t]he assignment lets a medical provider seek reimbursement for their services directly from an insurer. The injured person receives medical care and does not have to deal directly with their insurance company.” [11] PIP claims led to abuse because plaintiff’s attorneys filed many lawsuits on behalf of the assignee “for inflated claims or potentially unnecessary medical treatment.” [12]

Prior to 2019, AOBs frequently resulted in costly litigation primarily because Florida law provided for one-way attorney’s fee provisions. [13] In a first-party lawsuit, Florida law required insurers to pay plaintiff’s attorneys a court determined “reasonable sum.” [14] However, Florida law did not require plaintiffs to compensate the insurer’s attorneys. [15] This imbalance pressured insurers to settle claims “rather than face expensive litigation, which, if they lose, means they must pay the other side’s lawyers.” [16]

The public policy rationale supporting one-way attorney’s fee provisions in Florida stems from Feller v. Equitable Life Assurance Soc. [17] In Feller , the Supreme Court of Florida described the purpose of one-way attorney’s fee provisions as “to discourage the contesting of policies in Florida courts, and to reimburse plaintiffs reasonably their outlay for attorney’s fees when suing in Florida courts.” [18] In Ivey v. Allstate Ins. Co. , the Supreme Court of Florida further described the rationale behind one-way attorney’s fee provisions as “to level the playing field so that the economic power of insurance companies is not so overwhelming that injustice may be encouraged because people will not have the necessary means to seek redress in the courts.” [19] AOBs defeat the purpose of one-way attorney’s fee provisions because AOBs do not serve those individuals one-way attorney’s fee provisions are meant to protect: the policyholder and any beneficiaries the policyholder designates. [20]

The Florida legislature enacted PIP reforms in 2012 that curbed “AOB abuse in auto insurance.” [21] However, around the same time, AOB abuse began spreading to property damage claims. [22] Vendors targeted homeowners insurers because Florida is home to a large number of insured homes, “which ensures large claimant and plaintiff pools.” [23] In addition, hurricanes and tropical storms in Florida carry the risk of water damage. [24] In Florida, “[w]ater damage repairs often need to be undertaken immediately to prevent further damage.” [25] To complicate matters further, “the standard homeowners policy requires that policyholders protect their property from further damage by making reasonable and necessary repairs.” [26] A homeowners policy is more attractive than an auto insurance policy because the average loss is higher: $11,000 compared with $1,300. [27] The higher threshold means that a homeowner assignee in a property claim can potentially “inflate repair bills to a greater degree.” [28] As a result of increasing AOB litigation, insurers raised premiums. [29] For example, “the average premium [in Florida] rose 30 percent between 2007 and 2015.” [30] AOB abuse is most pronounced in Florida because “insurers’ legal costs are rising much faster than losses from homeowners claims” compared with other states. [31]

In an effort to curtail AOB abuse, the Florida legislature enacted significant reforms to AOBs and the one-way attorney’s fee provision. [32] The legislation, enacted on July 1, 2019, “require[d] assignment agreements to be in writing and signed by both the assignee and assignor.” [33] Other changes to AOB agreements included allowing “assignors to rescind without penalty within seven days of the execution of the agreement” and obligating “[a]ssignees . . . [to] provide a copy of an assignment agreement to an insurer within three business days of the execution of the agreement.” [34] The most notable difference, however, involved the one-way attorney’s fee provision where the provision “no longer applies to an assignee.” [35] Instead, the 2019 reforms encouraged insurers to avoid litigation through negotiation or appraisal. [36] In a lawsuit involving an AOB agreement, attorney’s fees may only be recovered as follows:

• Less than 25 percent of the disputed amount, the insurer is entitled to an award of reasonable attorney fees.
• At least 25 percent but less than 50 percent of the disputed amount, no party is entitled to an award of attorney fees.
• At least 50 percent of the disputed amount, the assignee is entitled to an award of reasonable attorney fees. [37]

As companion legislation, the Florida legislature also passed Fla. Stat. 627.7153. [38] Under Fla. Stat. 627.1753, an insurer may restrict an insured’s “right to execute an assignment agreement” if the insurer provides (1) an insurance policy that does not restrict the insured’s “right to an execute an assignment agreement[,]” (2) the restricted policy at a lower cost compared with the unrestricted policy, (3) the policy restricting or prohibiting assignment in whole at a “lower cost than any policy [restricting or] prohibiting assignment in part[,]” and (4) specific language in any restricted policy as described in the statute. [39]

The Florida legislature enacted the 2019 reforms, in part, to reduce insurance premiums for Florida homeowners. [40] In the year following the reform, Citizens Property Insurance Corporation (“CPIC”), reported that insurance premiums dropped for almost 44,000 policyholders. [41] In addition, the reform helped reduce AOB litigation. [42] In 2020, “Florida [saw] less first party cases being filed . . . . CPIC alone [saw] their caseload drop from 2,000 to 1,750 suit per month.” [43] Despite the reduction, Florida lawmakers remained concerned about AOB abuse. [44]

In May 2022, the Florida Legislature approved additional property insurance reforms. [45] The reforms further limit the awarding of attorney’s fees in AOB cases. [46] The reform, titled SB 2D, prohibits a court from awarding attorney’s fees to an assignee in AOB litigation. [47] The reforms also severely “restrict the awarding of fee multipliers in property insurance disputes to ‘rare and exceptional circumstances.’” [48] Florida lawmakers believed such reforms necessary given Florida’s excessive contribution to homeowner insurance lawsuits across the United States. [49] Florida, responsible for “just 9% of property insurance claims, generates 79% of the nation’s homeowner insurance lawsuits.” [50] Florida lawmakers approved the reforms under the belief that “lawsuits . . . exploded in the past several years” despite the 2019 reforms. [51]

While Florida lawmakers acted to protect homeowners, [52] contractors rallied against the reform. [53] In June 2022, the Restoration Association of Florida and Air Quality Assessors, LLC, “filed [a] lawsuit in Leon County circuit court” testing the constitutional validity of the legislation. [54] In filing the lawsuit, “contractors contend that assignment of benefits helps homeowners who are unfamiliar with making sure insurance claims are handled properly.” [55] Contractors believe that AOBs help homeowners quickly address home damage due to inclement weather and other unforeseen circumstances. [56]

In Florida, contractors and Florida lawmakers are seemingly at odds with respect to AOBs. [57] The 2022 reforms remove the awarding of attorney’s fees altogether from AOB litigation, [58] which may both help and hurt homeowners in Florida by lowering property insurance premiums but making immediate home repair less accessible. AOBs will remain a contentious issue moving forward, and the reforms may lead to additional challenges.

[1] Jim Ash, Governor Signs Property Insurance Reforms and Condo Safety Measures , Florida Bar (May 27, 2022), https://www.floridabar.org/the-florida-bar-news/governor-signs-property-insurance-reforms-and-condo-safety-measures/.

[2] Mark Delegal & Ashley Kalifeh, Restoring Balance in Insurance Litigation: Curbing Abuses of Assignments of Benefits and Reaffirming Insureds’ Unique Right to Unilateral Attorney’s Fees 9 (2015), https://www.fljustice.org/files/123004680.pdf.

[3] Douglas Scott MacGregor, Florida Takes Aim at Assignment of Benefits Abuse: A Home Run or a Swing and a Miss? , in New Appleman on Insurance: Current Critical Issues in Insurance Law (2021).

[9] Ins. Info. Inst., Florida’s Assignment of Benefits Crisis: Runaway Litigation Is Spreading, and Consumers Are Paying the Price 7 (2018).

[12] Id. at 8.

[13] Id. at 4.

[17] Feller v. Equitable Life Assurance Soc. , 57 So. 2d 581, 583 (Fla. 1952).

[19] Ivey v. Allstate Ins. Co. , 774 So. 2d 679, 684 (Fla. 2000).

[20] Delegal & Kalifeh, supra note 2, at 3.

[21] Ins. Info. Inst., supra note 9, at 12.

[23] Id. at 13.

[24] What You Should Know About Water Damage in Your Home or Business , Kanner & Pintaluga, https://hurricanedamage.com/blog/what-to-know-about-water-damage/.

[25] Ins. Info. Inst., supra note 9, at 13.

[29] Id. at 14.

[32] Fred E. Karlinsky, Esq., Florida Assignment of Benefit Abuse: Recent Developments, Fed’n of Regul. Couns., https://www.forc.org/Public/Journals/2019/Articles/Summer/Vol30Ed2Article1.aspx.

[36] Cozen O’Connor, Florida’s “Assignment of Benefits” Bill: A Guide Through the New Statutory Framework , JDSupra (Apr. 26, 2019), https://www.jdsupra.com/legalnews/florida-s-assignment-of-benefits-bill-a-29861/.

[37] Fla. Stat. § 627.7152(10)(a) (2019).

[38] Fla. Stat. § 627.7153 (2019).

[39] Id. § 627.7153(2)(a)-(d).

[40] O’Connor, supra note 36.

[41] Rumberger Kirk, Impact of Florida’s New Assignment of Benefits Law: HB 7065 , JDSupra (May 26, 2020), https://www.jdsupra.com/legalnews/impact-of-florida-s-new-assignment-of-80753/.

[44] Ash, supra note 1.

[53] Jim Saunders, Contractors Challenge New Florida Insurance Law , Law (June 1, 2022), https://www.law.com/dailybusinessreview/2022/06/01/contractors-challenge-new-florida-insurance-law/.

[57] Ash, supra note 1; Saunders, supra note 53.

[58] Ash, supra note 1.

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Florida’s “Assignment of Benefits” Bill: A Guide Through the New Statutory Framework

This week, after 7 years of failed efforts, the Florida Legislature passed a meaningful Assignment of Benefits (“AOB”) reform bill.  Florida Governor Ron DeSantis announced yesterday that he would sign the legislation designed to cut back on abusive AOBs, a practice that has plagued the hurricane-prone state. In recent years, many contractors have taken advantage of Florida’s unique one-way attorney’s fee shifting statute for insurance coverage litigation. This rule has incentivized contractors to, via the assignment of benefits mechanism, charge property owners outlandish amounts and to then pursue needless, sometimes frivolous, and always expensive litigation against insurance companies.

Florida H.B. 7065 , expected to take effect July 1, 2019, makes several key statutory changes designed to curb AOB practices. We discuss a few of those highlights here.

The bill establishes several new sections of the Florida Statutes, including Fla. Stat. § 627.7152. § 627.7152(2)(a) sets requirements for a proper assignment of benefits:

627.7152 Assignment agreements.—

(2)(a) An assignment agreement must:

1) Be in writing and executed by and between the assignor and the assignee.

2) Contain a provision that allows the assignor to rescind the assignment agreement without a penalty or fee by submitting a written notice of rescission signed by the assignor to the assignee within 14 days after the execution of the agreement, at least 30 days after the date work on the property is scheduled to commence if the assignee has not substantially performed, or at least 30 days after the execution of the agreement if the agreement does not contain a commencement date and the assignee has not begun substantial work on the property.

3) Contain a provision requiring the assignee to provide a copy of the executed assignment agreement to the insurer within 3 business days after the date on which the assignment agreement is executed or the date on which work begins, whichever is earlier. . . .

4) Contain a written, itemized, per-unit cost estimate of the services to be performed by the assignee. . . .

Under § 627.7152(2)(a), contractors will no longer be able to blindside their customers and insurers with exorbitant bills with the expectation that an insurance company will eventually pay it. Now, contractors will be required to provide detailed estimates in advance of performing the work in order to effectively obtain an assignment of insurance benefits. Further, the assignee must promptly notify the insurer of the assignment. Insurers will now be able to monitor costs as they are incurred and ensure contractors are not performing unnecessary repairs.

In the event of litigation, § 627.7152(3) addresses the burden of the assignee:

(3) In a claim arising under an assignment agreement, an assignee has the burden to demonstrate that the insurer is not prejudiced by the assignee’s failure to:

(a) Maintain records of all services provided under the assignment agreement.

(b) Cooperate with the insurer in the claim investigation.

(c) Provide the insurer with requested records and documents related to the services provided, and permit the insurer to make copies of such records and documents.

(d) Deliver a copy of the executed assignment agreement to the insurer within 3 business days after executing the assignment agreement or work has begun, whichever is earlier.

Like a policyholder, assignees must cooperate with the insurer. If an assignee fails to maintain records, provide the insurer requested documents, or deliver the agreement as required by § 627.7152(2)(a), the assignee will bear the burden in litigation of demonstrating a lack of prejudice to the insurer.

In order to even get into a courtroom, however, § 627.7152(9)(a) requires assignees to serve written notice at least 10 business days prior to filing suit. The notice must include, among other things, the amount of damages in dispute, the amount claimed, and a pre-suit settlement demand. The assignee must also provide a detailed written invoice or estimate of services, the number of labor hours, and in the case of work performed, proof that the work has been performed in accordance with “accepted industry standards.” Upon receipt of the notice,

(b) An insurer must respond in writing to the notice within 10 business days after receiving the notice specified in paragraph (a) by making a presuit settlement offer or requiring the assignee to participate in appraisal or other method of alternative dispute resolution under the policy. An insurer must have a procedure for the prompt investigation, review, and evaluation of the dispute stated in the notice and must investigate each claim contained in the notice in accordance with the Florida Insurance Code.

Insurers have an opportunity to avoid litigation through negotiation or appraisal. Assignees are encouraged to make reasonable settlement demands and to consider reasonable offers because failure to do so can trigger an award of attorney’s fees in the insurer’s favor:

(10) Notwithstanding any other provision of law, in a suit related to an assignment agreement for post-loss claims arising under a residential or commercial property insurance policy, attorney fees and costs may be recovered by an assignee only under s. 57.105 and this subsection.

 (a) If the difference between the judgment obtained by the assignee and the presuit settlement offer is:

1) Less than 25 percent of the disputed amount, the insurer is entitled to an award of reasonable attorney fees.

2) At least 25 percent but less than 50 percent of the disputed amount, no party is entitled to an award of attorney fees.

3) At least 50 percent of the disputed amount, the assignee is entitled to an award of reasonable attorney fees.

Fla. Stat. § 627.428 is the one way attorney’s fee shifting statute in Florida’s insurance code.  This statute generously provides fee-shifting to “prevailing” policyholders and claimants, including following negotiated settlements in contravention of the general American rule. Under the new AOB statute, § 627.7152(10), awards of attorney’s fees are discretionary in suits against insurers by assignees.  Further, § 627.7152(10) requires assignees to obtain a judgment of an amount at least 50% greater than the insurer’s pre-suit settlement offer in order to obtain an award of attorney’s fees. For additional encouragement to accept reasonable settlement offers, assignees who fail to obtain a judgment at least 25% greater may be required to pay the insurer’s attorney’s fees.

Last, insurers can avoid “assignment of benefits” issues altogether by prohibiting AOBs in their policies. The bill creates a new § 627.7153, which allows “[a]n insurer may make available a policy that restricts in whole or in part an insured’s right to execute an assignment agreement” if certain conditions are met.  Those conditions include that the insurer must also provide unrestricted coverage, the restricted policy is available at a lower cost than the unrestricted policy, policies prohibiting assignment in whole cost less than policies prohibiting assignment in part, and restricted policies must contain notice on its face.

With the passage of this new law, Florida will see a new litigation landscape in the area of assignment of benefits. The law is prospective only, so it will not technically impact existing AOB litigation.  However, through passage of this law, Florida has disincentivized unscrupulous contractors and leveled the courtroom playing field and the presently rampant AOB litigation should begin to fade. Ultimately, these changes are expected to benefit Florida policyholders with reduced insurance premiums.

2023 Florida Tort Reforms – What You Need to Know

• Written By Casey Tozzi

In an effort to address affordability in the personal auto and homeowners markets, Florida has recently enacted significant reforms that have dramatically changed the tort law applicable to personal insurance policies in the state.  

Our actuarial consulting experts break down what this means for insurance companies and in the years ahead.  

ATTORNEY INVOLVEMENT HAS BEEN SIGNIFICANT IN FLORIDA  

For the past 50 years, Florida has been a no- fault state, where drivers rely on personal injury protection (“PIP”) coverage from their own policy to cover the cost of their injuries in exchange for a limitation on their ability to sue. Despite this intended limit, Florida’s PIP claims have been nearly three times as likely to be litigated as in other states 1 . 

Litigation is also a major cost driver in the property insurance market. In 2020, Florida accounted for only 9% of countrywide homeowners insurance claims but a whopping 79% of all homeowners insurance lawsuits 2 .  

Exhibits 1 and 2 below show the number of lawsuits filed against the top 20 personal auto and homeowners insurance carriers in the state of Florida, respectively.  

Exhibit 1  

REFORMS DESIGNED TO REDUCE COSTS  

Florida’s recent reforms include: Senate Bill 2A (“SB2A”), passed in December 2022, and House Bill 837 (“HB 837”), signed March 24, 2023. SB2A eliminated one-way attorneys’ fees and prohibited the assignment of benefits for residential or commercial property insurance policies written January 1, 2023 or later. HB 837 extended this by eliminating one-way attorneys’ fees in all but some declaratory judgments. In addition, HB 837 introduced new requirements for plaintiffs to recover damages. Most notably, it makes Florida a modified comparative negligence state, which prohibits claimants that are more than 50% at fault from recovering damages. It also reduces the statute of limitations for negligence claims and provides additional standards for bad-faith actions. 

IMPACT ON RATE FILINGS  

Due to the prospective nature of ratemaking, rate filings now need to consider the new tort environment. Historical data alone will not be sufficient to project future losses. There is a high degree of uncertainty since the reform will influence attorney and plaintiff behavior in response to the new laws.  

These new patterns will take time to emerge, given claims with attorney involvement take longer to be adjudicated. These reforms are expected to reduce both the percentage of claims that are litigated and the average claim severity since non-litigated claims cost less than litigated claims. Lower payments will be made to plaintiffs’ attorneys, and the insurer’s defense and cost containment expense should also be reduced since fewer claims will need to be defended.  

The Florida Office of Insurance Regulation commissioned studies to determine the potential impact of changes for some past reforms, but no study is available yet for these recent reforms. Insurers must evaluate the anticipated impact of the reforms on their losses and loss adjustment expenses and reflect this in their rate filings. Experienced actuarial consulting partners like the team at Perr&Knight can provide support to inform rate filing changes. 

Private passenger auto rate filings open on or after July 1, 2023 have been required to submit detailed data to estimate the effect of HB 837 and to make necessary adjustments in the filing. Similarly, homeowners rate filings submitted after July 1, 2023 have been required to reflect projected savings due to the combined effect of several reforms over the past two years.  

We keenly understand the data requirements and reasonable projections to provide the support that is needed. Let Perr&Knight’s team of expert actuaries use our proven experience to assist with your Florida rate filing needs.  

Contact Perr&Knight today to learn more.    

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FLORIDA TORT REFORM: Major Changes, What to Know, and Why

On March 24, 2023, Florida’s governor signed HB 837 / SB 238 into law, passing extensive tort reform measures pertaining to civil litigation in Florida. This summary addresses the major changes below:

• Two-Year Statute of Limitations for Negligence Actions
• Negligent Security Presumption Against Liability for Third-Party Criminal Acts
• Proving Medical Damages
• Modified Negligence Standard
• Civil Remedy & Bad Faith Changes
• “One-Way Attorney Fee” Eliminated
• Computation of Attorneys’ Fees
• Denial of Coverage Attorneys’ Fees
• Attorneys’ Fees from Proposals for Settlement Apply to Any Civil Actions Involving Insurance Contracts

Read the full Tort Reform Summary here: FLORIDA TORT REFORM (PDF)

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Addressing Florida’s assignment-of-benefits crisis

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• Under an assignment of benefits, the beneficiary of an insurance contract may transfer the right to collect benefits to a third party.
• While assignments of benefits are a standard part of insurance law in every state, quirks in Florida law have made it a locus of AOB-related litigation.
• A particular concern is the state’s “one-way attorneys’ fee” law, which allows plaintiffs’ attorneys to bill hours directly to a losing insurer if the final settlement is even $1 more than the initial offer.
• According to Florida Department of Financial Services’ legal-service-of-process data, the number of AOB lawsuits filed in the state grew from just 405 in 2006 to more than 28,000 in 2016.
• Competing bills have been introduced in the state House and Senate. The insurance industry supports the House-passed bill. The state’s trial bar supports a Senate bill that has passed the Senate Banking and Insurance Committee.
• Without reform, rate hikes of more than 50 percent over the next five years are projected in South Florida’s Broward and Miami-Dade counties, Northeast Florida’s Clay and Duval counties and Central Florida’s Orange, Seminole and Osceola counties.

Executive Summary

With one month left in this year’s regular legislative session, Florida lawmakers should pursue a compromise that includes at least those elements common to all of the legislative proposals: namely, that policyholders be granted a seven-day period to rescind assignments of benefits and that assignees be required to detail the scope of the work to be performed, as well as prove they are certified to perform that work.

Last year, the state House passed a measure that would strip assignees from being able to make use of the one-way attorneys’ fee. It failed to progress in the Senate. The legislation that passed the House this year would instead create a formula for attorneys’ fees. Depending on how large the spread between an insurer’s initial offer and the final payment, fees could be awarded to the plaintiff, the insurer or neither party. If this also proves too controversial for the Senate, a further compromise would be to keep the legislation’s formula for when and how large attorneys’ fees could be, while removing the provision that would sometimes shift insurers’ attorneys’ fees to the plaintiff.

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Gov. DeSantis Signs Key Legal Reform Bill In Florida

SB 2-A to improve FL property insurance; addresses assignment of benefits, one way attorney fee shifting, third-party bad faith

The American Tort Reform Association applauds the Florida legislature for passing and Governor Ron DeSantis (R) for signing Senate Bill 2-A to address the property insurance crisis in Florida. The legislation includes much needed assignment of benefits, one way attorney fee shifting, and bad faith reforms.

Under the new law, insurers will be protected from excessive jury awards in lawsuits involving property damage or personal injury. This will help insurance companies continue providing affordable coverage to Florida residents while keeping premiums stable.

Florida is home to more property insurance lawsuits than the rest of the country combined. While Florida accounts for only 7% of the nation’s homeowners’ claims, the state accounts for 76% of the nation’s homeowners’ insurance lawsuits.

The cost of defending these lawsuits in Florida has increased exponentially over the past several years.

In 2016, insurers paid  $1.5 billion  defending these lawsuits and that number doubled to $3 billion in 2021. Unfortunately, the consumers are not reaping the benefits from this increase. 71% of the money goes to the plaintiffs’ attorneys while plaintiffs receive a mere 8%. The remaining 21% pays for the defense attorneys.

The property insurance crisis has a very real impact on Florida property owners and insurers. As of August, five insurance companies had gone  out of business  in 2022, after 4 exited the market in 2021. This has led to a massive shortage of coverage at a time when Floridians impacted by Hurricane Ian are in desperate need.

“We would like to thank Governor DeSantis and the Florida legislature for their leadership in passing this important legislation,” ATRA President Tiger Joyce said. “We are committed to supporting efforts to improve the legal system and promote fair and reasonable policies. This is a positive step that will help to improve the civil justice system in Florida, but there is still work to be done. We look forward to working with state leaders to address transparency in damages reform in the upcoming 2023 session.”

Jurisdictions in Florida were named on the American Tort Reform Foundation’s (ATRF) list of Judicial Hellholes® for  16 years . This year, ATRF included the Florida Legislature on its Judicial Hellholes® “Watch List.”

Lawsuit abuse and excessive tort costs wipe out billions of dollars of economic activity annually. Florida residents pay an annual “tort tax” of $812.52 per person and more than 173,000 jobs are lost each year, according to a  recent study  by The Perryman Group. If Florida enacted specific reforms targeting lawsuit abuse, the state would increase its gross product by over $17.66 billion.

Background on Florida Senate Bill 2-A (2022)

Awards of Attorney Fees in Litigation Under Property Insurance Contracts

• Provides that the one-way attorney fee provisions of s. 627.428, s. 626.9373, and s. 627.70152 are not applicable in a suit arising under a residential or commercial property insurance policy.
• Allows joint offers of settlement in property insurance litigation contingent on acceptance of all joint offerees.
• Removes provisions regarding attorney fees relating to the alternative procedure for resolution of disputed sinkhole insurance claims.

Assignments of Benefits

• Prohibits the assignment, in whole or in part, of any post-loss insurance benefit under any residential property insurance policy or under any commercial property insurance policy issued on or after January 1, 2023.

Bad Faith Failure to Settle Actions Against Property Insurers

• Provides that bad faith litigation for failure to settle a property insurance claim may not be filed until after the insured has established through adverse adjudication by a court that the insurer breached the insurance contract and a final judgment or decree has been rendered against the insurer.

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Florida’s New Tort Reform: What Every Floridian Needs to Know

On March 24, 2023, Gov. Ron DeSantis signed House Bill 837 into law, significantly changing the state’s civil litigation landscape. The new package claims to cut down on “frivolous lawsuits,” but the changes create specific challenges to accident victims seeking justice.

The new tort reform not only significantly reduces the timeframe for injured accident victims to file lawsuits against those who hurt them, but it also limits the compensation they can recover when they do file and protects businesses and insurance companies against lawsuits and bad faith claims.

Here is a closer look at how the new tort reform actions in Florida can hurt you:

It Reduces the Statute of Limitations for General Negligence Claims

HB 837 immediately cut Florida’s four-year statute of limitations for filing general negligence claims in half. Now, Floridians have just two years from their accident to file a personal injury lawsuit if they want to recover damages from the person or party who caused their injuries.

This strict two-year deadline applies to:

• Car accidents
• Truck accidents
• Motorcycle accidents
• Pedestrian accidents
• Boating accidents
• Slip and Fall injuries
• Wrongful death

Florida’s new statute of limitations makes some exceptions. For example, service members have more time since they cannot appear and participate in the claims process while on active duty.

If you have questions about whether your accident claim falls within the new deadline, speak with a qualified Florida personal injury attorney today.

It Modifies Florida’s Comparative Negligence Rule

Courts use comparative negligence to measure the amount of damages a plaintiff can recover in an accident based on their percentage of fault. Before HB 837, Florida followed a pure comparative negligence rule that allowed residents involved in accidents to recover some compensation in an accident regardless of their percentage of fault.

The new law switches Florida to a modified comparative negligence rule. Now, residents who bear more than 50 percent of the blame for their accidents cannot collect any compensation.

This standard affects all personal injury and wrongful death claims except those involving medical malpractice.

It Limits What Plaintiffs Can Offer as Admissible Evidence for Medical Expenses

Accidents of any kind can result in serious and catastrophic injuries that require expensive medical treatment. Medical bills can add up, especially if you or your loved one must miss work due to these injuries. Medical expenses are common damages for which accident victims seek compensation through a personal injury claim.

Previously, plaintiffs could offer the total amount of medical bills charged for services rendered to prove medical expenses. Now, only the amount paid for services is permissible, regardless of the payment source.

Proving past unpaid medical bills gets slightly confusing and relies on the plaintiff’s health care coverage. Those with private health insurance may only use the amount their insurer would pay for those services plus their own share (copays and deductibles). For accident victims without health insurance, the court will use 120 percent of the Medicare reimbursement rate in effect when providers render the services. If no Medicare rate exists, the court will use 170 percent of the Medicaid rate.

A letter of protection serves as an IOU between the plaintiff and the doctor. It promises payment for services from the settlement. Plaintiffs who use a letter of protection rather than going through their health insurance can only offer as evidence the amount their insurer would pay for services, plus their own share.

Some doctors use a third party to handle medical bills that fall under a letter of protection. The court will only allow as evidence the amount the third party agreed to pay the doctor for the right to receive payment.

For future medical expenses, the court limits admissible evidence to the amount the plaintiff’s health care coverage would pay, plus the plaintiff’s share. For those without health insurance, if Medicare or Medicaid apply, the court will use the same percentage for future expenses as it does for past expenses.

It Establishes New Negligent Security Liability Protections

In negligent security cases, owners of commercial and business properties should know more about potential dangers to guests than tenants or customers, and they should take reasonable measures to ensure their safety.

For example, the operator of an apartment complex would know or should know if the complex is in a high crime area and should take steps to keep residents safe, such as keeping parking lots lit at night and having deadbolts and peepholes in each unit’s doors.

If the operator of the apartment complex fails to take these steps to ensure tenant safety and a criminal attacks someone on the property, the victim of that attack could seek compensation for their damages from the negligent apartment operator.

Florida’s new tort reform package now provides liability protections for owners and operators of multi-family residential units who put in place certain safety and security features, such as:

• Adding a security camera facing every entrance and exit with at least 30 days of recording footage
• Lighting the parking lot from dusk to dawn
• Adding a one-inch deadbolt in every unit door
• Adding a locking device on each window, exterior sliding doors, and other doors not used for community purposes
• Having locked gates on fences surrounding pool areas
• Adding a peephole or viewer on each unit door that does not have a window or is not next to a window

It Shields Insurers From Bad Faith Claims

Victims of accidents caused by the negligence of another often must deal with insurance companies to get compensation for their damages. Insurers often make lowball settlement offers that fall short of the full amount of damages accident victims suffer. Accident victims often hire personal injury attorneys to negotiate a fair settlement with insurers.

Sometimes these negotiations fall short. The insurer reneges on its obligation to policyholders by rejecting their legitimate claims. Or they may not process it within a reasonable time. When insurers refuse to play fair, the policyholder may bring a bad faith claim against them.

But now, insurers have protections against these claims. First, the new law states that negligence alone no longer provides grounds for a policyholder to use as evidence of bad faith against an insurer. Policyholders can no longer bring a bad faith claim if the insurer tenders the policy limits or the amount the policyholder demands within 90 days of receiving notice of the insurance claim and all the documents to support the demand. And, if the case does go to trial, neither party can mention the law in any form in a bad faith claim.

It Creates a New Lodestar Attorney Fee Presumption

The legal system has a contingency fee multiplier system to compensate attorneys and remove some of their risks when representing a client on a contingency fee basis. The court can consider and award contingency fee multipliers to attorneys for various reasons. But Florida’s tort reform makes it more difficult for courts to use these multipliers. It establishes a strong presumption that the lodestar fee (the number of hours spent on a case multiplied by an attorney’s reasonable hourly rate) is both reasonable and sufficient.

In rare cases, the court can grant an exception if the lawyer shows evidence that the plaintiff could not otherwise retain competent counsel.

One issue with the new lodestar attorney fee presumption is that it may discourage more experienced lawyers from taking some cases, leaving plaintiffs with less experienced representation.

Contact Dolman Law Group Accident Injury Lawyers for More Information

Florida’s new tort reform will significantly hinder Florida accident victims from seeking compensation from the negligent party that caused them harm.

But you can rest assured that Dolman Law Group’s Florida personal injury lawyers are nearby, with 15 locations throughout the state.

Our legal team is up-to-date on the new law’s changes and challenges. We will meet with you one-on-one to discuss your case regardless of your type of accident, identify all potential sources of compensation, and aggressively pursue maximum compensation so you can focus on your recovery.

To learn more about our services, please contact us online or call (727) 451-6900 today.

Schedule A Free Consultation

Matthew dolman, personal injury lawyer.

This article was written and reviewed by Matthew Dolman. Matt has been a practicing civil trial, personal injury, products liability, and mass tort lawyer since 2004. He has successfully fought for more than 11,000 injured clients and acted as lead counsel in more than 1,000 lawsuits. Always on the cutting edge of personal injury law, Matt is actively engaged in complex legal matters, including Suboxone , AFFF , and Ozempic lawsuits.  Matt is a lifetime member of the Million Dollar Advocates Forum and Multi-Million Dollar Advocates Forum for resolving individual cases in excess of $1 million and $2 million, respectively. He has also been selected by his colleagues as a Florida Superlawyer and as a member of Florida’s Legal Elite on multiple occasions. Further, Matt has been quoted in the media numerous times and is a sought-after speaker on a variety of legal issues and topics.

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Florida’s Tort Reform Bill: What You Need to Know

Reports | May 19, 2023 | Personal Injury

Florida Gov. Ron DeSantis signed HB 837 into law on March 24, 2023, ushering in major changes to Florida’s tort laws. The new law created many revisions to key areas of personal injury law and seeks to protect businesses, property owners, and insurance carriers from “frivolous lawsuits.” However, the revisions make it harder for injured victims to bring civil actions against those responsible for their injuries, and it affects how much compensation a plaintiff may receive.

Florida’s new tort reform also addresses attorney fees, bad faith claims, and more. The changes went into effect immediately after DeSantis signed the bill.

We explain some of the important changes and how they could affect your chances of obtaining compensation. For a detailed explanation regarding your case, reach out to an experienced Florida personal injury attorney for assistance.

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Changed Statute of Limitations to Two Years

Before the changes, Florida allowed injured victims four years to file personal injury lawsuits in civil court for most general negligence claims. Now, Florida allows only two years for all claims involving general negligence, such as car accidents, truck accidents, slip and fall accidents, and other similar incidents. The statute of limitations for wrongful death and medical malpractice was previously two years and remains the same.

The two-year statute of limitations does not apply to actions entered before March 24, only to actions that accrued after that date. Nevertheless, anticipation of the proposed changes caused a massive rush to personal injury filings and created a considerable court backlog.

Despite the changes, the law offers certain exceptions, such as if military servicemembers cannot attend court due to serving active duty. Hire an attorney to review your case immediately and advise you of your options on when you should file.

Modified Florida’s Comparative Negligence Standard

Previously, Florida followed a pure comparative negligence model when determining damages in a personal injury case. Plaintiffs could recover some compensation for their injuries even if they were 99 percent at fault.

Florida now follows a modified comparative negligence rule. If the defendant is 100 percent responsible, a plaintiff may recover the full amount of damages. If the defendant and plaintiff are equally responsible, the plaintiff may only receive 50 percent of the damages. However, if a plaintiff bears more than 50 percent responsibility for causing their injuries, they cannot recover any compensation.

The modified comparative negligence rule does not apply to personal injury or wrongful death claims arising from medical negligence.

Established New Liability Requirements and Protections for Multi-Family Property Owners

The new law addressed premises liability claims involving negligent security. The current legislation now creates a presumption against liability for multi-family residential property owners if a plaintiff suffered injuries from a third party’s criminal act and the property owner did not employ the third party.

Additionally, multi-family dwelling owners may reduce or absolve their liability if they implement certain security and safety measures, including:

• Placing security cameras at every entrance or exit to the property and keeping recorded footage for at least 30 days
• Ensuring common areas around the property have adequate lighting from dusk to dawn, such as parking lots, walkways, and gathering places
• Installing one-inch deadbolt locks on every unit’s main doors
• Placing locks on windows and sliding doors on units where appropriate
• Installing peepholes or viewers in unit doors that have no windows or are not next to a window
• Placing locked gates and fences around pool areas

Property owners must also comply with certain crime prevention and environmental design assessments as dictated by law enforcement by Jan. 1, 2025, and train property employees on proper safety and crime deterrence practices.

Limited Admissible Evidence for Medical Damages

The most important aspect of any personal injury claim is recovering medical damages from those responsible for your injuries. Florida’s new tort reform creates substantial, often confusing changes to the evidence plaintiffs may submit as proof of damages.

Previously, Florida allowed plaintiffs to submit the total amount of medical bills they received to recover past paid medical bills. Now, plaintiffs must submit evidence showing only the amount that was actually paid, regardless of who paid it. Courts will no longer allow initial billed amounts as evidence.

Other important changes regarding past and future medical expenses:

• Past unpaid medical bills . The evidence plaintiffs may submit depends on their healthcare coverage. Plaintiffs with private health insurance (not Medicaid/Medicare) may only submit the amount the insurer must pay under the policy, plus the plaintiff’s portion of the expenses. If the plaintiff does not have health insurance or coverage through Medicare/Medicaid, the court will determine damages at 120 percent of the Medicare rate, or 170 percent of the Medicaid rate if no applicable Medicare rate exists.
• Future medical expenses . Courts will now only allow plaintiffs to enter the amount their insurer would pay, plus the plaintiff’s share. The same Medicare/Medicaid percentages from above will apply if either entity covers the plaintiff.

Letters of Protection

Many injured victims receive medical care through a letter of protection (LOP). A LOP is an agreement between a healthcare provider and a patient where the provider provides medical care with the promise the patient will pay them for their services out of any court award or settlement the patient receives from their injury claim.

For both personal injury and wrongful death actions, plaintiffs who receive medical care through an LOP or similar agreement may only submit the amount an insurer would pay for treatment and services in addition to co-pays, deductibles, and other expenses that plaintiffs must pay. LOP plaintiffs must submit a copy of the LOP or agreement and a coded and itemized bill that lists the care and services they received.

If the provider sells the patient’s accounts receivable to a third party, the provider must submit the name of the third party along with the dollar amount of the sale and any invoice discounts.

A plaintiff must also assert whether their attorney or a third party referred them to the LOP provider. Attorneys also have to disclose any financial relationship they or their firm have with the provider, if applicable.

Addressed Attorney Fees

Before the new legislation, Florida courts allowed attorneys to set their fees using various criteria. The law now provides a strong but rebuttable presumption that lodestar attorney fees are reasonable and sufficient for compensation. A lodestar fee is the attorney’s reasonable fee multiplied by the amount of time they spent working on a case.

The new law essentially eliminates contingency fee multipliers and reduces the award for attorney fees. This can hurt injured victims seeking to retain counsel for their personal injury cases. However, the law also offers exceptions in “rare and unusual” circumstances. One such circumstance is if the plaintiff could not otherwise secure competent counsel—another is if the court renders a declaratory action. The latter does not apply to cases involving residential or commercial properties.

Additionally, the new legislation prohibits transferring or assigning attorney fees, and it also addresses attorney fees in surplus lines of insurance situations, among others.

Protected Insurers from Bad Faith Claims

Insurance companies have a bad reputation for unjustly denying claims or delaying payment on claims. Most personal injury attorneys throughout Florida fight hard to hold insurance companies accountable to get their clients the compensation they need and deserve. One common recourse personal injury lawyers use against insurers who refuse to make good on a claim is to file a bad faith action.

Florida’s new tort laws severely restrict a plaintiff’s ability to bring bad faith actions against insurers.

• If the insurer tenders the lesser of the policy limits or the amount the plaintiff demanded within 90 days of receiving actual notice of the claim and sufficient evidence, a plaintiff cannot bring a bad faith action against them.
• If the insurer does not tender within 90 days, the statute of limitations for bringing a bad faith claim will extend another 90 days.
• Plaintiffs cannot use mere negligence to prove bad faith. If the case goes to trial, plaintiffs may not mention the existence of the law to support their claim of bad faith.
• Plaintiffs and their counsel must act in good faith when initiating and settling claims and throughout the discovery process. If the court finds a plaintiff did not act in good faith, they can reduce their damages accordingly.

The revisions also affected competing claims where two or more parties have claims arising from the same action. If the total amount of damages exceeds policy limits, plaintiffs cannot bring bad faith actions against insurers that do not tender within 90 days.

Contact a Personal Injury Lawyer for Help

Florida’s new tort reform offers protections to certain defendants, but it creates major challenges to plaintiffs in seeking recovery for their injuries someone else caused. You rightfully have concerns about how the new legislation may affect your ability to obtain compensation, but do not lose hope.

You have options for getting the compensation you need, but you need an attorney to review your case and explain your rights and options. For help, contact Steven A. Bagen & Associates, P.A. today to get your free consultation.

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The Dawn of Tort Reform: Governor Ron DeSantis Signs HB 837 Into Law

Governor Ron DeSantis signed Senate Bill 2-A into law in December 2022, followed by his signing of HB 837 on March 24, 2023. Together, these new laws provide sweeping reforms that dramatically effect Florida’s insurance and tort landscape. As concrete proof of their impact, plaintiffs have flocked en masse to the courts to get in under the wire before these laws take effect. The following is a digest of several key takeaways that insurance carriers and practitioners should know about the comprehensive changes in Florida law.

• Protections Against Bad-Faith Claims

Extra-contractual liability can be costly, and insurance carriers risk extra-contractual liability if they fail to settle a claim despite having an opportunity to do so fairly and honestly under the circumstances. See generally Section 624.155, Florida Statutes. Now, HB 837 provides a host of additional protections for insurance carriers and outlines specific mechanisms to avoid bad-faith. For instance, where an insured or a third-party claimant sends a demand for payment to an insurance carrier, HB 837 immunizes the carrier from a bad-faith suit when it tenders its policy limits (or the amount sought in the demand, whichever is lesser) within 90 days of the demand.

Of critical importance to carriers, failure to tender payment within this 90-day safe harbor period is not evidence of bad faith and is inadmissible as evidence of bad faith. Further, HB 837 codifies that “mere negligence” alone is insufficient to establish a bad-faith claim, thereby requiring a heightened showing of bad faith to establish a claim. This is a meaningful change and should enable carriers to avoid lengthy litigation over minor errors in the adjusting process. The 90-day time frame also effectively eliminates arbitrary time-limit demands as a mechanism for “setting-up” a bad-faith claim.

• Duties Imposed on Insureds and Claimants

The law also creates an affirmative obligation on insureds, third-party claimants, and their representatives, to act in good faith in providing the carrier with information about the claim, making demands of the carrier, setting deadlines, and attempting to settle their claim. If a fact finder determines that an insured, a third-party claimant, or their representatives failed toact in good faith in pursuing a claim, damages against the carrier can be reasonably reduced. This is especially important in instances where an insured and a third-party claimant pursue a bad-faith action against a carrier, as the insured or the claimant’s failure to act in good faith may impair settlement opportunities with a carrier.

• Civil Remedy Notices

A Civil Remedy Notice (“CRN”) has generally been a condition precedent to filing a bad-faith suit against a carrier under Florida. See Section 624.155(3), Florida Statutes. Yet under prior law, CRNs were only required as a condition precedent for first-party bad faith suits from insureds; there was no similar CRN requirement for third-party or “common law” bad faith claims against a carrier. HB 837 brings consistency to bad-faith claims in Florida by requiring a CRN to be filed as a condition precedent in both first-party and third-party bad-faith actions.  

• Multiple Competing Claims

HB 837 also provides carriers with additional protections for matters involving competing claims which exceed an insured’s available policy limits. Up until now when a carrier was faced with multiple claims there was no mechanism in place to avoid a subsequent bad-faith claim.  Instead insurers were required to make complicated decisions as to which claims should have higher settlement priority, often with limited information and the pressure of time-sensitive demands, while also avoiding “indiscriminately settling selected claims and leaving the insured at risk of excess judgments . . . .”  Farinas v. Florida Farm Bureau Gen. Ins. Co. , 850 So. 2d 555, 560 (Fla. 4th DCA 2003) . Without clear parameters carriers were often uncertain how to meet this duty.

Now, if a carrier receives notice of competing claims for a single occurrence, HB 837 provides that carriers do not commit bad-faith and are not liable above the policy limits when they either: (1) file an interpleader action under the Florida Rules of Civil Procedure; or (2) tender the full policy limits among each demanding party pursuant to a binding arbitration arrangement between the carrier and the claimants. This is a dramatic change will eliminate a sizable portion of the type of bad-faith claims that have been brought.

• Attorney’s Fees and Fees Against Carriers

HB 837 also substantially changes Florida’s fee entitlement statute, Section 57.104, Florida Statutes. Federal courts generally follow the “lodestar” fee computation model, where fees are calculated by multiplying the hours an attorney worked on a matter by a reasonable attorney fee rate. Under Florida’s prior fee statute, courts were not required to follow the lodestar model and held broad discretion to award fee multipliers. HB 837 brings Florida into lockstep with the federal lodestar model by creating a “strong presumption” that a lodestar fee is reasonable and sufficient for a given matter. Fee multipliers can still be obtained, but only in (1) “rare and exceptional circumstances” with (2) supporting evidence that competent counsel could not otherwise be retained. As such, Section 57.104, Florida Statutes, creates a strong presumption against fee multipliers going forward. 

• One-Way Attorney’s Fees Repealed for Insurance Cases

HB 837 repealed Fla. Stat. §§ 629.9373 and 627.428, which permitted only insureds and third-party claimants to recover attorney’s fees against surplus line insurers and insurers, respectively. These provisions have colloquially been dubbed as “one-way attorney’s fees” because there is no statutory fee entitlement for carriers. Now, HB 837 has repealed these one-way attorney’s fees, and neither a plaintiff or a carrier has a statutory right to fees in actions against carriers.  

• Attorney’s Fees in Declaratory Judgment Coverage Cases

Notwithstanding the above, carriers should be aware that HB 837 does create a limited right to attorney’s fees in certain declaratory judgment actions. Specifically, insureds and third-party claimants are entitled to attorney’s fees against a carrier only when the carrier completely denies coverage and a court determines that the complete denial of coverage was improper. Recoverable attorney’s fees are limited to those incurred in the declaratory judgment action, and either party to the action can request the use of a summary procedure to expedite resolution of the matter.

• A New Statute of Limitations for Negligence Actions

A key change to Florida’s tort reform bill is the reduction of Florida’s statute of limitations for negligence actions. HB 837 reduced the statute of limitations for negligence actions from four years to two years.

• Adjusting Comparative Fault

Florida has traditionally been a pure comparative fault state, where plaintiffs could recover damages in a personal injury action even if they were mostly—or even nearly entirely—at fault for their own damages. See Section 768.81(2), Florida Statutes (“contributory fault chargeable to the claimant diminishes proportionately the amount awarded as economic and noneconomic damages for an injury attributable to the claimant’s contributory fault, but does not bar recovery .”). HB 837 modifies Florida’s comparative fault law to bar a plaintiff’s recovery if the they are more than 50% at fault for their own harm.

• The End of Worley

Following the Florida Supreme Court’s 2017 decision in Worley v. C. Fla. Young Men’s Christian Ass’n , Inc., 228 So. 3d 18 (Fla. 2017), financial relationships between a plaintiff’s law firm and their treating physicians have generally been undiscoverable under the veil of attorney-client privilege. This has placed plaintiffs and defendants on unequal footing, as financial relationships between a party’s law firm and their retained experts have been long been discoverable, but the relationship between a plaintiff’s law firm and a plaintiff’s treating physicians have not. Now, HB 837 abrogates Florida’s attorney-client privilege statute, Section 90.502, Florida Statutes, to expressly permit the discovery and admissibility of (1) attorney-referral evidence between a plaintiff’s law firm and treating physicians and (2) evidence of any financial relationship between a plaintiff’s law firm and medical providers. Accordingly, HB 837 allows practitioners to impeach a plaintiff’s medical treatment and damages evidence in ways that would have otherwise been prohibited by Worley .  

• Letter of Protection Limitations

Letters of Protection (“LOPs”) generally allow a patient to receive medical treatment up front and without cost, while also allowing medical providers to seek payment from a personal injury judgment or settlement. Carriers and practitioners alike have long suspected that LOPs may contain “inflated” costs for treatment, which are later presented to juries as uncontested evidence of unpaid medical bills. For plaintiffs who have health insurance but choose to treat under an LOP, evidence of what their own health insurance would have paid for their treatment can also be admitted to contest their proffered costs of treatment. For third parties who sell or purchase LOPs, evidence can also be admitted concerning the cost of the LOP, which are often a fraction of the billed cost for the treatment. Further, HB 837 bars the recovery of costs of treatment covered by an LOP if the plaintiff, among other things, fails to disclose:

• A copy of the LOP;
• All itemized and coded billings for the plaintiff’s treatment;
• Whether the plaintiff had health care coverage, and if so, the identity of the carrier; and
• Whether the plaintiff was referred for the LOP treatment, including information about whether the plaintiff was referred to such treatment by an attorney

Under HB 837, compliance with the above is a condition precedent to asserting a claim for medical treatment covered by an LOP.

• Admissibility of Damages Evidence

HB 837 also permits the presentation of other objective evidence to contest the reasonableness of a plaintiff’s past and future medical damages. In addition to the LOP considerations discussed above, HB 837 expands the types of damages evidence that can be presented in a personal injury or wrongful death matter. For instance, if a plaintiff has health insurance, evidence can be admitted concerning the amounts that health insurance would have paid if the plaintiff submitted their bills to their own health insurer. If a plaintiff does not have health insurance, or receives Medicare or Medicaid benefits, evidence may be admitted showing that the reasonable cost of plaintiff’s treatment should be limited to 120% of the Medicare rate, or 170% of the Medicaid rate, for the patient’s treatment. Accordingly, fact finders no longer need to consider a plaintiff’s medical bills in a vacuum when considering the reasonableness of those bills. 

• Property Owner Protections in Negligent Security Cases

Property owners now also enjoy additional protections under HB 837. For instance, in negligent security actions involving harm caused by the criminal acts of third parties, fact finders now must consider the fault of all persons who contributed to a plaintiff’s injuries when assessing causation and damages—including the fault of third-party criminal actors. These protections apply to the owners, lessors, operators, or managers of commercial or real property. Further, owners and operators of multifamily properties (i.e., apartments and condominiums) will enjoy a presumption against civil liability for claims involving criminal acts committed by a third-party if the property owner employs certain safety measures on their property. Among the list of safety measures are security camera systems that target points of ingress and egress, lighting in parking lots and common areas, deadbolts on each dwelling door, and locked gates with key or fob access. HB 837 creates a comprehensive list of security measures that multifamily property owners must utilize to enjoy the presumption against civil liability, so property owners would be well served by consulting with their local FMG attorney in navigating these new requirements.

• Challenges on the Horizon

Plaintiffs’ practitioners have been filing thousands of suits en masse in anticipation of the bill’s passing. And while HB 837 provides carriers, defense practitioners, and property owners with a host of new benefits and protections, it is expected that the law will be met with challenges. For instance, while the law took immediate effect upon receiving Governor DeSantis’ signature, it also provides that the law shall not be construed to impair any rights under an existing insurance contract. Thus, there will likely be disputes as to whether HB 837 applies to polices currently in effect prior to their renewal. Suits may also arise challenging the constitutionality of the law, as some may argue that shortening the statute of limitations, reducing damages recovery, and repealing fee entitlement for insurance cases impedes individual access to the courts. And naturally, disputes may arise as to the interpretation of any number of HB 837’s new provisions. Carriers and practitioners alike must keep a keen eye on any challenges made against HB 837 that may arise.  

HB 837 creates new strategies for carriers, defense practitioners, and property owners to employ when resolving Florida insurance and tort claims. For more information, please contact Melissa A. Santalone at [email protected] , Catherine M. Carson-Freymann , at [email protected] , Julie B. Karron , at [email protected] , Christopher T. Lawson , at [email protected] , or your local FMG attorney.

Tort Reform in Florida for 2023

Written by Attorney Alan Aronson | November 18, 2023 | Personal Injury

The Florida legislature has long been considering tort reform bills, and in March 2023, the Florida Tort Reform Act 2023 went into effect. This law brings important changes to the personal injury process across the state, many of which do not necessarily benefit injury victims.

If you suffered an injury, you need representation and guidance from a personal injury lawyer who understands how this sweeping tort reform might affect your legal rights and claim for compensation.

Changes to the Law

The Florida Tort Reform Act 2023 aims to prevent excessive damage awards to injury victims and reduce insurance costs. In doing so, the law has also limited the rights of injury victims, making it more challenging in some situations to seek compensation for their losses. Having the immediate help of a skilled injury lawyer is more important than ever in Florida.

New Statute of Limitations for Personal Injury Claims

Prior to March 2023, many injury victims had four years to file a lawsuit in civil court, according to the personal injury statute of limitations. Four years gave victims the time to understand their prognosis and take steps to pursue a legal claim.

Now, under the new law, the statute of limitations is shortened to only two years. This means you need to assess your past and future damages, negotiate with insurance companies, and know whether you must file a lawsuit - all within two years of your injury date. This means you should never wait to seek help from an injury lawyer right after your accident and injuries.

Adjustments to Comparative Fault

Before, Florida’s comparative fault laws allowed injury victims to recover compensation even if they played a part in causing the accident. Now, victims only have the right to compensation if they are deemed less than 50 percent responsible. If a plaintiff is 51 percent or more liable for the accident, they cannot seek compensation from other contributing parties. This change applies to most personal injury claims except those involving medical malpractice.

Negligent Security Claims

Property owners were responsible when inadequate security resulted in injuries from assault or other intentional conduct on the premises. Now, however, the Tort Reform Act focuses more on the individual who committed the assault or intentional harm. This might allow property owners to reduce their liability in negligent security claims. Some people are concerned that this reduces the incentive for property owners to implement proper security measures to keep visitors and customers safe from violence and criminal activity.

Consult with Our South Florida Personal Injury Attorneys Today

Personal injury laws can change and make it more difficult to seek the compensation you need following an injury. Always hire an attorney who is well-versed in Florida law and stays on top of tort reform.

The lawyers of Rosenthal, Levy, Simon & Sosa are ready to help following accidents and injuries. Please call our office at 772-878-3880 or send us an online message to set up your free, no-obligation consultation regarding a possible personal injury case.

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Florida Legislature Sends Windshield Repair Bill to Governor, Ending AOBs

The Florida House of Representatives on Tuesday overwhelmingly approved a bill that would prohibit assignments of benefits for windshield repairs, sending it to the governor for his signature.

Senate Bill 1002 , passed by a vote of 103 to 16, also would bar windshield repair shops from offering gifts to customers, a practice made famous by one company’s advertisements offering “really good steaks.” The measure also would block insurers and agents from “steering” insureds to favored repair shops but would allow insurers to offer premium discounts for policies that do include managed repair plans. The Senate had endorsed the measure 40-0 last month.

A Fix the Cracks coalition of property insurance carriers and anti-fraud groups celebrated the passage as a way to curtail litigation by windshield shops that the coalition has said are responsible for thousands of unnecessary legal actions and large loss adjustment expenses for auto carriers.

“APCIA praises the Florida Legislature for passing Senate Bill 1002 to help end assignment-of-benefits abuse in auto glass claims and protect consumers from these predatory scams,” Logan McFaddin, vice president of state government relations for American Property Casualty Insurance Association, said in a statement from the coalition. “The number of lawsuits related to AOB auto glass claims has exploded in recent years as a handful of unscrupulous lawyers and auto repair shops have exploited Florida’s current law to line their own pockets at the expense of Floridians.”

It’s the latest piece of legislation designed to reduce claims litigation in Florida. Lawmakers in December ended assignment of benefits in property claims and greatly limited one-way attorney fees in insurance litigation. The Legislature earlier this session approved a far-reaching tort-reform measure.

Louisiana Insurance Commissioner Fines Law Firm $2 Million for Misleading Insurers, Homeowners

“Passage of SB 1002 and the Fix the Cracks initiative is a big win for drivers in our state,” said Caitlin Murray, regional vice president for the National Association of Mutual Insurance Companies. “It’s like belt and suspenders, along with the momentous lawsuit-abuse reforms passed earlier this session, all reflecting the continuing efforts of the legislature to protect Florida consumers.”

Several windshield shop owners testified against the bill, saying that they did not enjoy suing insurers, but that they were left with little choice after full invoices were not paid.

The law would take effect as soon as Gov. Ron DeSantis signs the bill. Members of the coalition urged to sign the governor to sign the bill and he is expected to do so.

Topics Florida

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Fla. Legislature Sends Bill Banning Windshield AOB to Governor

The Florida House of Representatives on Tuesday overwhelmingly approved a bill that would prohibit assignments of benefits for windshield repairs, sending it to the governor for his signature.

Senate Bill 1002 , passed by a vote of 103 to 16, also would bar windshield repair shops from offering gifts to customers, a practice made famous by one company’s advertisements offering “really good steaks.” The measure also would block insurers and agents from “steering” insureds to favored repair shops but would allow insurers to offer premium discounts for policies that do include managed repair plans. The Senate had endorsed the measure 40-0 last month.

A Fix the Cracks coalition of property insurance carriers and anti-fraud groups celebrated the passage as a way to curtail litigation by windshield shops that the coalition has said are responsible for thousands of unnecessary legal actions and large loss adjustment expenses for auto carriers.

“APCIA praises the Florida Legislature for passing Senate Bill 1002 to help end assignment-of-benefits abuse in auto glass claims and protect consumers from these predatory scams,” Logan McFaddin, vice president of state government relations for American Property Casualty Insurance Association, said in a statement from the coalition. “The number of lawsuits related to AOB auto glass claims has exploded in recent years as a handful of unscrupulous lawyers and auto repair shops have exploited Florida’s current law to line their own pockets at the expense of Floridians.”

It’s the latest piece of legislation designed to reduce claims litigation in Florida. Lawmakers in December ended assignment of benefits in property claims and greatly limited one-way attorney fees in insurance litigation. The Legislature earlier this session approved a far-reaching tort-reform measure.

“Passage of SB 1002 and the Fix the Cracks initiative is a big win for drivers in our state,” said Caitlin Murray, regional vice president for the National Association of Mutual Insurance Companies. “It’s like belt and suspenders, along with the momentous lawsuit-abuse reforms passed earlier this session, all reflecting the continuing efforts of the legislature to protect Florida consumers.”

Several windshield shop owners testified against the bill, saying that they did not enjoy suing insurers, but that they were left with little choice after full invoices were not paid.

The law would take effect as soon as Gov. Ron DeSantis signs the bill. Members of the coalition urged to sign the governor to sign the bill and he is expected to do so.

About William Rabb

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• Categories: Southeast News Topics: assignment of benefits , Florida legislature , litigation , Tort Reform , windshield repairs
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