Florida Tort Reform Law Seeks to Limit Insurance Litigation

A recently-signed Florida law seeks to discourage insurance litigation by imposing several new standards and limits. The bill’s supporters claim that its provisions will reduce frivolous lawsuits, protecting businesses and individuals. Opponents, however, note that the bill’s provisions protect insurance companies at the expense of injured people.

What’s In the Florida Law?

Signed into law by Governor Ron DeSantis, HB 837, contains a number of provisions intended to make it more difficult for injured persons to sue insurance companies and more difficult to recover awards for various losses, including attorney’s fees.

These provisions include:

• Shortening the statute of limitations for negligence claims
• Creating “standards for bad-faith actions”
• Enacting “standards for evidence to prove damages for medical expenses in certain civil actions”
• Requiring disclosures when claims for medical expenses are rendered under letters of protection
• Changing comparative fault requirements
• Granting a presumption against liability to landlords of multifamily properties when security measures have been installed, if injuries result from criminal activity on the property
• Revising immunity provisions related to trespassers
• Altering provisions that affect offers of judgment and demands for judgment
• Limiting plaintiffs’ ability to seek attorney’s fees in certain actions against insurers
• Establishing a rebuttable presumption that Florida’s “lodestar fee” is a “sufficient and reasonable” attorney fee in civil actions

The bill was enrolled in the Florida House of Representatives and signed into law by Governor DeSantis on March 24, 2023, with minor changes from its original submitted form.

Pros and Cons of Florida’s Tort Reform Approach

Governor Ron DeSantis and the Republican legislators supporting the law state that it will reduce the rate of “frivolous” lawsuits in Florida, thus allowing businesses to operate with more confidence in the state. Proponents also claim that by limiting certain costs related to lawsuits, individual Florida residents will benefit as well.

Opponents of the law, however, note that it destabilizes insurance litigation in ways that favor insurance companies at the expense of injured individuals.

Attorneys opposed to the law note that the bill shortens statutes of limitations, makes contributory negligence a higher bar for injured plaintiffs, restricts the medical cost-related evidence plaintiffs can bring to court, and hampers plaintiffs from bringing bad-faith claims against carriers while still requiring plaintiffs to act in good faith themselves. Attorneys opposed to the new law also note that it will force more injured people onto Medicaid, rather than requiring insurance companies to provide the benefits the injured person paid for when they purchased coverage.

For injured Florida residents, the law’s consequences are deeply personal. One individual who testified before the Florida state legislature estimated that under the new rules, he and his family would have been destitute within “seven to 10 years” – leaving him with no options, as the amputation of all four of his limbs prevented him from doing any work or even handling daily personal care tasks like dressing himself or brushing his teeth.

The Impact of Florida’s Tort Reform Law

To achieve their stated goal of tort reform, HB 837’s proponents aim at making these claims less lucrative for personal injury lawyers and firms. The law does this in two main ways. First, it focuses on making insurance lawsuits harder for plaintiffs to win. Second, it limits the ways in which plaintiffs’ attorneys can force insurance carriers to pay attorney’s fees – particularly in cases where the insurance company rejected or low-balled a valid claim.

One of the most significant provisions in the law is a shift from a comparative negligence system to a contributory one. Under the new law, injured plaintiffs would be barred from recovery if they are found to be more than 50 percent liable for their injuries.

Even plaintiffs who clearly were not at fault for their injuries will face greater difficulties securing compensation. The law’s provisions limit the evidence plaintiffs can present regarding their medical bills. Under the new rules, plaintiffs would be allowed to present evidence only of the bills they have paid out of pocket. Plaintiffs would also have to disclose whether their medical provider issued a “letter of protection” refraining from collecting on bills until the close of the plaintiff’s lawsuit.

In addition, the law would prevent insured injured plaintiffs from suing an insurer that failed to handle their claims in good faith – but injured plaintiffs would still be required to act in good faith in their own dealings with the insurance company. Bad-faith lawsuits against carriers could not be based on carrier negligence, either.

For attorneys, the law makes pay arrangements more difficult by limiting the attorney’s fees plaintiffs can recover in insurance cases. The law ends Florida’s one-way attorney fee provision, enacted in 1893.

The law is likely to create sweeping changes to Florida’s insurance litigation landscape. The cost of these changes will be borne disproportionately by plaintiffs seeking good-faith dealing and compensation from insurance companies.