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It’s now clear what the Florida Legislature’s regular session will focus on when lawmakers meet on March 7: More litigation that would bring property insurance-type reforms to auto and other insurance lines.
The broad outlines of a potentially far-reaching tort law reform bill, announced Tuesday by Gov. Ron DeSantis and lawmakers leaders, drew immediate approval from insurance groups — and prompted strong backlash from the bar association.
“Florida is under attack. The rights of every Floridian are under attack by insurance companies and corporate elites who believe they can dictate which rights should be upheld and which should be tossed aside,” said Curry Pajcic, Jacksonville trial attorney and president of the Florida Justice Association.
Pajcic has been something of a poster child for those who have called for more limitations on lawsuits in Florida. He was a lead attorney in a 2021 lawsuit that resulted in a $1 billion judgment against two trucking companies after a Florida college student was killed in a pile-up. The trial revealed that truck drivers were under-trained and distracted by their cell phones at the time.
Florida Republican leaders didn’t mention the ruling Tuesday, but said the state’s legal system has spawned far too many “nuclear” judgments and unnecessary lawsuits that cost residents thousands a year in legal costs that feed into insurance premiums and product prices.
“For decades, Florida has been considered a legal hell hole due to excessive litigation and a legal system that benefits attorneys more than victims,” DeSantis said in a statement. “We are now working on legislative reform that will be more consistent with the rest of the state and will bring more businesses and jobs to Florida.”
Proponents had not released a bill as of late Tuesday, but insurance industry officials and lobbyists said it would likely build on the major property insurance reform bills passed at special sessions last year. Senate Bill 2A, which went into effect Dec. 16, eliminated two major cost drivers: one-way attorneys’ fees and assignment agreements for property insurance claims. Senate Bill 2D, passed last summer, prohibited the use of fee multipliers in awarding plaintiffs’ attorneys’ fees in claims proceedings.
The new plan would extend these changes to all lines of insurance, including auto insurance disputes and personal injury claims, said Paul Handerhan, president of the Florida-based Federal Association for Insurance Reform. The idea is to eliminate “frivolous” lawsuits and lower the cost of doing business, DeSantis said.
Florida has been ranked as the most expensive state for property and auto insurance over the past two years, and insurers have blamed excessive litigation for the rise in premiums.
The proposed reforms would also close the loophole in bad faith trials against insurance companies. SB 2A raised the bar and only allowed bad faith claims after breach of contract was proven. But insurance defenders have said more changes are needed to prevent baseless claims.
DeSantis critics and supporters have said it is the latest in a series of moves by Florida Republican leaders to cement a more business-friendly, culturally conservative approach to governance. If next month’s regular session is anything like the recent special sessions, the Republican-majority legislature will quickly approve the reforms with few changes.
stayers
“First, Gov. DeSantis redesigned the Florida Supreme Court by appointing textualist judges who obeyed the law instead of making it,” said William Stander, executive director of the Florida Property and Casualty Association. “Now, with the help of Senate Speaker Kathleen Passidomo and House Speaker Paul Renner, Gov. DeSantis is proposing to reshape Florida’s litigation environment across all lines of insurance by addressing some of the worst artificial cost drivers in the system.”
The National Association of Mutual Insurance Companies also hailed the proposed changes, saying they would “put an end to the litigation craft industry in the state and protect consumers.”
Passidomo, R-Naples, said at the Jacksonville press conference that a small percentage of trial attorneys had abused the legal system and that the Florida Bar Association had done little to stop these practices.
But litigators have pointed out that the bar association has been disciplining attorneys for this reason in recent years. The notorious plaintiff’s attorney, Scot Strems, was disfellowshipped by the state Supreme Court in December after the bar association accused him of filing thousands of frivolous, unnecessary or duplicate insurance claims lawsuits.
Trials and consumer advocates have also noted that insurers have taken other steps to prevent lawsuits. American Integrity Insurance Co. was approved last year for certification that requires homeowners to settle claims disputes through binding arbitration in exchange for premium discounts. Citizens Property Insurance Corp., the state-created airline, will soon have disputes heard by Florida County judges rather than in court.
Passidomo
The recent proposed changes will reinforce the trend away from litigation, are unnecessary and will make it less attractive for lawyers to take cases against insurers, leaving insureds without redress, lawyers said.
“The right to a trial by the JURY, not a trial by the government, is a right that our founding fathers fought for and died for,” Pajcic said. “Justice is the only thing stopping the insurance industry from taking over our state, restricting our liberties and irreparably decimating the rights of our neighbors, family and friends.”
The focus on more tort reform has been pushed in recent weeks by the Associated Industries of Florida, which represents manufacturing interests, and the Florida Chamber of Commerce. But the scope of the changes hasn’t been clear until now — and comes as a mild surprise to some in the industry.
December’s insurance reforms may take up to two years to show results and begin to reduce insurers’ litigation costs. As such, some insurance executives had hoped the 2023 regular meeting would focus on a piece of the puzzle that would offer a short-term lifeline for struggling airlines — an expanded, government-backed reinsurance program.
Reinsurance costs have doubled for some Florida property insurers in the last year, and terms and availability have tightened significantly. Handerhan said he is confident that the Legislature will have the necessary bandwidth to focus on long-term tort law reforms as well as near-term reinsurance solutions.
At least one other torts reform bill was tabled before the regular session. SB 738, by State Senator Jason Brodeur, R-Lake Mary, would limit punitive damages for unfair employment claims and require that claims be made within one year of a state commission’s findings on a complaint. The bill would exempt state agencies from punitive damages.
Photo above: DeSantis at Tuesday’s press conference announcing the compensation reform plan.
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