Newsroom | 06.06.2023 l Firm Announcements
Viewpoint: Impact of Florida Tort-Reform Bill Becomes Clear, But Litigation Expected
Byline article by Jessica Hernandez and Norman Waas
On March 24, 2023, Governor Ron DeSantis signed into law House Bill 837, resulting in the enactment of sweeping tort reform (“the Act”). The Act impacts various aspects of the civil justice system. The most salient features of this latest wave of tort reform are discussed below.
Plaintiffs Who Are More than 50% at Fault Recover Nothing
Prior to the amendment of Florida Statute § 768.81, Florida was considered a pure comparative fault state, meaning that a claimant’s contributory fault diminished the amount of damages awarded in proportion to the claimant’s fault, but it did not bar recovery. Now, however, Florida has shifted to a modified comparative fault scheme. This means that although a claimant’s fault will still diminish the amount of damages awarded in proportion to their fault, a claimant will be barred from recovery if they are more than 50% at fault. This bar to recovery does not, however, apply to actions for personal injury or wrongful death arising out of medical negligence.
Lodestar Fee is Sufficient
In cases where courts are authorized to award attorney fees, Florida courts have historically increased the Lodestar amount (i.e., the reasonable hourly rate multiplied by the reasonable number of hours expended) by applying a contingency fee multiplier in certain cases. With the amendment of Florida Statute § 57.104, the Legislature has created a strong presumption that a Lodestar fee is sufficient and reasonable in cases where attorneys’ fees are determined or awarded by the court. This presumption may be overcome only in rare and exceptional circumstances, and evidence that competent counsel could not otherwise be retained is required. Hence, the Legislature has—in effect—virtually abolished the use of contingency fee multipliers except under very limited circumstances.
Near-Elimination of One-Way Attorney Fees
Previously, insurers were generally required to pay attorneys’ fees in first-party cases where the insured prevailed. This is no longer the case. Under the newly created Florida Statute § 86.121, an insurer is required to pay attorney fees only in declaratory actions, and only if (i) there has been a total denial of coverage, and (ii) the named insured, omnibus insured, or named beneficiary prevails in the declaratory action. Notably, this statute does not apply in actions arising under a residential or commercial property insurance policy. One-way fees in property insurance claims litigation were already limited by Senate Bill 2A, approved in December.
Insurer Protections from Bad-Faith Actions
The Legislature has also increased insurers’ protections from bad faith actions. In a nutshell, an insurer may not be sued for bad faith if it tenders the lesser of the policy limits or the amount demanded within 90 days of actual notice of a claim. Alternatively, if there are multiple claimants, insurers may file an interpleader action within 90 days of receiving notice of competing claims or make the policy limits available, pursuant to binding arbitration.
Time Limit for Negligence Actions Cut to Two Years
The time for commencing action for negligence has been cut in half; parties now have two years to file suit under Florida Statute § 95.11(4)(a). The effect of this amendment is that the statute of limitations applicable to ordinary negligence claims now mirrors that applicable to claims for professional malpractice.
Uniform Standards for Calculating Medical Damages
In the newly created statute, the Legislature has provided guidelines regarding the admissibility of evidence to prove past and future medical expenses in personal injury or wrongful death actions. Notably, evidence offered to prove the amount of damages for past medical treatment or services that have been satisfied is limited to evidence of the amount actually paid, regardless of the source of payment.
As to unpaid charges for already incurred medical treatment or services, § 768.0427 sets forth a non-exhaustive list of evidence which may be introduced. The type of evidence which may be admitted is contingent upon whether the claimant has insurance and, if so, the type of insurance. The same holds true for future medical expenses.
Transparency on Letters of Protection
A letter of protection is a written agreement between a patient and a medical provider wherein the latter agrees to defer collection of any medical bills until the patient recovers in a lawsuit. The intent is for the medical provider to be paid from the proceeds of the lawsuit.
Letters of protection are often executed after an attorney refers their client to a physician. The existence of a referral relationship is relevant to potential financial bias. Nevertheless, in the landmark case of Worley v. Central Florida YMCA, 228 So. 3d 18 (Fla. 2017), the Florida Supreme Court held that a lawyer’s referral of a client to a medical provider is protected by the attorney-client privilege.
Under HB 837, the Legislature has completely abrogated Worley. Claimants must now disclose specified information regarding letters of protection, including whether the claimant was referred for treatment. If the claimant was referred, they must disclose the identity of the person who made the referral—even if the referral was made by the claimant’s attorney.
Substantive Versus Procedural
Significantly, whether the enactments brought about by the Act apply to cases filed prior to the effective date or solely to cases filed after March 24th is a point of contention between plaintiffs and defense lawyers. It is well settled in Florida that procedural law applies retroactively, substantive law does not; substantive law affects vested rights and duties, while procedural law constitutes the means for effectuating or enforcing already existing rights.
Although Section 30 of HB 837—which states that the act shall apply to causes of action filed after the effective date—would seem to resolve the question of the new enactments’ temporal reach, statutory language regarding temporal reach is not dispositive. In the Florida Supreme Court case of State Farm Mut. Auto. Ins. Co. v. Laforet, 658 So. 2d 55 (Fla. 1995), the court reviewed a statute enacted in 1990 which expressly stated that it would apply retroactively to 1982. However, the court opined that in determining whether the statute would indeed apply retroactively, it was not the language in the statute that governed. Instead, the nature of the statute was dispositive. Because the court concluded that the statute under review was substantive in nature, it held that despite the clear statutory language regarding temporal reach, it could not be applied retroactively.
Under this framework, at least one Florida trial court has already held that Florida Statute § 768.0427 is procedural and applies to pending cases. On May 19th, Circuit Court Judge Anne-Leigh Gaylord Moe of Hillsborough County entered an order granting the defendant’s motion in limine in the case styled Sharon M. Sapp v. James Brooks (Case No.: 17-CA-5664). In so doing, the judge ruled that § 768.0427 applies to pending cases, notwithstanding Section 30 of HB 837.
Continued litigation can be reasonably anticipated on the substantive-versus-procedural debate.
As appeared in the Insurance Journal. Click here to read the full article.