Bill to pay interest on personal-injury damages clears committee
BY DANIEL DUCASSI - |01/20/2016 01:49 PM EST
Sen. Rob Bradley.AP Photo/Steve Cannon
TALLAHASSEE — The Senate Judiciary Committee passed a bill Wednesday that would award interest on certain damages, from the date of those damages, to plaintiffs who win personal injury lawsuits — but only after an amendment crafted in the middle of the meeting.
The award of interest from the date of the damages, as opposed to from the date of the judgment, is known as prejudgment interest. Under the bill (SB 1086), such interest would accrue only for economic damages, like a hospital bill, and not for things like pain and suffering.
While the bill (SB 1086) received ample support from the Florida Justice Association, which represents the state’s trial attorneys, it faced sharp opposition from business groups and insurance companies.
“What we’re dealing with are economic damages where people have been harmed and they’re seeking to be reimbursed," said Matthew Posgay, a trial attorney with the FJA. "This is not an award, this not a lottery. This is a reimbursement for the economic damages they’ve actually suffered.”
His group's general counsel Paul Jess explained in an interview with POLITICO Florida ahead of the meeting how his group views the bill: “If someone owes the money and you have to sue them in order to get them to pay, they have been holding on to what has been, in truth, money that should have been paid to you … for the entire length of the litigation.”
The prospect of having to pay prejudgment interest on a claim will encourage businesses and people who have harmed someone to settle claims early, rather than go through litigation, Posgay added.
But Mark Delegal, representing the Florida Chamber of Commerce, argued the bill needed more balance. Business groups also argued that personal injury cases are different from other types of cases and should be treated differently.
William Large, president of the Florida Institute for Justice Reform, a business-backed group that lobbies on tort issues, argued that "personal injury litigation is speculative in nature,” often dealing with subjects like the medical necessity of a procedure and the correct cost.
But Posgay noted that 33 other states already have similar systems in place, and that prejudgment interest is in place for other types of cases that could be considered speculative.
“If we allow it for businesses in lost profits cases, why can’t we allow it for the plaintiff who’s … been economically harmed? It doesn’t make any sense, it’s inconsistent to do it any other way," he said.
During the hearing's public discussion portion, the bill's sponsor, Sen. Rob Bradley, a Republican from Fleming Island, worked with colleagues behind the dais. They came up with an amendment to address one of the thornier points of contention in the bill: interest on attorneys' fees.
After crafting a mid-meeting amendment to eliminate interest for attorneys' fees and costs, one senator pointed out that costs shouldn't be excluded from the amendment, and staff wrote a new amendment removing interest only for attorneys' fees while the panel heard another bill.
The committee adopted that amendment, in addition to an earlier one that eliminated retroactivity. The bill was passed, with Sen. Aaron Bean the lone dissenting vote.
“I’m a pro-business legislator, I’m a business owner, but I also live in the world," Bradley told POLITICO Florida after the meeting. "And most business owners that I know and talk to, including myself, understand the value of fairness and the time value of money and the idea that if someone is holding my money for a time period, that just giving me back what was owed to me three years prior is not enough. You should also get the interest on that money.”
The bill still needs approval from the Appropriations Subcommittee on Criminal and Civil Justice before it heads to the full Appropriations Committee. The House version of the bill has yet to be heard by any committee.