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Mar 02, 2023 By Jim Ash

But supporters of the bill say one-way attorney fees invite 'lawsuit abuse,' and all Floridians pay the price through higher insurance premiums

Florida lawmakers are risking collateral damage with a “shotgun” approach, when more targeted civil litigation reforms will do, says a veteran South Florida trial attorney.

West Palm Beach attorney Jeff Liggio, managing partner of Liggio & Cornell, has represented policy holders — individuals, families, and small businesses — in insurance disputes for more than 40 years.

The Annapolis grad and board certified civil trial lawyer warns that the sweeping reform measure, HB 837 — which includes repealing the one-way fee provision — would leave his clients at the mercy of the insurance industry.

“I represent people who are desperate, they have cancer, and they’re not getting chemotherapy, and they’re dying, and we have to go and get injunctions,” Liggio said.

But supporters of the bill say one-way attorney fees invite “lawsuit abuse,” and all Floridians pay the price through higher insurance premiums.

In a recent opinion column, Liggio described several clients — hurricane victims, cancer patients, rare disease sufferers — who needed legal help after being improperly denied benefits and care.

The list includes a Lake County couple whose young son was diagnosed with adrenoleukodystrophy, a disease that costs “thousands and thousands of dollars” to manage. The couple’s health insurer lowered a $1 million annual limit to a $1 million lifetime limit, Liggio said.

“You hear people say, ‘I don’t have to worry, I have great insurance,’” Liggio said. “You don’t know if you have good insurance until you need it.”

The reform package would repeal a one-way fee provision that makes insurers responsible for a policy holder’s legal fees and costs — but only if a court determines the company acted improperly, Liggio stresses.

“I could lose,” he said.

Liggio said none of his clients could have afforded to fight an insurance company without the one-way fee provision, a statute that he says Florida adopted in 1959.

“Because of that law, the clients whose situations I described were able to have my law firm represent them, in some cases for several years, in some very contentious and expensive litigation, and we did not charge them a penny for attorney’s fees,” he said.

The House Civil Justice Subcommittee voted 12-6 on February 24 to approve HB 837, over the objection of Democrats, the Florida Justice Association, and other critics who echoed Liggio’s concerns. It has at least one more committee stop before reaching the House floor.

Gregory Rep. Tommy Gregory

House Judiciary Chair Tommy Gregory, R-Lakewood Ranch, told the committee he is sponsoring the measure to restore “equilibrium” to the system.

“You don’t have to wonder if your constituents’ insurance prices are rising too high, because yours are,” he said. “Economic activity responds to incentives — the litigation environment is no different.”

In addition to repealing the one-way fee provision, the measure would switch Florida from a “pure” to a “modified” comparative negligence standard and limit the awarding of fee multipliers to rare and unusual circumstances. A “damages transparency” section would repeal a 2017 Supreme Court decision, Worley v. Central Florida YMCA, and negate attorney client privilege “when a communication is relevant to the lawyer’s act of referring the client for treatment by a health care provider.”

Gov. Ron DeSantis has called for civil justice reforms, and the bill has the backing of House Speaker Paul Renner and Senate President Kathleen Passidomo. With Republicans enjoying a supermajority in the Legislature, passage seems all but assured.

The Florida Chamber of Commerce, Associated Industries of Florida, the Florida Personal Insurance Federation, and the Florida Justice Reform Institute, are enthusiastic supporters.

In a statement, Florida Chamber President and CEO Mark Wilson said that “Florida’s lawsuit abuse spending tops every other state in the nation and accounts for 3.6% of Florida’s $1.4 trillion economy, with no other state surpassing 3% of their state GDP.”

DeSantis and others like to cite an example where a dispute over less than $2 generates a lawsuit, and the awarding of thousands of dollars in attorney fees.

Liggio laments that the example has become a “poster child.”

The suits aren’t being filed by people like his clients, Liggio says, but by “commercial entities, primarily in the medical bill collection area.”

The entities are filing small claims cases “as an assignee of,” the insured, Liggio said.

Liggio recently searched appellate court dockets and found hundreds of “a/a/o” cases. If there are that many in the appellate courts, “there must be thousands in the trial courts,” Liggio says.

One, a Third District Court of Appeal decision, was issued two days before the committee vote.

It involved a dispute between a medical entity — as assignee of an insured — and an automobile insurance company.

A lower court ordered the insurance company to pay $4,782 in attorney fees after the medical entity sued to collect a statutory late payment fee, and postage, totaling $10.55.

The Third DCA reversed the lower court and denied the attorney fee award. The appellate court noted that the insurance company paid the $10.55 approximately four months after the suit was originally filed.

“You can’t justify that, you just can’t,” Liggio says. “You can file a class action, perhaps, if the insurance company is routinely not paying statutorily required penalties and postage, but you don’t file a lawsuit for $10.”

Lawmakers could easily end the practice, Liggio said.

He notes that the Legislature recently prohibited homeowners from assigning their property insurance benefits to a third party, a practice known as “AOB.”

This year, a bipartisan measure would prohibit motorists from assigning their insurance benefits to auto glass repair companies.

“If the Legislature wants to curb these types of insignificant lawsuits by medical bill collection entities that lead to outsized attorney fee awards, there are more limited and focused ways to do so without taking away benefits provided to Florida citizens, families, and small businesses since 1959,” Liggio said.