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Tort Reform: When Elections Should Have Consequences

By NANCY SMITH - March 22, 2015 - 7:00pm

At any time during a Florida legislative session, trial attorneys in the Capitol are like pollen in a field of ragweed. They're everywhere. Walk anywhere, you're infected. But this is the week it gets worse.

Starting Tuesday, a quartet of tort reform bills comes before various committees. Expect trial attorneys to choke the halls, advocating against anything that threatens to halt their gravy train.

The real issue here is how the GOP lawmakers will respond this time. Will they remember their promise to the people who supported and elected them to make common-sense reforms to our civil justice system? Were they serious about improving the lot of working people, of families and students, by fostering the health of a strong business environment? Or will they roll over in a squishy heap and let the lawyers turn them into road kill?

 "Every year Associated Industries of Florida looks to improve the environment for jobs and the economy, and to make the state more competitive for business," says AIF president and CEO Tom Feeney. "And I think we have a lot to brag about. But one area where we fall down is civil justice." Florida's "lottery mentality" of finding a deep-pocketed lawyer who will file an inflated claim and go for broke drives up costs for everybody, Feeney says.

Each election year while campaigns are in full cry, I hear big talk from Republican legislators. They say they understand that abusive tort litigation and the underlying liability that tort cases entail hurt the economy. They make it hard for businesses to maintain and create new jobs.

Certainly, they should know all that. They hear it like a jungle drum beat from the James Madison Institute, the Florida Chamber of Commerce, the Florida Retail Federation -- in fact from all the organizations and associations fighting every day to make Florida a pro-business, anti-litigious place.

But year after year, it seems, the trial lawyers find sympathy and support among conservative Republicans, even though, frankly, the Morgan & Morgan crowd did nothing for them. This year is no exception. By more than 8-to-1, trial lawyer money went to Democratic candidates and liberal issues. (Check out the report of PAC contributions involving the Florida trial lawyers that sued the tobacco companies. It's in the attachment below this story.)

One example of these lawyers' disdain for GOP legislators is visible in the contribution of Citizens Alliance for Floridas Economy -- a committee set up specifically to target Republican House candidates Colleen Burton of Lakeland and Julio Gonzalez of Venice.  CAFE spent $498,500 -- half a million dollars -- to defeat just these two. They were unsuccessful, but think about it ...

There is a built-in prejudice within the Florida court system in favor of litigation. It's why the American Tort Reform Association ranked the Florida Supreme Court as the nation's fourth biggest "judicial hellhole." Within the system, the perception is that judges are smarter than ordinary people and, therefore, if issues are left up to legislators, they may well screw things up. So trial lawyers work hard to keep Tallahassee lawmakers out of their business.

The result: Virtually everyone in Florida -- from neighborhood grocers and family physicians to local government service providers and parents trying to make decisions about their childrens sporting activities -- has felt the impact of the state's "judicial hellhole" environment.

Yet, here we are. The well-organized, very aggressive trial lawyer lobby -- at this moment one of the largest lobbies working the Capitol -- is running around, enlisting the cooperation of Republican representatives and senators.

It's time for Republicans to remember that elections do -- or should -- have consequences.

Here are the bills likely to see the light of day in committee this week:

1. Damages in Personal Injury Actions (Accuracy in Damages)
House Bill 1199 by Larry Metz and Senate Bill 1240 by Garrett Richter.

Provides for calculation of damages; specifies that certain evidence may not be used for certain purposes; provides that difference between amount originally billed by health care provider who has provided medical or health care services to claimant and actual amount remitted to provider is not recoverable; limits amount of damages in certain actions involving liens or subrogation claims by certain payors..

2. Civil Remedies Against Insurers (Bad Faith)
House Bill 1197 by Mike Hill, Kathleen Passidomo and Senate Bill 1088 by Jeff Brandes.

Requires insureds, claimants, or persons acting on their behalf to provide insurer with written notice of loss as condition precedent to statutory or common-law action for third-party bad-faith failure to settle insurance claim; provides that insurer is not liable for claim of bad-faith failure to settle claim if certain conditions met.

3. Punitive Damages (General Tort Liability)
House Bill 1067 by David Santiago and Senate Bill 978 by Garrett Richter.

Deletes language applying punitive damages limitation for certain civil actions prospectively only and applies it to all actions in which judgment has not been entered, regardless of when cause of action arose.

4. Assignment of Post-loss Insurance Policy Benefits (Insurance Claims)
House Bill 669 by Insurance and Banking Subcommittee and John Tobia and Senate Bill 1064 by Dorothy Hukill.

Provides that assignment or agreement that transfers authority to adjust, negotiate or settle claim is void; prohibits assignment of insurable interest except to subsequent purchasers after loss; authorizes insurance policy to prohibit assignment of post-loss benefits; provides exceptions; provides requirements relating to communications regarding claims; revises time periods relating to initial, reopened and supplemental property insurance claim notices and payments; making conforming changes to Homeowner Claims Bill of Rights.

One of the biggest abuses in the courts is the awarding of punitive damages. They are infrequent, but their frequency and size have grown in recent years. More important, says the American Tort Reform Association, they are routinely asked for in civil lawsuits, and when astronomically large amounts are rewarded, they seriously distort attempts at settlement and lead to wildly inconsistent outcomes in similar case.

It's those wildly inconsistent outcomes that trouble AIF's Feeney."We think if punitive damages are going to be assessed, they should apply equally to all industries," Feeney explained, "and they should be available only in limited cases." He said the tobacco industry, for instance, has paid for actual damages, as it should have, but it's also paid millions of dollars in punitive damages more than once. "All companies should be treated equally under the law."

Feeney says Florida needs legislation that addresses the problem of multiple punitive damages awards to protect against unfair overkill.

In a conversation last Friday, William Large, president of the Tallahassee-based Florida Justice Reform Institute, explained the problem more succinctly than I have here:

"The trial bar is often adverse to many Republican candidates during elections," Large said, "but they're like the prodigal son. They come back year after year and they're seemingly forgiven for being on the opposite side of pro-business, Republican candidates. And tort reform is often not addressed in the state Legislature."

The Florida Chamber is partnering this year with the Florida Justice Reform Institute and the U.S. Chamber of Institute for Legal reform to fix Florida's broken legal climate, which costs families $3,400 a year. Surely, that gives Republican lawmakers impetus to get tort reform done now, this year.

This year of all years, why would they want to cave? It's doubtful the party or the sentiment ever will be more dominant than it is today -- supported by a governor who wants Florida's business climate to lead the nation. Time for a Republican reality check. Time for Repubs to dance with the partner who brung 'em.

Reach Nancy Smith at [email protected] or at 228-282-2423.

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