Florida Justice Reform Institute, Logo

Orlando Sentinel

Publix, Disney aim to cut lawsuit awards for accident victims

July 10, 2013 | By Jason Garcia, Orlando Sentinel

Two of Florida's largest businesses — Publix Super Markets and Walt Disney World — are spearheading an effort to cut the size of civil-lawsuit awards, which could lead to enormous savings for the frequently sued companies through smaller jury verdicts and pretrial settlements.

Their goal is to persuade state lawmakers to rewrite the way medical damages are determined if a business is found responsible for an accident, whether a customer slips in the aisle of a grocery store or a tourist is hurt aboard a theme-park ride.

Millions of dollars are at stake. Records obtained by the Orlando Sentinel show that Publix alone spent more than $37 million last year defending itself against or settling civil lawsuits, with about 80 percent of those costs incurred in Florida. Other documents show the Lakeland-based grocery chain expects it could save at least $1 million a year, and potentially much more, if lawmakers enacted its proposed changes.

Businesses lobbyists argue that the current system has been manipulated by shrewd trial lawyers and by complicit doctors who exaggerate the cost of medical services and perform more work than is necessary on accident victims — which then encourages juries to award much larger amounts in damages.

"Inflated medical costs is one of the major cost drivers in tort litigation today," said William Large, president of the Florida Justice Reform Institute, a Tallahassee-based group that lobbies for limits on lawsuits. Publix and Disney are two of the organization's largest donors.

Legislation that records show was written largely by Florida Justice Reform Institute lobbyists failed to pass this year's session of the Legislature amid opposition from trial lawyers, doctors and some hospitals, including the Orlando-based Florida Hospital system. But the business lobby plans to resurrect the issue in 2014.

Next year could be pivotal. Republican Gov. Rick Scott, a former businessman who has made curbing personal-injury lawsuits a top priority, faces a potentially difficult re-election campaign after the 2014 legislative session. And his Democratic opponent could well be former Gov. Charlie Crist, who now works for Orlando-based Morgan & Morgan, a top personal-injury law firm.

The controversy stems in large part from the murky nature of health-care costs. Though doctors, hospitals and other medical-service providers often present eye-popping initial bills, the actual amounts they are paid is usually less, with lower rates either mandated by government-run programs such as Medicare or Medicaid or negotiated by large health-insurance companies.

In civil lawsuits, the jury typically is told the amount a patient has been billed for medical treatment, rather than any final charges. After the jury issues a verdict and awards damages, the trial judge will go through the bills and reduce the award to reflect the actual charges and ensure that the plaintiff does not earn an unwarranted windfall.

But businesses contend there are many flaws in this approach. For instance, though a judge might reduce the award for the medical costs that a victim has already incurred, they say presenting the oversized initial bills still prompts juries to award unnecessarily large amounts for future medical costs and even for punitive damages.

What's more, they say litigants can sidestep the process through a mechanism known as a "letter of protection." Under a letter of protection, a doctor agrees not to collect any payment from a patient until after litigation is concluded. As a result, there are no actual charges that could be used to lower the jury's award.

Businesses are lobbying for a package of changes, which they are marketing as "Truth in Damages."

First, they want juries to see any actual amounts a victim pays for medical treatment, rather than only the initial billed amounts. Second, in cases where a victim has yet to make any payments — such as when they are using a letter of protection — they want juries to determine damages based on "customarily accepted" amounts. And lastly, they want to prohibit accident victims from being awarded any payments for medical treatments deemed unnecessary.

Representatives for Publix and Disney would not answer detailed questions about the legislation, saying only that they support it.

Plaintiff lawyers accuse the businesses of trying to squeeze legal savings out of innocent victims — people who were injured, after all, only because of corporate negligence.

The Florida Justice Association, which represents the state's trial lawyers, says allowing victims to recoup only "customarily accepted" amounts would be akin to imposing a rate cap on medical services. It says that amount would also inevitably be very low, dragged down by the reduced rates paid by large insurers, who can get discounts because of the volume of patients they cover.

It warns that a doctor might refuse to treat an uninsured accident victim if the doctor could expect to be paid only at the same rate as a patient covered by a large insurer — and even then, only if that patient wins a lawsuit.

Also, lawyers say innocent victims would be stuck with the bills themselves if a smaller award for future damages turned out to be inadequate many years down the road.

Lawyers, whose fees depend on the size of the awards they win for their clients, aren't the only ones alarmed. The Florida Medical Association, which represents doctors, says it opposes any effort to interfere with a doctor's right to enter into a letter of protection.

Lobbyists for Florida Hospital have told lawmakers they fear losing money if procedures are later deemed unnecessary and neither the negligent business nor the accident victim has to pay.

[email protected] or 407-420-5414