Business Community Opposition Mounts to ‘Prejudgement Interest’ Bill Pending in Florida Senate

 

Business community opposition mounts to ‘prejudgement interest’ bill pending in Florida Senate
Florida Business Daily Reports | Feb 16, 2017

Business community opposition is mounting to legislation being considered in Tallahassee that would require Florida courts to include prejudgement interest in any final lawsuit award.

Currently, in personal injury cases in Florida, a jury will award an amount, and then interest will be added until the payment is made. Senate Bill 334, introduced by state Sen. Greg Steube (R-Sarasota), will require a court to include prejudgement interest in an award from which the plaintiff recovers both economic and non-economic damage. It also requires a court to include that same interest on attorney fees and costs.

The proposed legislation will effectively mean juries and courts would calculate, and add, all interest from the time of the injury.

Opponents of the measure, including the Florida Justice Reform Institute (FJRI), say the legislation will prove costly for Florida employers, possibly putting Sunshine State jobs at risk.

William Large, president of FJRI,  which advocates for lawsuit reform, said the plaintiffs’ bar is driving the efforts to pass this legislation.

“Effectively it will be another cost driver for businesses in Florida,” Large told Florida Business Daily. “And it is patently unfair because in a tort situation, any potential losses might be speculative in nature. It is unfair for a business to pay for losses not yet identified, not tangible.”

In short, Large argues, it is burdensome, complicated and it takes away discretion from both judge and jury. It is much more simple for an award to be handed down and then interest to be charged to discourage delays in payments.

The threat of post judgment interest encourages the losing party to pay the damages quickly, which is good public policy, according to an FJRI fact sheet on the bill.

“Florida courts have repeatedly said that prejudgment interest is not appropriate in personal injury cases and other lawsuits where the amount of damages is not defined but entirely speculative until a jury determines the amount of damages owed,” the briefing paper continued.

The bills before the legislature require incredibly burdensome, time-consuming calculations, according to FJRI.

“In a case with, for example, hundreds of physical therapy treatments, the jury will have to indicate which treatments are compensable, beginning on what date and for what individual amounts,” said Large. “Then, the court will be required to calculate prejudgment interest through the date of the judgment for each medical expense.”

In the past, prejudgement interest was awarded as a penalty for the defendant’s “wrongful” act of fighting a meritorious claim.

However, Florida courts began to reject this position some 15 years, instead recognizing that prejudgment interest may be a part of a damages award only when there is a defined amount of monetary damages. These include breach of contract cases and tort cases involving a property loss.

A hearing on the bill will take place Tuesday, February 21, 2017 in the Senate Judiciary Committee, of which Sen. Steube is chair.  Sen. Lizbeth Benacquisto (R-Ft. Myers) is vice chair of that committee.

A similar bill was filed in the House and is sponsored by Rep. Shawn Harrison (R-Tampa).

http://flbusinessdaily.com/stories/511082712-business-community-opposition-mounts-to-prejudgement-interest-bill-pending-in-florida-senate