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Florida Justice Reform Institute

Proposed Florida laws are good news for insurers—as plaintiff lawyers push back

March 6, 2023/in PropertyCasualty360

Property Casualty 360

Parkland shooting victims and survivors were among the South Florida residents gathered Thursday in opposition to the proposed changes.

By Lisa Willis | March 06, 2023 at 12:04 AM

FL Capitol

Florida State Capitol Building in Tallahassee. (Credit: SeanPavonePhoto/Adobe Stock)

As the larger tort reform bill, HB 837, is making its way through the legislature in Tallahassee, South Florida plaintiff attorneys and clients are up in arms over not only about the proposed law, but another bill introduced this week, Senate Bill 1274.

This bill, introduced by state Sen. Colleen Burton, is anticipated to be up in the Senate Tuesday afternoon, and then again in the House on Wednesday afternoon, said Miami lawyer Stephen Forst Cain of Stewart Tilghman Fox Bianchi & Cain.

Cain is in the state capitol fighting the bill and a slew of proposed amendments surrounding the controversial piece of legislation aimed at what Gov. Ron DeSantis says is “comprehensive reforms to decrease frivolous lawsuits and prevent predatory practices of trial attorneys that prey on hardworking Floridians.”

“I think this is Big Insurance companies convincing legislators that we need to be a business-friendly state. The problem is that in the meantime, they’re trampling on the rights of everyday Floridians and making our safe state unsafe,” Cain said. ”That bill, frankly, makes our state unsafe. It disincentivizes business owners and apartment complexes from taking appropriate security measures, and I think will result in more crime not less—all to get big insurance more money.”

‘All types of lawsuits’
Both bills plus the proposed amendments are the talk of Tallahassee and South Florida.

Davie legal ethics professor Robert Jarvis said 837 is a terrible bill.

Jarvis, who teaches at Nova Southeastern University, says at its base level, the bill continues the insurance industry’s long effort to reduce payouts to plaintiffs.

“The industry has never had a more supportive governor or legislature, and that is why it is striking now and finding success,” Jarvis said.

Jarvis said it would be a change to the comparative negligence system—used for decades— and designed to help defendants, who in most cases are companies.

“All plaintiffs, whether crime victims or not, take a chance when they file a lawsuit that they will be unsuccessful,” he said. “And HB 837’s changes are not specifically aimed at crime victims. Instead, they apply broadly to all types of lawsuits.”

Changes would affect premises liability
But that’s of little comfort to former victims of crime who gathered in Miami Lakes Thursday to voice their concerns.

The group was comprised of victims of violent crime, victims of negligence and those who lost loved ones to tragedy, most of which sought financial restitution via lawsuits in the past.

Spokesperson Renee Williams with the advocacy group National Center for Victims of Crime said the proposed changes make her worried for Floridians “… and a little bit angry.”

“I think that there has been a misnomer that this is tort reform,” Williams said. “And while I totally respect some of the policy purposes behind this bill, it’s disheartening that the amendment that joined this week was done with absolutely no consideration to crime victims.”

Williams is concerned with the wording of the “premises liability for criminal acts” by third parties in the bill, which she said alludes to owners or principal operators of multifamily properties and businesses having certain presumptions against liability.

“If business owners and if businesses in the state of Florida have a crime committed on their property, as long as they can point to the perpetrator or the criminal as being responsible, they’re no longer responsible for anything, including common sense safety measures that keep individuals and communities safe,” she said.

‘Slip it through the legislature’
Jarvis, the ethics expert, said some lawyers are reluctant to discuss the proposed changes.

“Plaintiffs’ lawyers, of course, clearly are against it, (but) why won’t any defense lawyers speak? I think the answer is obvious: This is a bad bill for consumers, and its opponents are hoping to slip it through the legislature,” he said. “Recognizing, however, that this is not going to slip through the legislature, they are calling it tort reform, when of course, it is no such thing.”

“I can’t think of any lawyer who might be willing to give you a quote supporting bill, ” Jarvis added.

‘Taking on the trial lawyers’
But some business groups welcomed the bills.

Calling the proposed changes the most consequential civil litigation reform in a generation, William Large, president of the Florida Justice Reform Institute, applauded.

“Governor DeSantis has repeatedly pledged to take on the toughest issues, and he has delivered,” Large said. “Now, with help from the legislature, he’s taking on the trial lawyers in dramatic fashion, and leading Florida towards a more predictable, stable legal environment that focuses on fairness and personal responsibility.”

Meanwhile, Fort Lauderdale attorney John Uustal, founding partner with Kelly Uustal, said the proposed changes sound great at first, but the bills’ authors need to consider the real-life ramifications if the bills were to have been law when the Parkland shooting occurred.

Parkland shooting victims and survivors were among the South Florida residents gathered Thursday in opposition to the proposed changes. They wanted to share their concerns about how they think the bill would affect others like them in the future, should something like the Marjory Stoneman Douglas massacre happen again.

“It would have destroyed the Parkland families’ ability to hold anyone else accountable,” Uustal said. “It would be a get-out-of-jail-free card for all types of businesses and government entities that violate the law or in other ways commit negligent acts that result in people getting killed or hurt.”

https://www.propertycasualty360.com/2023/03/06/proposed-florida-laws-are-good-news-for-insurers-as-plaintiff-lawyers-push-back-414-235060/

https://www.fljustice.org/wp-content/uploads/2024/11/fjri-news.jpg 800 800 RAD Tech https://www.fljustice.org/wp-content/uploads/2024/11/Florida-Justice-Reform-Institute.jpg RAD Tech2023-03-06 15:55:052024-12-05 16:32:09Proposed Florida laws are good news for insurers—as plaintiff lawyers push back
Florida Justice Reform Institute

New Florida insurance law sees challenge from contractors

June 2, 2022/in PropertyCasualty360

 

Property Casualty 360

New Florida insurance law sees challenge from contractors

The new law stops contractors from being able to recover prevailing-party fees from insurers when they are successful in lawsuits.

By Jim Saunders | June 02, 2022 at 12:00 AM

Construction
The new law took a series of steps to try to address those issues, but the

constitutional challenge focuses on part of the measure that deals with whatis known
as “assignment of benefits.” (Credit: maienter9/Adobe Stock) 

The Restoration Association of Florida and Air Quality Assessors, LLC, an Orlando firm that does work like mold testing and leak detection, filed a lawsuit in Leon County circuit court less than a week after Florida lawmakers made property-casualty insurance changes. The contractors group filed the constitutional challenge to fight a new restriction on attorney fees in lawsuits against insurance companies.

It came after lawmakers last week passed a measure (SB 2-D) to try to bolster a troubled property-insurance market that has led to homeowners losing coverage and seeing spiraling premiums. Lawmakers gave final approval to the bill on Wednesday, and Gov. Ron DeSantis signed it on Thursday.

Insurers have long blamed litigation and attorney fees for driving up costs. The new law took a series of steps to try to address those issues, but the constitutional challenge focuses on part of the measure that deals with what is known as “assignment of benefits.”

In assignment of benefits, homeowners sign over their insurance claims to contractors, who then seek payment from insurance companies — often spurring lawsuits about claims and payments.

Contractors in the past have been able to recover their attorney fees from insurers if they are successful in the lawsuits, a concept known as “prevailing party fees.” But the new law stripped contractors of being able to recover prevailing-party fees when they are assigned benefits.

Homeowners can still recover prevailing-party fees if they file lawsuits directly against insurers, but the contractors cannot. The lawsuit alleges that the change violates equal-protection and due-process rights and denies contractors access to courts.

“Claims submitted to insurers for work performed by contractors under an AOB (assignment of benefit) are generally not large in monetary amount,” the lawsuit said. “When the insurer delays, underpays or does not pay a claim at all, contractors are forced to commence an action against the insurer to recover the full amount due for the work performed.Without the corresponding right to recover prevailing party fees, SB 2-D makes it economically unfeasible for the contractor to pursue its lawful rights and remedies in court. Invoices for work performed by contractors under AOBs are generally not significant enough for a lawyer to agree to represent the contractor on a contingency fee basis and it is not economically reasonable for the contractor to … pay a lawyer on an hourly basis to recover the amount(s) owed.”
 
The lawsuit said invoices for work done by Air Quality Assessors and many other members of the association often total $2,500 to $3,000.

“The inability to recover prevailing party attorneys’ fees will effectively shut the courthouse door to plaintiffs because it will be cost-prohibitive to pay an attorney for these types of small claims,” the lawsuit said.

But William Large, president of the Florida Justice Reform Institute, a business-backed group that lobbies to reduce litigation, said in a statement after the law passed that “property insurance lawsuits have exploded over the last several years, overwhelming Florida’s insurance market.”

“Senate Bill 2-D contains significant litigation reforms and gets to the heart of escalating rates and limited coverage — lawsuit abuse,” Large said.

Assignment of benefits has long been a contentious issue in the insurance industry. The Legislature in 2019 put additional restrictions on assignment of benefits, at least in part because of an increase in residential water-damage claims.

But contractors contend that assignment of benefits helps homeowners who are unfamiliar with making sure insurance claims are handled properly.

“AOBs are not new and have been used for a long time, especially during emergency weather situations,” the lawsuit said. “In Florida, AOBs are prevalent in the residential property context when homeowners suffer damage to their home and need to hire contractors to repair the issues.”

The lawsuit, which includes seeking a preliminary injunction against the law, names as defendants Melanie Griffin, secretary of the state Department of Business and Professional Regulation, and Donald Shaw, executive director of the Construction Industry Licensing Board. The case has been assigned to Leon County Circuit Judge Layne Smith, according to an online docket.

https://www.propertycasualty360.com/2022/06/02/contractors-challenge-new-florida-insurance-law-414-222778/ 

https://www.fljustice.org/wp-content/uploads/2024/11/fjri-news.jpg 800 800 RAD Tech https://www.fljustice.org/wp-content/uploads/2024/11/Florida-Justice-Reform-Institute.jpg RAD Tech2022-06-02 15:53:362024-11-24 22:33:01New Florida insurance law sees challenge from contractors
Florida Justice Reform Institute

Proposed Florida law would aid insurance companies, cut attorney fees

January 23, 2020/in PropertyCasualty360

 

Property Casualty 360

Proposed Florida law would aid insurance companies, cut attorney fees

Reactions to the new bill reveal a sharp divide between homeowners’ attorneys and insurance companies.
By Raychel Lean | January 23, 2020 at 12:00 AM | The original version of this story was published on Daily Business Review

Double dipping

Insurance companies claim property insurance lawyers have been “double-dipping”
by applying fee multipliers in too many cases, while lawyers claim the multiplier
measure is there for a good reason. (Photo: BeeBright/Shutterstock)

A bill working its way through the Florida Legislature would curb the use of attorney-fee multipliers — bad news for plaintiffs counsel who represent clients on a contingency basis, but a boon for the insurance industry, which claims attorneys often charge three times their hourly rate for routine property cases.

Senate Bill 914 has jumped its first hurdle, gaining approval from the Florida Senate Committee on Banking and Insurance. It reflects a conflict between attorneys — who say the proposed law would prevent homeowners from suing insurers — and insurers, who say some lawyers take advantage by tripling their fees for routine cases.

Fee multipliers are meant to protect homeowners who can’t afford to bring suit unless attorneys agree to take on difficult and high-risk litigation on a contingency basis. Lawyers bear the cost of the litigation, but if they win, their clients could apply a contingency risk multiplier.

The proposed law would prevent this.

The bill by Republican Sen. Jeff Brandes would cap attorney fees for plaintiffs. It would award fees through the lodestar method, which multiplies a reasonable hourly rate by the number of hours attorneys worked.

Tallahassee attorney Michael Carlson agrees it should be more difficult for plaintiff counsel to seek fee multipliers.

“It is too common now, throughout Florida, for courts to award a fee multiplier on what we would call a relatively simple case,” said Carlson, who represents insurance companies and is president and CEO of the Personal Insurance Federation of Florida.

Critics suggest fee multipliers were meant to have a narrow scope. They say the measure was introduced decades ago to encourage attorneys to take on complex or controversial federal civil rights and environmental torts cases because potential clients were struggling to find representation. The U.S. Supreme Court eventually limited its use, they argue. And in the 1992 case City of Burlington v. Dague, former Justice Antonin Scalia wrote a majority opinion rejecting the contingency fee model.

Carlson claims multipliers are no longer necessary for property insurance cases in Florida because there’s no shortage of competent counsel.

“If you have a tree fall on your roof, and you have a dispute with your insurance company over that tree having fallen on your roof and you need to hire a lawyer anywhere in Florida, you will not have a problem,” he said.

‘Army’ of lobbyists?

Plaintiffs attorney William F. “Chip” Merlin of the Merlin Law Group in Tampa argued against the bill at Tuesday’s hearing, claiming that although it was “well-intentioned,” it will hurt some policyholders who won’t be able to find competent lawyers to handle declined insurance claims.

“The insurance companies do not ever want to be held accountable for wrongfully denied claims and claims that they are slow to be paid, and certainly do not like to be sued at all, even if their competitors are committing illegal actions,” Merlin said. “So there is always an army of insurance lobbyists claiming that a new crisis exists to reduce policyholder rights or make it easier to skirt consumer protection laws and regulations.”

Merlin notes that while insurance companies have teams of lobbyists, policyholders “have jobs and are working on their own life, and simply do not show up in Tallahassee.”

“People do not buy insurance to have their claims turn into lawsuits,” Merlin said. “They just want to be paid fairly.”

In most instances, Merlin claims policyholder’s attorneys don’t get a multiplier but says in certain small cases where upfront costs outweigh the amount in controversy there’s no other incentive for attorneys to take them.

William Large of the Florida Justice Reform Institute stressed the personal injury field has survived without fee multipliers and claims there’s already “an extraordinary advantage” under Florida’s one-way attorney fee statute, allowing recovery for plaintiffs who prevail against their insurer.

“That is fair,” Large said. “That’s a real incentive for insurance companies to make sure they’re settling cases appropriately for insureds. But then to get a multiple on top of that isn’t fair, so we’re trying to make sure that the multiplier is not used except in the most extraordinary and exceptional circumstances.”

However, a 2019 law has already restricted the use of assignment-of-benefit agreements, which allow policyholders to sign over their insurance rights to contractors — some of whom claim would give homeowners “the monumentally short end of the stick.”

Carlson said he sees this bill as restoring the law to its original purpose and claims its passage could reduce insurance rates for consumers.

“The lawyers are making their hourly rate, they’re getting paid for representing their client when they win,” Carlson said. “What’s become much more commonplace in the 2017 period forward is lawyers in these same cases, when they win and they’re having their lodestar amount calculated, they ask for a separate amount as well.”

He points to a 2017 Florida Supreme Court case, Joyce v. Federated National Insurance Co., which made it easier to obtain fee multipliers. In it, Justice Charles Canady wrote a dissent that said the court had overreached because the fee multiplier should only be used in rare circumstances.

But as Merlin sees it, the focus should be on the fact that policyholders are having to sue their insurers in the first place.

“The insurance lobby points to a few cases about how much the winning policyholder attorney made, rather than talk about why the claim should never have been denied in the first place, and that the insurance companies’ attorneys fought and fought the payment to the policyholder because that is the only way a case can generate large fees,” Merlin said. “Instead, they fight with their own attorneys who are paid on an hourly basis, win or lose, often to wear down the policyholder.”

The bill still has a way to go until it lands on Gov. Ron DeSantis’ desk, having only gone before one committee in the Senate. The bill will go to two more committees before going before the full Senate, then the House of Representatives.

https://www.propertycasualty360.com/2020/01/23/proposed-florida-law-would-cut-attorney-fees-aid-insurance-companies-414-170657/?slreturn=20200024152106

https://www.fljustice.org/wp-content/uploads/2024/11/fjri-news.jpg 800 800 RAD Tech https://www.fljustice.org/wp-content/uploads/2024/11/Florida-Justice-Reform-Institute.jpg RAD Tech2020-01-23 15:58:502024-11-25 10:02:44Proposed Florida law would aid insurance companies, cut attorney fees
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