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Florida Bar News

February 1, 2007

House considers offers of judgement statute overhaul

By Gary Blankenship -Senior Editor

Florida does not need a “loser pays” law for civil litigation, but overhauling its offer of judgment statute could help reduce unnecessary litigation.

The Florida House Committee on Constitution and Civil Law also indicated it may look at the law punishing lawyers for frivolous or unjustified delaying actions in a lawsuit.

The committee, at its initial meeting in 2007, held a workshop looking at punishments for filing frivolous lawsuits or engaging in unfounded lawsuit tactics with representatives from business and trial lawyer groups.

“Clearly with the offer of judgment, particularly as it relates to vicarious liability, there may be a potential solution to some of the inequitable results that are being achieved,” said Chair Rep. Marcelo Llorente, R-Miami, as the meeting neared its end.

“The F.S. §57.105 [on sanctioning lawyers] I think needs more looking into. That’s a more complex issue. We hopefully can look at that in more detail . . . at a subsequent time,” Llorente said.

As for passing a law requiring that the loser of a civil lawsuit pay the legal fees and costs of the prevailing party, “Obviously that ... is not much of an issue and leave it at that,” Llorente said.

The committee met with representatives of the Florida Chamber of Commerce, the Florida Justice Association (formerly the Academy of Florida Trial Lawyers), the American Tort Reform Association, and the Florida Justice Reform Institute to discuss various incentives for settling lawsuits before trial and preventing meritless lawsuits or defenses.

Most of the discussion focused on the offer of judgment statute, F.S. §768.79, and the related civil procedure rule, 1.442(c). 

Llorente said the involvement of multiple parties, vicarious liability, and the liability of nonparty insurance companies are all problems.

On vicarious liability, he cited a case where the plaintiff in a medical malpractice case offered to accept $100,000 from the surgeon and $15,000 from the surgeon’s employer. The counter offer was $25,000 from both, and the eventual verdict was $23,500. Because of the vicarious liability loophole, Llorente said the plaintiff’s attorney was able to collect about $99,000 in fees, which is contrary to the intent of the offer of judgment statute.

“The question would be could we fashion a limited text of doing something to the statute that would not create further litigation but would correct the problem that occurred [in that case],” he said.

George Meros, representing the American Tort Reform Association, said businesses have reservations about the way the law is carried out.

“The reality is when it comes to enforcing the offer of judgment actions against individual plaintiffs in personal injury cases, the courts are extremely reluctant,” he said. “On the other hand, when it comes to a defendant, the courts are more literal in interpreting the attorneys’ fees statutes in the same matter. . . .

“The legislature has to look at that soberly and realistically and create a law that the judges cannot parse and is absolutely clear on what the intent is,” Meros said.

But Rep. Jack Seiler, D-Pompano Beach, warned that changing the law can cause further confusion.

“Every time we mess with this, we seem to create more uncertainty in the legal community and in the courts,” Seiler said. “It takes the courts four to five years to wash out the opinions and interpret what the legislature intended to do. Every time it seems like you finally have it, then the legislature changes it again.”

Committee members also discussed whether the issue could better be addressed by a change to Rule of Civil Procedure 1.442(c).

Bard Rockenbach, head of the appellate section of the Florida Justice Association, agreed with Seiler and said the best way to address any problems was a rule change.

“The problem now on vicarious liability is something that can be fixed by the Florida Supreme Court,” Rockenbach said. “If the problem becomes a big enough problem, they will change it.”

But committee members noted they have been told that under the cycle of rule amendments, the court isn’t scheduled to consider civil rule changes until 2010. The Rules of Civil Procedure Committee has approved an amendment to the rule which addressed vicarious liability, but it is not scheduled to go to the court until the 2010 rule cycle.

On sanctions for frivolous lawsuits and defenses, there was less agreement.

Meros said the law on that issue, F.S. §57.105(4), is hard to enforce against plaintiffs because their claim must be for an unforeseeable event. That, he added, is a virtually impossible standard because almost anything can be argued to be foreseeable, including a meteor crashing through a roof.

He also said the appellate courts have not fully analyzed the law, which was changed in 1999.

Rep. David Simmons, R-Altamonte Springs, said the law encourages lawyers to be unprofessional and “cannibalistic” in trying to win fees from each other.

“It has gone a long way to destroying the professionalism . . . that is necessary for an equitable judicial system,” Simmons said.

“My members don’t believe F.S. §57.105 is working,” said David Daniel, vice president for governmental affairs for the Florida Chamber of Commerce. “What they said we need is greater responsibility from attorneys filing law suits. What we would like to see is holding the attorneys who are filing these [frivolous] suits more responsible.”

Llorente said one potential problem is the requirement that the attorney must have misled the client about the validity of the claim or cause for action. That, he said, can be difficult to determine without violating the attorney-client privilege.

There was general agreement that going to a “loser pays” or English system where the loser of a civil case pays the fees and costs of the winner would be a bad idea.

William Large, of the Florida Justice Reform Institute, said the Florida Medical Association backed such a change in 1980 for medical malpractice suits, and then a few years later advocated its repeal.

The law in effect raised the average settlement and jury verdict, and studies showed it led to an increase in lawsuits, he said.

In medical malpractice cases, valid claims with a small value don’t get filed because the resulting modest attorneys’ fees don’t justify the effort, Large said. With a loser pays system, those cases do get filed because there can be more disputes about the attorneys’ fees than the underlying claim because those fees can outstrip the value of the case, he noted.

Meros added that in many cases while defendants had insurance to pay such levies, the plaintiffs did not. He also said, “Attorneys’ fees in a case incentivize the plaintiff’s side to litigate it too aggressively for too long.”

Llorente said at the end of the meeting he would look at getting more information about the frivolous claims statute. He also said he would seek permission from the Safety and Security Council, which oversees the committee, to file a proposed committee bill on offers of judgment.