A court referee’s recent conclusion that Florida plaintiffs’ attorney Scot Strems should be suspended for two years sends a forceful warning to other lawyers pursuing lawsuits-for-profit strategies, according to the Florida-based Consumer Protection Coalition.
Judge Dawn Denaro of the 11th Judicial Circuit Court found that Strems, whom the Florida Bar accused of violating its rules in advancing lawsuits against insurance companies, acted in a way that caused problems and frustrations for the public, attorneys and judges around Florida.
“(Strems Law Firm) lawyers had approximately 700 cases on their individual dockets which was impossible to properly manage,” Denaro said in an Oct. 8 report to the Florida Supreme Court. “The result was the mishandling of numerous cases which resulted in a plethora of court sanctions ranging from $5,000 to $15,000 a week, case dismissals, neglected clients and a frustrated judiciary.”
The Consumer Protection Coalition, a group of business leaders, consumer advocates and others who want to end fraud and abuse in insurance litigation, called the two-year suspension recommendation a win for taxpayers who foot the bill for some attorneys’ abuses of judicial procedures and litigation schemes.
“This suspension should serve as a strong warning for other trial bar firms across the state whose business model is also to solicit unsuspecting homeowners and file thousands of often questionable lawsuits to drive up their attorney fees,” the coalition said in an emailed statement to the Florida Record.
“What is especially troubling in this case is that Strems’ and his law firm’s behavior lasted for years – drawing sanctions from judges across Florida and harming consumers all the while – before disciplinary action was finally taken against him.”
Denaro’s report calls on Strems’ suspension to be retroactive to the date of his emergency suspension back in June and that Strems reimburse the Florida Bar for supervision costs during a probation period that will be in place after the 24-month suspension. The terms of probation include his completion of an ethics curriculum.
The coalition also called on the state legislature to look at changing those Florida laws that might encourage abuse of the legal system.
“The Consumer Protection Coalition urges the Florida Legislature to examine the attorney fee provisions in state law that fuel this type of litigation abuse and calls on officials to examine and improve the system for identifying and addressing attorneys who are abusing consumers and the court system,” the coalition’s statement about the Strems case says.
In June, the state-run Citizens Property Insurance Corp. sued Strems, his firm Contender Claims Consultants Inc., All Insurance Restoration Services Inc. and other individuals claiming their conduct cost the insurer millions in losses.
Citizens was set up by the state legislature as the property insurer of last resort.
“This case arises from the conspiracy of the defendants to defraud Citizens into paying for sham first-party property insurance claims,” states the complaint filed in Leon County.
Contender Claims Consultants' alleged home repair scheme began in 2014 when the firm portrayed itself as a public adjusting company, allowing it to present homeowners with contingency fee agreements for Strems’ law firm, according to the lawsuit. The company’s role would next evolve into “loss consultants,” Citizens argues.
“The defendants then referred the business to one another, securing each other’s involvement in thousands of first-party property claims – often without full disclosure to, or knowledge by, the insureds,” the lawsuit said.
The insurance company said in the filing that the defendants regularly discarded building materials that should have been safeguarded so that Citizens investigators could examine them. The defendants also obstructed the insurance investigators’ ability to gain in-person contact with policyholders, the claim says.