Florida’s construction industry says it’s being pummeled by civil lawsuits alleging structural defects even as Gov. Ron DeSantis signed COVID-19 legal liability reforms for businesses and health care providers earlier this year.
Although the coronavirus-related legal protections passed the legislature, a House bill that would have restricted what the building industry says are litigation abuses died in the Judiciary Committee. The result will be higher litigation-driven insurance costs for the construction industry, according to the Florida Home Builders Association.
“Florida is on the verge of a major insurance disaster as rising liability insurance premiums are destroying subcontractors and small businesses across the state,” the association’s CEO, Rusty Payton, told the Florida Record in an email.
A key part of the problem is trial attorneys exploiting provisions of the state’s 2003 Notice and Right to Cure statute, according to Payton. That law allows lawyers to file broad and sometimes disingenuous claims over defects against multiple subcontractors, he said.
“Today, offers by homebuilders to repair alleged defects are routinely rejected as the goal is to receive financial settlements rather than fixing the problem,” Payton said.
And once an offer to repair a construction defect is rejected, a contractor has no choice but to turn the matter over to its insurance company, he said.
“These settlements are forcing general liability premiums to double and even triple, and in many cases forcing small companies out of business,” Payton said.
HB 21, which was authored by Rep. Alex Andrade (R-Pensacola), would have required a potential claimant to try to resolve a building defect or building code violation before filing any legal action, according to the legislature’s analysis of the legislation. It would have indicated that the claimant has no cause of action if the contractor satisfactorily fixed the problem at no cost.
The Florida Home Builders Association expressed concern that the state’s construction worker shortage could increase if reforms to the 2003 law are not enacted by 2022.
“The focus must be on repairing the defect,” Payton said. “These small businesses and homebuilders power Florida’s economy, create jobs and increase the housing supply.”