South Florida’s recent placement on the American Tort Reform Association’s “Everlasting Judicial Hellholes” list has prompted a Florida small business group to urge state lawmakers to recommit themselves to key civil justice reforms.
“Just because we have more problems (in the wake of the COVID-19 pandemic) doesn’t mean this problem has gone away,” Bill Herrle, executive director of the National Federation of Independent Business’ Florida chapter, told the Florida Record.
Among the recurring civil litigation issues that have plagued South Florida over the past two decades are a fraud-filled “no-fault” auto insurance system, inflated damages awards and “bad-faith” (intentionally dishonest) third-party litigation against insurers.
Even amid existential issues that the pandemic has created for Florida small businesses, policymakers should leave some bandwidth to tackle legal reforms in the next legislative session, according to Herrle.
Citing a study this year by John Dunham & Associates, the ATRA report found that excessive tort costs are hamstringing the state economy to the tune of $251 per person.
“According to this study, the savings from reforming Florida’s tort system could support an additional 71,971 jobs and $11.52 billion in increased economic activity,” the report says.
Herrle’s tort-reform priorities include addressing “bad-faith” litigation, encouraging truth in damages awards and bringing some transparency to so-called “litigation financing.” Bad-faith insurance lawsuits lead to more protracted litigation by plaintiffs, he said.
In addition, attorneys continue to inflate plaintiffs’ medical costs, leading to higher damages awards, according to Herrle. Often, initially invoiced amounts for medical expenses are presented in court, the ATRA report says, but that amount is typically threefold higher than what the health care provider accepts.
“Right now juries are prohibited from having any apples-to-apples comparison (on medical costs),” he said.
On this issue of litigation financing, in which third parties provide a level of funding to plaintiffs in cases that appear to have a good return on their investment, the legislature should require that judges and juries be aware of such financial agreements, Herrle said.
“We’re very concerned that this is a growing practice in litigation,” he said. “It looks like people are wagering on the outcomes of our justice system.”