Although Gov. Ron DeSantis and the Florida Supreme Court have helped the state shed its “Judicial Hellhole” status, the state legislature’s failure to pass key justice reforms this year led a reform group to place the lawmakers on its "Watch" list.
The American Tort Reform Association’s annual “Judicial Hellholes” report, which was published this week, didn’t place Florida as a whole on its list of jurisdictions with out-of-control legal environments. But the state’s legislature earned the No. 1 spot on the study’s “Watch" list.
State lawmakers were faulted for failing to pass legal reforms to address a number of issues that ATRA says results in bloated damages awards, high insurance rates and a deluge of attorney fees flowing to the trial bar.
State lawmakers need to overhaul the system that allows attorneys to game the system to inflate medical damages, according to the report. Too often the invoiced amount for medical expenses, often called the “sticker price,” is used in jury awards, rather than the actual amount paid to a medical facility, the report says.
Another issue that is ripe for reform is how attorneys squeeze excessive damages awards out of insurance companies by filing “bad-faith” lawsuits, according to the study. Such lawsuits cost Florida insurers $4.6 billion annually, leading to increased rates for consumers, ATRA said, but a bill to address the problem failed to pass the legislature in 2020.
The legislature also failed to pass bills to regulate the activities of third-party litigation financiers, who fund civil lawsuits in return for a cut of damages awards, and to reduce the instances of “contingency risk multipliers” in lawsuits, which drive up attorney fee awards.
Despite the ATRA’s criticism of the legislature, the American Property and Casualty Insurance Association (APCIA) is looking forward to working with Florida lawmakers in the coming legislative session to advance reforms and reduce lawsuit abuses in the state.
“APCIA appreciates the work of Florida lawmakers last session to address excessive attorney fee awards, but as ATRA points out, there is much work remaining to curb rampant lawsuit abuse and restore fairness to Florida’s legal system,” Logan McFaddin, the association’s assistant vice president of state government relations, said in an email to the Florida Record.
McFaddin agreed with the ATRA on the areas of civil litigation abuses that need to be reined in by state lawmakers.
“Key areas that need to be addressed include advancing strong bad-faith reforms, bringing transparency and consumer protections to third-party litigation financing, realigning Florida with the federal standard for the use of contingency-fee multipliers, and reducing the practice of inflating medical expenses by requiring medical expenses in personal injury claims to be based on the usual and customary charges for such treatment,” he said.
ATRA’s report did laud Florida lawmakers for protecting businesses and health-care providers from frivolous COVID-19 lawsuits and passing a bill to curb abuses in property insurance claims.