Nearly 54,000 auto glass lawsuits were filed in Florida during the first three quarters of 2023 despite the passage of recent legal reform measures, far outpacing the level of such litigation in any recent year, new data shows.
But that spike in the lawsuits is not surprising given how two legal reform measures passed earlier this year were worded, according to Tallahassee attorney Ashley Kalifeh, who has monitored auto glass lawsuit statistics for the Florida Justice Reform Institute. So far this year, 53,816 lawsuits were filed – most of them by a small number of attorneys – according to Kalifeh, and that compares to just under 35,000 in 2022.
In the second quarter of this year, 10 Florida lawyers generated more than 21,000 lawsuits, or about 86% of all auto glass lawsuits filed during the April-through-June time period.
Senate Bill 1002, which took effect July 1, bars auto repair shops from providing inducements, such as gift cards, to customers for making an insurance claim for auto glass replacements or repairs. It also prevents auto policyholders from entering into an assignment-of-benefits (AOB) agreement to obtain an auto glass repair or replacement.
Over the past decade, attorneys have regularly filed AOB claims against insurers if the insurers fail to pay inflated costs for the auto glass work, critics of the practice have argued. Reform proponents have also said that such litigated AOB claims have pushed up the costs of auto insurance in Florida.
“The tort bill, House Bill 837, had language in it that basically said it doesn't become effective on policies until they're renewed or reissued,” Kalifeh told the Florida Record. “So even though the bill was effective March 24, that means that all policies issued after that date have to be renewed or reissued in order for the law to be applied to them.”
So because auto policies are issued for six months, the reform measures passed by the state Legislature this year in effect contain a grace period in which lawyers can continue to file these types of lawsuits.
“What we saw was not surprising in that they knew the game was coming to an end, and so they absolutely stepped on the gas pedal while they had the chance,” Kalifeh said. “We gave them a six-month heads-up that the game was about to be up.”
HB 837 barred the use of contingency-fee multipliers to determine appropriate attorney fees in civil lawsuits; repealed the state’s one-way attorney fee statutes, which have been used in cases against insurance companies; and reduced the statute of limitations in many negligence cases from four years to two.
Kalifeh said she expects a dramatic reduction of auto gas lawsuits in 2024, when the reforms passed this year will be in full force.
“2024 is going to be a good year for both property and auto glass,” she said, assuming the attorneys who have specialized in this type of litigation don’t find a work-around.
In turn, insurers should start to see the litigation trend lines going down in the coming year, which may allow the companies to build confidence about improved financial conditions and forecast future reductions in lawsuits, according to Kalifeh.
The AOB auto glass lawsuits tend to not be apparent to policyholders who sign over their policy rights to a third party, she said. If you examine 30 to 50 random auto-glass litigated claims, none of the policyholders who sought the repairs will be aware that their actions resulted in lawsuits against their insurers, according to Kalifeh.