Florida’s tort costs per household have ballooned to $5,768 per year, the third highest in the nation behind Delaware and Washington, D.C., based on 2022 data on lawsuit costs – the most recent numbers available.
But those statistics, contained in a study released last month by the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR), don’t tell the whole story, the report’s authors say. That’s because they only show tort-reform trends in the state up to the year before the Legislature’s enactment of major legal reforms.
Lawsuit-abuse reforms passed in the Sunshine State in 2023 increased transparency in lawsuit damages awards, dealt with “billboard lawyer windfalls” and reduced incentives to file excessive litigation, the Nov. 20 report says.
“According to our partners at the Florida Chamber, there are early signs that the reforms are working,” the ILR study states. “Insurance carriers are expanding their business in Florida and homeowner insurance rates are stabilizing or decreasing.”
The report points to the tort-reform successes in West Virginia, where lawmakers tackled issues such as problematic lawsuit advertising, excessive damages awards and lawsuit tourism. As a result of the measures passed, tort costs in West Virginia have dropped by more than 20%, giving the state the lowest annual household tort costs in the nation ($2,132), according to the study.
“ILR applauds Florida’s meaningful movement in the right direction and encourages lawmakers to continue fixing what remains broken, unfair and unpredictable,” the study says. “Meanwhile, other states should strive to tell a similar success story.”
Tom Gaitens, executive director of the Florida Coalition Against Lawsuit Abuse (CALA), said it wasn’t until 2019 that Florida officials began – slowly at first – a four-year run at tort reforms.
“Florida has been plagued by excessive litigation and fraud stemming from exploitation of legal loopholes and decisions by the courts governing attorney fees, bad-faith rules and abuses of assignment of benefits,” Gaitens told the Florida Record in an email.
In 2022, Florida’s tort costs were the second highest in the nation based on the share of gross domestic product (GDP) at 3.35%, he said. But supporters of the tort reforms believe the numbers have crested and will be moving downward.
“Civil Justice reform has what is called a ‘litigation tail’ – that is, the time it takes for cases to work their way through the system,” Gaitens said. “Fortunately for Floridians, one of the major drivers of ‘tort costs’ has been property-related cases. Since 2021, they have decreased from 64,000 to under 28,000.”
The number of legal cases filed in Florida is the highest in the nation at 127 per 100,000 residents, he said, but with tort reforms, that number should drop significantly in the next six to 12 months, according to Gaitens.
Nationally, tort costs rose 7.1% annually between the years 2016 and 2022, according to the ILR report, which was conducted by The Brattle Group and published by the U.S. Chamber. That figure far outstripped the average yearly inflation rate (3.4%) and average annual GDP growth, which came in at 5.4% over that time period, the report states.
“The U.S. tort system is in desperate need of strategic reforms that promote economic growth and lower costs for American households,” the ILR president, Stephen Waguespack, said in a prepared statement. “Plaintiffs’ lawyers and litigation funders are getting bigger paydays at the expense of consumers and businesses. The higher the price tag, the more consumers pay for products and services, and businesses see an increase in their liability burden.”
The Record is owned by the Institute for Legal Reform.