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Partner at Butler Legal on House Bill 1551: Policyholders are 'the ‘prevailing party’ under the statute'

FLORIDA RECORD

Sunday, March 30, 2025

Partner at Butler Legal on House Bill 1551: Policyholders are 'the ‘prevailing party’ under the statute'

Legislation
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Matthew Lavisky, Partner at Butler Legal | Butler Legal

Matthew Lavisky, a partner at Butler Legal, expressed concerns over House Bill 1551, suggesting it could lead to policyholders being deemed eligible for attorney fees even when their recovery is minimal compared to their initial claims. This statement was made in a press release on March 18.

"If an insured demands $500,000, the insurer offers $100,000, and the insured recovers $101,000, the insured is the ‘prevailing party' under the statute, despite losing the lawsuit by recovering a fraction of the amount demanded and in dispute," said Lavisky. "House Bill 1551 brings back the old law with all of its consequences. This system of lawyers determining the value of the services of lawyers led to hugely excessive ‘reasonable' rates for run-of-the-mill litigation. Cases became about the lawyers, not the insureds."

House Bill 1551 proposes a framework where attorney's fees are awarded to the prevailing party in insurance disputes. According to an analysis by the Florida House of Representatives, the bill defines the insured as the prevailing party if they obtain a judgment greater than the insurer's highest written, good faith settlement offer. Lavisky argues this could result in situations where policyholders receive minimal recoveries yet are entitled to substantial attorney's fees.

The bill specifies that "judgment" includes damages, reasonable attorney's fees, taxable costs, and prejudgment interest incurred when the highest settlement offer was made. As reported by Insurance Business Magazine, this means that even if actual damages awarded are only marginally higher than the insurer's offer, the inclusion of attorney's fees and other costs could significantly increase the total judgment, impacting the determination of the prevailing party.

Critics of HB 1551, including Lavisky, contend that the bill could incentivize prolonged litigation. According to a report by Florida Politics, the bill's structure might encourage attorneys to pursue cases where recovering attorney's fees is possible, even if the client's net recovery is minimal. This could potentially lead to increased litigation costs and higher insurance premiums.

Lavisky is a partner at Butler Weihmuller Katz Craig LLP, specializing in insurance defense and complex litigation. According to his firm profile, he has extensive experience representing insurers in disputes involving coverage issues, bad faith claims, and appellate matters. He has been actively involved in discussions on insurance reform and has published articles analyzing legislative changes' impact on the industry.

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