Tort-reform supporters continue to sound alarm bells about bills before Florida lawmakers that business and free-market advocates say would reverse legal reforms enacted in recent years that have helped to stabilize the state’s property insurance market.
Of particular concern is House Bill 947, which Doug Wheeler, director of the George Gibbs Center for Economic Prosperity at the James Madison Institute, said would make it easier for insurance policyholders to recover attorney fees in claims litigation by changing the definition of “prevailing party.”
“You're going to allow these exorbitant attorney fees to be included in these judgments where if you win a settlement of $1 more than the highest offer from an insurance settlement, you’re the prevailing party,” Wheeler told the Florida Record.
The bill’s detractors see it as a bid to roll back legal reforms passed in recent years that eliminated a provision requiring insurers pay “one-way attorney fees” to policyholders when the latter prevailed in a legal action. HB 947 would also give trial attorneys more flexibility calculating medical damages in a personal injury or wrongful-death case, potentially leading to larger damages payouts, according to the bill’s critics.
Advocates of such changes, including state Rep. Hillary Cassel (R-Dania Beach), argue that since the passage of 2022 legal reforms, 14 Florida insurers reported that they closed more than half of their claims last year without paying policyholders any compensation. Changes in insurance laws are needed to bring back accountability into the system, according to Cassel, who is an attorney.
But Wheeler and other tort-reform supporters say the insurance reforms passed by the Legislature in recent years need time to work. Already, he said, the caseload for Citizens Property Insurance Corp., the state-run insurer of last resort, has dropped from a high of 1.5 million to 900,000. The volume of insurance lawsuits has declined over the past year, and the insurance policy costs have become more stable, according to Wheeler.
“It’s certainly premature (to roll back the reforms),” he said. “A dozen or so new insurers are coming back into Florida to offer policies. … Those folks would not be coming to Florida if they did not think the market was stabilized.”
Just before the insurance reforms of 2023 were signed into law, 280,000 lawsuits were filed under the previous rules, Wheeler said.
“Those cases are still going through the court system,” he said, adding that the damage to the insurance system prior to the reforms took years to accrue. “This is what happens when you manipulate markets.”
Though the Florida House of Representatives is more inclined to pass HB 947 or other bills aimed at altering previous legal reforms, the state Senate will likely put up more barriers to passing them, according to Wheeler.
“(HB 947) will likely encourage frivolous lawsuits, as attorneys will have little incentive to filter out cases with no merit,” he said in a recent opinion article. “Litigation costs will rise, which will inevitably be passed on to consumers through higher premiums, making it harder for homeowners to afford coverage.”
HB 947 and other insurance measures under consideration in the current legislative session would represent a back-sliding of free-market principles and would foster the excessive civil litigation that occurred in years before reforms were passed, according to tort-reform supporters.