Matthew Lavisky, a partner at Butler Weihmuller Katz Craig LLP, said House Bill 1551 reinstates excessive attorney fees and undermines previous insurance litigation reforms.
"We have experts making $86,000 for testifying as to what another lawyer ought to make for suing an insurance company," said Lavisky. "There was already a proposal for settlement mechanism… This bill takes away a tried and true mechanism. It purports to adopt a prevailing party standard… but defines it differently than Florida common la. The amount of fees that are being recovered, up to $1,000 an hour is what Floridians make in a week."
According to Butler Weihmuller Katz Craig, Florida House Bill 1551 (HB1551) is a legislative measure aimed at reforming attorney fee awards in insurance litigation to promote fairness and reduce unnecessary lawsuits. The bill seeks to address concerns about the current legal landscape, where experts have reportedly been compensated up to $86,000 for testifying on appropriate attorney fees in insurance cases. Such high expert fees have raised questions about the efficiency and cost-effectiveness of the existing system, particularly for insurance models that prioritize lean operations, such as reciprocal insurance exchanges.
One significant change proposed by HB1551 is the modification of the "proposal for settlement" mechanism. As reported by Butler Weihmuller Katz Craig, this mechanism has traditionally allowed parties to make settlement offers, with potential penalties for rejection if the final judgment is less favorable. Some say that the bill removes this tried-and-true method, potentially discouraging settlements and increasing litigation costs. For reciprocal insurers, which are owned by their policyholders and emphasize cooperative risk-sharing and fiscal prudence, the removal of this mechanism could undermine a key tool used to efficiently resolve disputes and avoid protracted litigation.
According to Insurance Business, reciprocal insurance exchanges are mutual insurance arrangements where members insure each other and are structured to return profits or surpluses to their members rather than external shareholders. These exchanges have been praised for their member-focused approach, cost-effective operations, and long-term alignment with policyholder interests. However, HB1551's changes to litigation and settlement procedures could affect how these insurers manage claims and defend against lawsuits. Increased legal uncertainty or higher litigation costs may necessitate adjustments to capital reserves or legal strategies, potentially diminishing one of the core competitive advantages of the reciprocal model in Florida’s volatile insurance market.
Lavisky is a Partner at Butler Weihmuller Katz Craig LLP’s Tampa office, specializing in the defense of bad faith claims, class actions, first-party property disputes, and insurance coverage litigation. He has successfully defended multi-million dollar claims, including a $500 million third-party bad faith case. Lavisky holds leadership roles in the Florida Defense Lawyers Association (FDLA) and DRI (Defense Research Institute), where he serves as Southeast Region Director. An AV-rated attorney and Best Lawyers honoree, Lavisky is a published author and frequent speaker who graduated from the IADC Trial Academy at Stanford University.