Florida Must Stand Firm Against Those Who Want To Undo Tort Reform

In this past legislative session, Florida’s elected leaders passed HB 837 and finally addressed the state’s lawsuit abuse crisis in a comprehensive way. For years now, as an attorney that represents businesses and consumers, I have witnessed the long-term economic destruction wrought by a legal system riddled with loopholes that some attorneys have been only too happy to exploit.

Just two years ago in the American Tort Reform Association’s annual report, Florida was listed as a judicial hellhole. That is not a distinctive to be proud of. What qualified us for this ranking was a number of statutory irrationalities that made it profitable for any plaintiff’s lawsuit, whether frivolous or not, to be an instant money-maker for the attorney willing to file it. One such irrationality is requiring an insurance company to pay the legal fees for those that sue them and the small businesses they cover.

On the surface, most readers might think this sounds fair – but consider a real-life example:

A plaintiff drunkenly stumbles into a small business’s shop and hits his head on a lift. The plaintiff sues the small business for over $250,000. That small business notifies its insurance company who then assumes the defense of the lawsuit. The insurance company then looks to decide whether it would be cheaper to settle or fight the lawsuit.

There is little to no consideration given to the fact that the plaintiff’s injuries were his own fault. Defending against a legitimate lawsuit costs the same as defending against a frivolous lawsuit. Worrying about issues of actual fault and wrongdoing is relegated to an uneconomical luxury.

Inevitably, a settlement offer is made by the insurance company – usually about half of the amount of damages sought. The plaintiff accepts, but then the plaintiff’s attorney is able to charge 100 percent of their fees to the defendant. Sometimes these fees can be three or four times larger than the settlement amount and become their own independent subject of litigation serving only to further bog down the state’s already limited judicial resources.

Not only does this system make an actual determination of wrongdoing too costly and thus irrelevant; it makes it impossible to build a business model with any reasonable degree of accuracy. What’s more, the insurance companies most small businesses rely on to defend against the onslaught of lawsuits, are not going to shoulder the cost of litigation – but rather they will increase their rates to small business policyholders and even stop underwriting new policies altogether. This leaves many small businesses with bankruptcy as their only defense against the next inevitable lawsuit. Over time, this inequitable litigatory system has hurt every consumer in the state as prices have been raised on literally everything to compensate for the exorbitant cost of litigation. This has been aptly called Florida’s tort tax.

Let’s be clear – everyone with legitimate claims deserves fair and equal access to the courts, but it is with appreciation, we applaud Governor DeSantis and the Florida Legislature for taking steps to stop the frivolous lawsuits. They included reforms to the statute of limitations to require claimants to make their claims within two years instead of leaving them hanging out there for up to four years.

They reformed the rules determining negligence so that if a plaintiff is more than 50 percent liable for their own injury, they cannot recover damages against someone else. Reforms were made to the way that medical damages are evaluated and disclosed to a jury in order to keep the costs in line with reality. They also closed statutory loopholes which allowed plaintiff attorneys automatic fee windfalls.

These reforms are reasonable and stand to save Florida small businesses and consumers hundreds of millions of dollars. Evidence of this is drawn from the facts that within the few days between the legislature passing the reform bill and the governor signing it, over 60,000 lawsuits were filed to avoid falling under the new reforms. This mass filing was unprecedented and clearly exemplified this “run on the bank” mentality that has been a part of Florida’s legal system for decades.

The lawsuit reforms of HB 837 will save small businesses and consumers millions, pump that money back into the economy in productive ways, and restore a sense of fairness and predictability for our legal process.

In short, this was a massive move to boost confidence in our judicial system and protect our hard-earned dollars from the inequitable “tort tax”. Despite these benefits, wealthy plaintiff attorneys feel robbed and have already begun their counterattack. I hope however Florida’s legislature will hold its ground against any efforts to undo these reforms in the future.