The 2016 legislative session ended today in Tallahassee with no tort reform measures passed, but that won't stop the Florida Justice Reform Institute from pushing for future changes in the state's legal system.
Although William Large, president of the institute, is disappointed that no meaningful civil justice reform measures passed in 2016, the Florida Justice Reform Institute will work on Assignment of Benefit reform, Accuracy in Damages reform and third-party bad-faith reform again next year, he said, especially in light of recent survey findings released by the U.S. Chamber Institute for Legal Reform.
Florida has one of the worst lawsuit climates in the country, ranking 44th out of 50 and sinking three slots below its 2012 ranking, according to the 2015 Lawsuit Climate Survey conducted by the Harris Poll.
Survey participants were comprised of a national sample of 1,203 in-house general counsel, senior litigators or attorneys, and senior business executives. The rankings are based on “fairness and reasonableness” of courts within a state.
“...That ranking is not my opinion; it is the opinion of the Institute for Legal Reform after conducting a very detailed survey," Large told Florida Business Daily. "And the individuals who answered the survey answered it by looking at a lot of different issues, including the state of affairs of scientific and technical evidence that was admitted, discovery issues, timeliness of cases staying on a docket, damages, treatment of class-action suits, treatment of tort and contract litigation, and treatment of enforcing meaningful venue requirements.”
Large said the state’s low ranking was heavily influenced by appellate court rulings, particularly the Florida Supreme Court, and the current state of Florida’s legislature.
“I am trying to get the ranking up," Large said. "I am trying to advocate for civil justice reform and next time this study comes out hopefully we are higher. One of the missions of the Florida Justice Reform Institute is to advocate for tort reform at our state capital. So we’ve been advocating, for example, this year for three concepts. One is third-party bad-faith reform; one (is) called Accuracy in Damages; and the third is called Assignment of Benefits reform.”
A third-party claim is filed when an insurer fails to settle a third party’s claim against the insured party within the applicable limits of the insurance policy, which leaves the insured susceptible to a judgment exceeding the policy limits.
Large used an example of an insured individual who causes an accident that severely injures or kills another motorist. If the insured has a policy limit, oftentimes the plaintiff’s attorney will file a liability lawsuit, get a large amount in a verdict and then file a third-party bad-faith lawsuit against the insurance company.
“We have lots of cases where limits are offered very quickly, within two days, seven days, two weeks; and whatever the limits might be — $10,000, $25,000, $100,000 -- they are rejected because the timing to offer the limits is seen as an issue of fact as to how quickly the insurance company tendered those limits,” Large said. “So one of the things we are trying to do is to advocate for a clear timeframe. If you offer the limits within 45 days, the insurance company cannot be held in bad faith.”
Large said there is dire need for Accuracy in Damages reform because when medical liability is being calculated in a case where liability is clear, there is a tendency for plaintiff’s attorneys to send their clients to doctors who issue letters of protection, which guarantee the health care provider will be paid when the verdict or settlement comes in. But such letters often exaggerate prices for procedures, which in turn increase the amount awarded significantly.
“What we want the jury to see is the actual market price for medical procedures, not an inflated letter of protection,” Large said.
On the issue of Assignment of Benefits, reform is necessary because corporations are taking advantage of insurers and the one-way attorney’s fee by requesting that the policyholder’s benefits be extended to the corporation when they repair damages in property insurance claims.
“The reason they are doing it is not just to get ... more (than) whatever the repair is, but because with that assignment comes the one-way attorney’s fees,” Large said. “And the attorneys then litigate whether or not that repair was the market price. They do it and they are the beneficiary of the one-way attorney’s fee that has now been assigned to the third-party vendor. That in a nutshell is the third issue we are working on.”
Under the "one-way provision," only one of the parties receives attorneys' fees.
Florida State Rep. Kathleen Passidomo (R-District 106) has sponsored some key legal reform legislation, and Large is counting on her help again during the next legislative session.
“(Passidomo) has been a strong advocate for civil justice reform," Large said. "She is an extraordinary leader. I cannot say enough good things about Rep. Kathleen Passidomo. She is brilliant. She is a hard worker; she understands these issues; she understands what this means for consumers in terms of increased costs, increased litigation."