Florida Governor DeSantis signed HB 873 into law on March 24, 2023, which resulted in significant changes to Florida’s tort and bad faith laws. These changes were part of a movement by the Republican party in Florida allegedly “to decrease frivolous lawsuits and prevent predatory practices of trial attorneys who prey on hardworking Floridians.” The changes brought forth by this bill took effect once it was signed into law on March 24, 2023.
Several statutes that regulate negligence actions were revised in an effort to reduce large verdicts which have been on the rise across Florida. For instance, the statute of limitations for negligence actions accruing after the effective date of the subject statute was reduced from four (4) years to two (2) years, i.e., Florida Statute § 95.11. The most significant change was to the comparative fault statute, which now states that a claimant who is greater than 50% at fault for his or her own injuries cannot recover any damages pursuant to Florida Statute § 768.81. However, this comparative fault change does not apply to medical malpractice actions.
Florida Statute § 768.0427 was added to provide new guidelines for the admission of evidence related to past and future medical expenses in a negligence action. This statute provides that “Evidence offered to prove the amount of damages for past medical treatment or services that have been satisfied is limited to evidence of the amount actually paid, regardless of the source of payment.” It also states that proof of unpaid medical treatment can be shown by what the party’s healthcare provider was contractually obligated to pay or 120% of the Medicare reimbursement rate if the claimant does not have healthcare coverage or has healthcare coverage through Medicare or Medicaid. If there is no applicable Medicare rate for a service, the claimant can present 170 percent of the applicable state Medicaid rate. If the claimant obtains medical treatment or services under a letter of protection and the healthcare provider subsequently transfers the right to receive payment under the letter of protection to a third party, a defendant can present evidence of the amount the third party paid or agreed to pay the healthcare provider in exchange for the right to receive payment pursuant to the said letter of protection. This process also applies to future medical expenses. There are also new requirements for letters of protection and the information that must be contained within them to be considered valid.
This change is aimed at combatting so-called phantom damages that are regularly seen in bodily injury lawsuits where a claimant presents the amount of medical expenses charged, even though private health insurance, Medicaid, or Medicare pays a lesser amount. Although post-trial the damages were adjusted to account for amounts actually paid, the effect of admitting higher medical bills at trial allegedly, at times, influenced and inflated pain and suffering damages. The earlier system also encouraged claimants to seek treatment under letters of protection to obtain higher payments for medical services. In sum, this new law should reduce damages by limiting medical expenses to amounts actually paid or the amounts that should have been paid.
In a premises liability case related to allegations of negligent security, Florida Statute § 768.0701 now states that an intentional tortfeasor (initial at fault party or instigator) can be allocated fault on the verdict form. This allocation will have a significant effect on negligent security cases as a jury can now assign a percentage of fault to the criminal actor who caused the harm. The foregoing was previously not allowed under Florida case law.
The subject bill further adds a presumption against liability in residential housing cases for an owner or manager in Florida Statute § 768.0706. This law states that the said presumption comes about when the owner or manager of residential housing implements defined security protocols, including, but not limited to, the use of security cameras, lighted parking, lighted walkways, deadbolts for each unit, locked windows, locked gates, peepholes, a crime prevention design assessment and crime deterrence and safety training. The burden of proof will rest with the owner or manager, but this new law provides a valuable defense by defining the standard of care for residential property owners in negligent security actions.
The bill also modified the award of attorney fees in bad faith actions. Florida Statute § 86.121 adds that a prevailing party is only able to obtain attorney fees where the insurer disclaims coverage and there is a declaratory judgment action. In other words, an award of fees is no longer automatic solely because an insured prevails on an argument. Furthermore, § 86.121 states that a prevailing party’s attorney’s fee claim cannot be assigned. This section also codifies the principle that issuing a reservation of rights letter is not a disclaimer.
There were also several changes made to Florida Statute § 624.155. First, there is a new safe harbor provision for bad faith claims which states that there is no claim for bad faith if the insurer tenders the policy limits or amount being demanded within 90 days of being provided with sufficient information. The safe harbor protocol cannot be used as evidence in bad faith claims. If any insurer fails to utilize the aforesaid safe harbor period, the statute of limitations can be extended by 90 days. Further, in a major change to existing law, mere negligence can no longer constitute bad faith. The insurer and the claimant have a reciprocal duty to act in good faith in providing information and setting deadlines. A court can also now consider comparative fault in bad faith suits. Additionally, where there are multiple claimants and insufficient limits, the insurer can file an interpleader action where the court will determine the prorated share. Finally, if the insurer and insured agree to binding arbitration, an arbitrator can decide allocation at the expense of the insurer. Any party that receives an allocation of funds must provide the insurer with a release.
Florida Statute § 672.727 was also modified to state that prevailing party attorneys’ fees are now allowed against uninsured/underinsured motorists.
The bill changed Florida Statute §57.104, which sets out the computation of attorney fees. The bill adds a relatively strong presumption that a lodestar fee is sufficient and reasonable in the computation of attorney fees and it can only be overcome in rare and exceptional circumstances with evidence that competent counsel could not otherwise be retained. This new provision will make it more difficult to obtain a multiplier on a claim for attorney fees.
Finally, in construction matters, the prevailing party can now obtain attorney fees in litigation against a surety insurer.
While the changes to Florida law are significant, it should be noted that in anticipation of this new law, claimant attorneys recently filed thousands of personal injury suits to potentially avoid the new law’s effects. Several counties were overwhelmed with filings and the online portal systems crashed or were having significant lag times. While not specifically expressed in the bill, the new laws will likely not apply retroactively. Therefore, it is expected that this massive deluge of lawsuits will be subject to the prior law while lawsuits filed after March 24, 2023, may be subject to these new provisions.
The foregoing is merely a general and brief overview of the NEW Florida law, which causes an even greater need for the assistance of an experienced Personal Injury attorney.
If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.