In recent months, Florida has seen significant litigation reform. In a December 2022 special session, the Florida Legislature passed Senate Bill 2A, which makes sweeping changes to the regulation of insurance companies, the property insurance claims process, reinsurance and more. Today, Governor DeSantis signed HB 837, further reforming the litigation landscape in the state of Florida.
Below we provide a quick outline of some important components of this new legislation.
ATTORNEY FEES
Lodestar Fee. Fla. Stat. § 57.104(2).
It is to be presumed that the lodestar fee is sufficient and reasonable in a case in which attorney fees are determined by or awarded by the court. A claimant may overcome this presumption only in a rare and exceptional circumstance, by demonstrating that he or she could not have otherwise reasonably retained competent counsel.
Attorney Fee Awards Eliminated with Limited Exception. Fla. Stat. § 86.121.
- Attorney fee awards are eliminated with limited exception.
- Reasonable attorney fees are to be awarded only
- Where declaratory relief has been rendered by a federal or state court after an insurer made a total coverage denial of the claim (only in actions to determine coverage of insurance under the Florida Insurance Code). Note that an insurer’s defense pursuant to a reservation of rights does not constitute coverage denial of a claim, and that actions arising under residential or commercial property insurance policies are excluded.
STATUTE OF LIMITATIONS. Fla. Stat. § 95.11 (4)(a).
The statute of limitations for negligence actions is two years (reduced from four years). Note that this reduced statute of limitations applies to actions accruing after the effective date of this act.
BAD FAITH ACTIONS. Fla. Stat. § 624.155.
- Negligence is insufficient to constitute bad faith (including in common law cases).
- An action for bad faith involving liability insurance, including one brought under common law, may not proceed if the insurer tenders the lesser of the amount demanded by the claimant or the policy limits within ninety days of receiving actual notice of a claim accompanied by evidence to support the amount at issue.
- If the insurer fails to tender that amount within ninety days, then fact that the insurer could have tendered that amount within the ninety days but did not is inadmissible in action to establish bad faith.
- If the insurer fails to tender that amount within ninety days, then the statute of limitations is extended for an additional ninety days.
Duty of Good Faith
- The insured, the third-party claimant, and any representative of the insured or the claimant have a duty to act in good faith in furnishing information about the claim, making demands of the insurer, setting deadlines, and attempting to settle the claim. Note this duty does not create a separate cause of action.
- If the trier of fact finds that the insured, the third-party claimant, or his or her representative did not act in good faith, the trier of fact may reasonably reduce the damages awarded against the insurer.
Competing Claims in a Bad Faith Action
If two or more third-party claimants make competing claims arising out of a single occurrence, which in total exceed the insured’s available policy limits, the insurer does not commit bad faith by failing to pay all or any portion of the available limits to one or more of the third-party claimants if, within ninety days after receiving notice of the competing claims, the insurer either:
- Files an interpleader action under the Florida Rules of Civil Procedure, or
- Pursuant to binding arbitration, makes the entire amount of the policy limits available for payment to the competing third-party claimants before a qualified arbitrator selected by the insurer at the insurer’s expense.
- The arbitrator must consider the comparative fault, if any, of each third-party claimant, and the likely outcome at trial.
- A third-party claimant whose claim is resolved by the arbitrator must execute and deliver a general release to the insured party whose claim is resolved.
ADMISSIBILITY OF EVIDENCE TO PROVE MEDICAL EXPENSES IN PERSONAL INJURY AND WRONGFUL DEATH ACTIONS. Fla. Stat. § 768.0427.
- In a personal injury or wrongful death action, individual contracts between providers and authorized commercial insurers or authorized health maintenance organizations are not subject to discovery or disclosure and are not admissible into evidence.
- In a personal injury or wrongful death action, evidence admissible to prove the damage amounts for past or future medical care is limited as follows:
- Past Paid Medical Bills. Evidence of services that have already been satisfied is limited to the amount actually paid for those services, regardless of the source of such payment. If an insurer paid the full medical bill for past services, the amount paid by the insurer is the only amount admissible. The initial billed amount is not admissible.
- Past Unpaid Medical Bills. Admissible evidence should include the evidence listed below. Evidence depends on the type of health care coverage, if any, the claimant has:
- If the claimant has health care coverage, evidence of the amount the insurer is obligated to pay the provider under the contract and the claimant’s portion of medical expenses under that contract or relevant regulation are admissible.
- If the claimant has health care coverage but foregoes that coverage and opts to obtain treatment under a letter of protection (or otherwise does not submit charges to the insurer), evidence of the amount the insurer would be obligated to pay the provider and the claimant’s portion of medical expenses under that contract or relevant regulation, had the claimant obtained treatment pursuant to the health care coverage, are admissible.
- If the claimant does not have health care coverage or has healthcare coverage through Medicare or Medicaid, 120% of the Medicare reimbursement rate in effect on the date of the incurred medical treatment or services is admissible. If there is no applicable Medicare rate for the services in question, 170% of the applicable state Medicaid rate is admissible.
- If the claimant receives services pursuant to a letter of protection and the provider then transfers the right to receive payment of the bill to a third party, evidence of the amount the third party paid or agreed to pay the provider for the right to receive payment is admissible.
- Evidence of reasonable amounts billed to the claimant for medically necessary treatment or services.
- Future Medical Bills. Admissible evidence should include the evidence listed below. Evidence depends on the type of health care coverage, if any, the claimant has:
- If the claimant has health care coverage or is eligible for health care coverage, evidence of the amount for which the future charges could be satisfied by the coverage and the petitioner’s portion of medical expenses under the contract or relevant regulation is admissible.
- If the claimant does not have health care coverage or has healthcare coverage through Medicare or Medicaid, evidence of 120% of the Medicare reimbursement rate in effect at the time of the trial for such future services is admissible. If there is no applicable Medicare rate for the future services in question, 170% of the applicable state Medicaid rate amount is admissible.
- Any evidence of reasonable future amounts to be billed to the claimant for medically necessary treatment or services
- No affirmative duty exists to seek a reduction in billed charges to which a party is not contractually entitled is imposed.
LETTER OF PROTECTION REQUIRED DISCLOSURE. Fla. Stat. § 768.0427 (3).
- A letter of protection is defined as “any arrangement where a health care provider renders treatment in exchange for a promise of payment for the claimant’s medical expenses from any judgment or settlement of a personal injury or wrongful death action,” including “any such arrangement, regardless of whether referred to as a letter of protection.” Fla. Stat. § 768.0427 (1).
- In a personal injury or wrongful death action, if the claimant obtains medical care under a letter of protection, the claimant must disclose the following for the determination of damages:
- Copy of the letter of protection
- All billings for the claimant’s medical expenses, itemized and coded
- If the provider sells the accounts receivable for the claimant’s medical expenses to a factoring company or other third party, the name of that factoring company or third party as well as the dollar amount of the purchase, including any discounts below invoice amount
- Whether the claimant had health care coverage at the time of the treatment, and if so, the identity of that coverage
- Whether the claimant was referred for treatment under a letter of protection, and if so, the identity of the person who made the referral. Note that if the referral was made by the claimant’s attorney, that communication is not protected by attorney-client privilege.
- Where a referral was made by an attorney, the financial relationship between a law firm and medical provider (including number of referrals, frequency and financial benefit obtained) is relevant to potential bias of a testifying medical provider.
RECOVERY OF PAST AND FUTURE MEDICAL TREATMENT OR SERVICE EXPENSES. Fla. Stat. § 768.0427 (4).
Damages recoverable by a claimant in a personal injury or wrongful death action may not exceed:
- Amounts actually paid by or on behalf of claimant to a health care provider who rendered medical treatment or services
- Amounts necessary to satisfy charges for medical services that are owed and not yet satisfied at the time of trial
- Amounts necessary to provide for claimant’s future reasonable or necessary medical treatments or services
PREMISES LIABILITY FOR ACTS OF A THIRD PARTY IN MULTI-FAMILY RESIDENTIAL PROPERTY SAFETY AND SECURITY. Fla. Stat. § 786.0706.
If a criminal act is committed by a third-party on the premises of a multi-family residential property, the owner or principal operator of that property has a presumption against liability. Note that this section does not create a private cause of action and that the burden of proof is on the owner or operator to demonstrate substantial implementation of the security measures specified below.
- Substantial implementation of the following security measures on the property leads to a presumption against liability:
- Security camera system at entry and exit points, which records and maintains as retrievable video footage for at least 30 days
- Dusk until dawn lighting in parking lots, walkways, laundry rooms, common areas, and porches
- At least a one-inch deadbolt on unit doors
- A locking device on windows, exterior sliding doors and other doors not used for community purposes
- Locked gates with key or fob access for pool fence areas
- Peephole or door viewer on unit doors that do not include windows
- By January 1, 2025, substantial compliance with a crime prevention through environmental design assessment that is no more than three years old and has been performed by a law enforcement agency or a Florida Crime Prevention Through Environmental Design Practitioner designated by the Florida Crime Prevention Training Institute of the Department of Legal Affairs
- By January 1, 2025, proper crime deterrence and safety training for current employees. After January 1, 2025, training must be provided to employees within 60 days of their hire dates. The training must be reviewed, and updated as necessary, at least every three years.
DAMAGES APPORTIONMENT. Fla. Stat. § 786.81.
Florida’s damages apportionment standard changes from a pure comparative negligence system to a modified comparative negligence system. Parties to negligence actions (but not in actions for damages for personal injury or wrongful death arising out of medical negligence) found to be more than 50% at fault for their harm do not recover damages. For example, in an accident causing a plaintiff $100,000 in damages:
- If the defendant is fully at fault, the plaintiff recovers all $100,000.
- If the defendant is 51% at fault and the plaintiff is 49% at fault, the plaintiff recovers 51% of his damages— $51,000.
- If the defendant and plaintiff are each 50% at fault, the plaintiff recovers 50% of his damages— $50,000.
- If the plaintiff is more than 50% at fault, the plaintiff does not recover damages.
We understand the uncertainty brought about by these legislative changes. Chartwell Law is available to answer any questions regarding these changes and resulting litigation concerns in Florida. Please do not hesitate to contact us.
