In recent months, Florida has seen significant insurance litigation reform. In a December 2022 special session, the Florida Legislature passed Senate Bill 2A, which made sweeping changes to the regulation of insurance companies, the property insurance claims process, reinsurance and more. Now, the Florida Legislature is considering proposed Florida House Bill 837, which, if passed, will significantly impact the state’s growing volume of personal injury litigation. The proposed bill includes the following key provisions:
- Communications relevant to lawyers’ referring clients for treatment by health- care providers are no longer covered by attorney-client privilege. In Worley v. Central Florida YMCA (2017), the Florida Supreme Court held that the financial relationship between a plaintiff’s attorney and that plaintiff’s doctor could not be disclosed to a jury, even though it allowed discovery on potential financial relationships between a defense entity and its hired expert witnesses. The proposed bill eliminates the Worley standard.
- If two or more third-party plaintiffs make competing claims based on a single incident, which in total exceed the insured’s available policy limits, an insurer cannot be held liable beyond the policy limits. All claimants are entitled to a pro-rated share of the proceeds as determined by a court or arbitrator.
- Admissible evidence to prove damage amounts for past or future medical care is limited by the proposed bill. If an injured party has health-care insurance, the amount paid by the insurer is the only amount admissible so that damages cannot be based on unsupported medical estimates. If a claimant has health-care insurance but has chosen to forgo same in lieu of using letters of protection, damages must still be guided by what the insurer would have paid had the charges been submitted to the insurer. If the claimant has no health-care insurance, the Medicare reimbursement rate is admissible.
- If a claimant obtains medical care under a letter of protection, the claimant must disclose a copy of the letter of protection along with amounts that any third-party factoring company agreed to pay the physician or entity that sold the bill. All relevant doctors’ bills must be itemized and include procedure codes where possible. Note that this feature will require the hiring of expert witnesses to correlate the codes to reasonable and customary charges within the community, which would then be reimbursed at the Medicare rate.
- The comparative fault standard is modified so that if a plaintiff is found to be more than 50% at fault, he or she cannot recover any damages. The principles of pure comparative fault would remain, however, so that if a plaintiff is found to be 49% at fault and a defendant 51% at fault, the plaintiff may recover 51% of the total damages awarded.
- In December of 2022, the Florida Legislature repealed one-way attorney’s fees for first-party property insurance claims. It now appears that the Legislature will end any one-way fee provisions against insurers, including surplus lines.
We will keep you updated on the final version of the proposed bill and its impact on Florida litigation as it makes its way through the rest of the legislative process.