Florida: Judicial Hellhole No More?

Florida: Judicial Hellhole No More?


Florida’s House Bill 837[i] was just signed into law by Governor Ron DeSantis, and the times, they are a-changin’. The bill will fundamentally change how civil suits in Florida are litigated, as it affects everything from statutes of limitation to recovery of attorney’s fees. The two biggest areas of change are largely beneficial for insurers: the bill substantially modifies the bad faith framework and changes the state’s comparative fault system. As a result of the sweeping reform, Florida has already seen a substantial number of suits filed in anticipation of the bill’s effects.

It is critical that insurers and their counsel fully understand the ramifications of this bill and are prepared to meet them, head-on. Tyson & Mendes is poised to address the massive influx of civil litigation in Florida with the addition of a Jacksonville office in the coming weeks that will double the firm’s presence in the state, and is here to assist in answering the many questions this bill raises.


Top 5 Changes

  1. Bad faith litigation! Insureds now have an affirmative duty to act in good faith; insurers may limit their bad faith liability where there are multiple claimants in a single action; and, insurers may resolve claims within 90 days of actual notice and sufficient evidence, but failure to do so is inadmissible in any subsequent litigation.
  2. Comparative fault! A plaintiff who is more at fault than a defendant may now generally not recover from the defendant.
  3. Billed versus paid! Evidence is now limited to evidence of the amount actually paid, instead of the amount billed, regardless of the source of payment. There are also now uniform standards to assist in the calculation of damages.
  4. Statute of limitations! For negligence claims, the statute of limitations is now reduced from four years to two.
  5. Attorney’s fees! Lodestar fees are now presumed to be sufficient and reasonable with limited exceptions, thereby disincentivizing frivolous lawsuits and prolonged litigation aimed at increasing attorney profits.


A Response to Climbing Litigation and Insurance Costs

Long regarded as a “judicial hellhole” for civil defendants, Florida has been home to some of the most high-profile Nuclear Verdicts® in the country, with jurors in the state delivering close to $2B in Nuclear Verdict® awards over the past two years. Nuclear Verdicts® are largely regarded as the cause of social inflation, which refers to the increase of insurance claims payouts and rising costs resulting from litigation. Drivers of the bill have argued it was a necessary response to an ever-growing number of lawsuits, with the aim of reducing insurance rates for consumers. Critics disagree, and have taken swift action to file suits quickly to avoid repercussions under the new law.


What’s Changed?

HB 837 amends several existing statutes, repeals one, and enacts new statutes as part of the bill’s package. It truly is a sweeping reform bill. Here are the takeaways from each topic:


Attorney’s Fees

The bill amends existing Florida Statute §57.104 through the addition of subpart (2), which now specifies that where attorney fees are determined or awarded by the court, there is a strong presumption that a lodestar fee is “sufficient and reasonable.[ii] A lodestar fee is calculated using the number of attorney hours reasonably expended multiplied by the reasonable hourly rate. While the presumption is rebuttable, the amendment clarifies that a multiplier may only be awarded in “a rare and exceptional circumstance.” [iii]

The lodestar fee calculation has been the standard calculation in Florida courts for quite some time.[iv] However, the Florida Supreme Court has also previously made clear that trial courts are authorized to adjust the lodestar figure if it does not represent a reasonable fee.[v] By setting forth a three-part test for determining whether a multiplier is appropriate,[vi] the Court also deviated from the preferences articulated by the U.S. Supreme Court.[vii] HB 837 codifies the presumption that the lodestar fee is reasonable, largely removing from trial courts the ability to deviate, absent articulable and rare circumstances. This measure was included as the package in response to what Governor DeSantis’ office has referred to as “activist attorneys” – those who engage in frivolous lawsuits and prolong litigation merely to increase their own profits.[viii]

The bill also creates Statute § 86.121, which sets forth new procedures for the award of attorney’s fees in actions for declaratory relief. In addition to those actions now having priority on the docket, those who may bring the action are limited to named insureds, omnibus insureds, and named beneficiaries; the right may not be assigned as part of a settlement agreement. Importantly, this statute also articulates that a defense offered by an insurer pursuant to a reservation of rights does not constitute a coverage denial of a claim. The new statute does not apply to residential or commercial property insurance policies.[ix]

In a clear victory for insurers, Statute § 627.428 was repealed. This statute previously provided for the recovery of attorney’s fees by an insured who prevailed in a case against their insurer.


Statute of Limitations

The bill amends Statute § 95.11 by reducing the statute of limitations for negligence claims from four years to two years. Because the bill’s application is largely prospective, the new statute of limitations on negligence claims will apply to claims arising after the date of the bill. Preexisting claims will still fall within the previous four-year statute of limitations.


Bad Faith

HB 837 has majorly changed the framework for bad faith actions in Florida, setting forth multiple key points in a new subpart (4) that largely inure to the benefit of the insurer. First, there is no basis for a bad faith claim if the insurer, within 90 days after receiving actual notice of a claim “accompanied by sufficient evidence” tenders the lesser of the policy limits or the amount demanded by the claimant.[x] The statute leaves open to interpretation what evidence will be considered “sufficient,” so it is likely this will be a point of contention for the courts to resolve.

Where an insurer does not so tender within 90 days, this fact is inadmissible to establish bad faith. Where an insurer fails to tender within 90 days, the statute of limitations is extended for an additional 90 days.[xi] This latter addition is likely included to deter insurers from attempting to run out the clock on pending claims by failing to tender within the 90-day period.

Further, the bill articulates that mere negligence alone is insufficient to constitute bad faith, and places on the insured/claimant and their representative an affirmative duty to act in good faith. And, in actions for bad faith, the trier of fact may consider whether they failed to do so; if so, the trier of fact may reduce the damages award against the insurer.[xii] How these changes play out in court remains to be seen: as it stands, Florida’s Supreme Court has made clear that while, “…negligence is not the standard… negligence is relevant to the question of good faith.”[xiii] The bill does not appear to change that analysis, but it does articulate more clearly the duty of an insured in communicating with its insurer and even trying to settle such a claim.

Importantly, insurers may limit their liability exposure in actions where two or more third-party claimants have competing claims arising out of a single occurrence. In those situations where the claims may exceed policy limits, an insurer is not liable beyond the policy limits for failure to pay if, within 90 days of receiving notice of the competing claims, the insurer files an interpleader action or arbitrates the competing claims.[xiv] An insurer may therefore limit their bad faith liability where multiple claimants are present by paying the total policy amount before negotiations begin.[xv]

This portion of the statute largely appears to codify existing case law, which permits the liability insurer to enter settlements with some claimants, even where those settlements deplete or even exhaust the policy limits as to the remaining claimants.[xvi] However, courts have previously required that these settlements be reasonable; the new provisions of this law do not set forth such a requirement, but they do articulate that if an insurer files an interpleader action and the claims of the competing claimants are in excess of the policy, the claimants are entitled to a prorated share of the policy limits as determined by the trier of fact.[xvii]


Offer of Judgment in Declaratory Judgment Actions

The bill also clarifies that Statute § 7768.79, referring to offer of judgment provisions, now applies to declaratory judgment actions involving insurance policies.[xviii]


Medical Expenses Evidence Admissibility

Through the creation of Statute § 768.0427, the legislature has significantly modified Florida’s collateral source rule and imposed requirements clearly aimed at improving transparency and limiting unfair recovery by plaintiffs. Specifically, the new statute tackles the ever-present question of billed versus paid.

Now, evidence offered to prove the amount of damages for past medical treatment that has been satisfied is limited to evidence of the amount actually paid, instead of the amount billed (which is usually significantly higher, leading to a higher damages award). Regarding unsatisfied charges for incurred medical treatment, the admissibility of evidence depends on the claimant’s health care coverage[xix]:

Where the claimant has health care coverage other than Medicare or Medicaid, evidence of the actual amount the coverage is obligated to pay plus the amount the claimant must pay, is admissible. Where the claimant has health care coverage but instead obtains medical treatment through an arrangement such as a letter of protection, evidence of the amount the health care coverage would have paid plus the claimant’s co-pay or deductible obligation is admissible. If a claimant does not have health care coverage, evidence of 120% of the Medicare reimbursement rate in effect on the date of medical treatment is admissible. If there is no applicable Medicare rate for a service, the admissible evidence is 170% of the applicable state Medicaid rate.

Notably, if the claimant obtains treatment under a letter of protection and the provider subsequently transfers the right to receive payment to a third party, evidence of the amount the third party paid or agreed to pay the provider in exchange for the right to receive payment is now admissible.

The statute also provides a framework for juries who are tasked with deciding damages for future medical care, following a similar analysis that permits evidence of the amount for which the future charges of providers could be satisfied if submitted to health care coverage, or 120% of the Medicare reimbursement rate in cases where the claimant does not have health care coverage.

The bill also strictly limits recovery for inflated numbers that are not actually paid, necessary, or required for reasonable and necessary future treatment.


New Disclosure Requirements

Included in Statute § 768.0427 are new disclosure requirements for claimants asserting damages for medical treatment rendered pursuant to a letter of protection. Now, as a condition precedent to asserting such a claim, the claimant must disclose the letter of protection itself as well as all billings for medical expenses (which must be itemized and coded according to applicable standards).[xx]

If the health care provider in such an arrangement sells the accounts receivable to a factoring company or other third party, the claimant must then also disclose the identity of that third party, the dollar amount the third party paid, and any discount provided.[xxi]

In an addition that will come into play where plaintiffs’ counsel has existing relationships with providers, the statute also requires disclosure of whether the claimant was referred for treatment under a letter of protection as well as the identity of the person who made the referral.[xxii] More to the point, the claimant must also disclose the financial relationship between a law firm and a medical provider, including the number and frequency of referrals, and financial benefit. The statute specifically contemplates and authorizes consideration by a jury of such a relationship, noting that such evidence is admissible and is “relevant to the issue of the bias of a testifying medical provider.”[xxiii]

In a state known for outsized awards that are often premised on the testimony of a medical provider with an existing relationship with the very plaintiff’s attorney asking the questions, this legislative acknowledgment is critical, as it will allow defendants to address the trustworthiness of a plaintiff’s key experts more pointedly.


Multifamily Residential Safety

The bill creates new Statute § 768.0706, which applies to residential buildings or groups of residential buildings such as apartments, townhouses, or condominiums consisting of at least five dwellings.[xxiv] The statute insulates property owners from liability for criminal acts committed on the premises by third-parties if they substantially implement a series of security measures on the property.

The legislature has in essence established a checklist for property owners to avoid liability for third-party criminal acts:

  1. Installation of a security camera system at points of entry and exit which records footage and maintains it as retrievable for at least 30 days;
  2. Lighted parking lot at an intensity of at least an average of 1.8 foot-candles pr square foot at 18 inches above the surface that provides light from dusk to dawn;
  3. Lighting in walkways, laundry rooms, common areas, and porches that is illuminated from dusk to dawn;
  4. At least a 1-inch deadbolt in each dwelling unit door;
  5. A locking device on each window, exterior sliding door, and any other doors not used for community purposes; and,
  6. A peephole on each dwelling unit door.[xxv]

The bill also imposes on property owners a requirement to complete a crime prevention

assessment and provide crime deterrence and safety training to its employees by January 1, 2025, with such training occurring within 60 days after an employee’s hire date.[xxvi]


Comparative Fault

Through the amendment of Statute § 768.81, the bill modified Florida’s comparative fault rule to one of modified comparative negligence. Now, a plaintiff who is found to be 51% or more cannot recover at all.[xxvii] It must be noted that this modification applies only to negligence actions; Courts have long recognized that the comparative fault statute does not apply to any action based on an intentional tort.[xxviii]


Effective Dates and Applicability to Pending Cases

The amendments are largely effective to causes of action filed after the effective date of the Act, which is March 24, 2023. However, amendments to the statute of limitations apply to actions accruing after the effective date. Further, insurance contracts in effect on or before the effective date remain unaffected. Insurance contracts issued or renewed after the effective date are affected. As a result, cases filed prior to the effective date will not be subject to the modifications to comparative fault, changes to evidence on billed versus paid, or new disclosure requirements. It is likely these exclusions that led to the massive influx of cases filed in Florida leading up to the bill’s passage.

It is estimated that in the days before Gov. DeSantis signed the bill into law, Florida courts saw an increase of almost 700% in lawsuit filings.[xxix] This speaks to not only the likely tidal wave of trials that will follow, but also to the impact of the bill on the way civil lawsuits are litigated and tried in Florida.

It is entirely possible that the backlash from the bill may lead to even more Nuclear Verdicts® in the cases filed in the rush preceding the bill’s effective date. In the interim, insurers and their counsel must be prepared to defend against the onslaught and prepare for the new way of litigating claims. Tyson & Mendes remains dedicated to defending justice for all, no matter the curveballs thrown by anxious plaintiff’s counsel or the legislature.




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[i] https://www.flsenate.gov/Session/Bill/2023/837/BillText/er/PDF

[ii] Id.

[iii] Id.

[iv] Florida Patient’s Compensation Fund v. Rowe, 472 So.2d 1145 (Fla.1985)

[v] Id.

[vi] Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla.1990)

[vii] City of Burlington v. Dague, 505 U.S. 557 (1992)

[viii] https://www.flgov.com/2023/03/24/governor-ron-desantis-signs-comprehensive-legal-reforms-into-law/

[ix] https://www.flsenate.gov/Session/Bill/2023/837/BillText/er/PDF

[x] Id., emphasis added.

[xi] Id.

[xii] Id.

[xiii] Harvey v. GEICO Gen. Ins. Co., 259 So.3d 1 (Fla.2018), internal citations omitted.

[xiv] https://www.flsenate.gov/Session/Bill/2023/837/BillText/er/PDF

[xv] https://www.flgov.com/2023/03/24/governor-ron-desantis-signs-comprehensive-legal-reforms-into-law/

[xvi] Farinas v. Florida Farm Bureau Gen. Ins. Co., 850 So.2d 555 (Fla.Dist.Ct.App.2003); Harmon v. State Farm Mut. Auto. Ins. Co., 232 So.2d 206 (Fla.Dist.Ct.App.1970)

[xvii] https://www.flsenate.gov/Session/Bill/2023/837/BillText/er/PDF

[xviii] Id.

[xix] Id.

[xx] Id.

[xxi] Id.

[xxii] Id.

[xxiii] Id.

[xxiv] Id.

[xxv] Id.

[xxvi] Id.

[xxvii] Id.

[xxviii] Schoeff v. R.J. Reynolds Tobacco Co., 232 So.3d 294 (Fla.2017)

[xxix] https://www.tallahassee.com/story/news/politics/2023/03/24/thousands-lawsuits-filed-florida-before-limits-kick-in-desantis/70045705007/