In only three short weeks, the Florida legislature has passed a new law, HB 837, which is a major overhaul of our civil justice system related to negligence and insurance cases. The bill was signed into law on March 24, 2023. Proponents of the new law claim it will bring a better balance and transparency to tort litigation, while those who oppose the law (like me and pro-consumer groups), believe it unfairly tilts the justice system in favor of insurance companies and big corporate interests. As a result, this will substantially change people’s ability to sue others for harm caused to them, especially where an insurance liability policy is responsible for paying the damages. This law will be litigated for the next several years and we’ll have to see how it plays out in the courts. Keep in mind this article is general information about the new law and should not be considered legal advice.
Statute of Limitations Cut in Half for Injury Claims
The new law makes significant changes to the statute of limitations. This is the time limit within which a person can file a lawsuit after being harmed by someone else’s negligence. Florida’s statute of limitations was previously four years but has now been reduced to two years. This means people will have less time to file a lawsuit after an accident. If you have a potential claim and have questions about the statute of limitations, you need to seek legal advice immediately.
New Modified Contributory Negligence Standard
Florida has historically applied the “pure comparative” negligence standard but now will apply a “modified contributory” standard. The concept of comparative negligence allows a plaintiff’s damages to be reduced by their percentage of fault if they are found partly responsible for their own injuries. For example, if a plaintiff is 51% at fault, they could still recover 49% of their damages from the other responsible party. However, under the new contributory negligence standard, if a plaintiff is found to be more than 50% responsible for their own injuries, they will not be entitled to any compensation whatsoever.
Bad Faith Law Amended
Florida’s Bad Faith Law also underwent major changes. When you file a claim with your insurance company in Florida, for a car accident or damage to your home, the insurance company is legally required to try and resolve the claim fairly and as quickly as possible. If the insurance company doesn’t act reasonably or fails to settle the claim when it had all the information needed to settle, it could be found to be in “bad faith” and exposed to additional damages.
Now, under the new law, the insurance company cannot be sued for bad faith if they pay the lesser of your policy limit or the amount you requested within 90 days of receiving actual notice of a claim accompanied by sufficient evidence to support the amount you are claiming (who decides what evidence is “sufficient”?). Under the new law, even if you are paralyzed in a car accident and need compensation immediately, the insurance company can sit back and wait for you to provide “sufficient” evidence of your claim and then take another 90 days to pay you (even if they only have a $10,000 liability policy).
One-way Attorneys’ Fees Removed
The new law does away with Florida’s roughly 130-year-old law requiring insurance companies to pay the policyholder’s attorney’s fees if a claim is denied or unpaid if the policyholder sues and wins in court. The purpose of these one-way fee provisions was that insurance companies can afford an army of lawyers, but an individual policyholder usually can’t afford to pay an attorney out of pocket. But you could hire an attorney on a contingency fee where the attorney agrees to wait for payment until they win the case and the fees will be paid by the losing insurance company, not the wronged policyholder.
Now, under the new law, the policyholder will likely have to hire a lawyer out of pocket. In many cases, if the amount in controversy is relatively small, it wouldn’t make sense to hire an attorney because the attorney fees may cost more than the amount in dispute. Therefore, the new law will protect insurance companies from lawsuits even after they delay, deny, or underpay first-party insurance claims.
Medical Expenses and Letters of Protection
HB 837 creates a new statutory provision, Florida Statute § 768.0427, which unfairly attempts to limit what information a jury can consider when deciding how much to award in past and future medical expenses. The new law allows for the introduction of evidence regarding health insurance, Medicare, or Medicaid rates for services and treatment, even when the claimant doesn’t have any insurance, or doesn’t have Medicare (Medicare rates are much lower than what most doctors charge on their usual and customary rates, so this may limit the amount recovered by plaintiffs leaving them with higher balances on their medical bills). Letters of protection, where a doctor agrees to be paid later from a settlement, will now have to be disclosed as well.
For past medical expenses that have been paid, a party will be able to present evidence of medical expenses in the amount actually paid for the services, not the original amount billed. Under the new statute, juries may consider what is “reasonable” for unsatisfied unpaid medical bills including what the claimant’s health insurer would have paid if the claimant had health insurance, or 120% of Medicare if they didn’t have health insurance. If there is no corresponding rate under the Medicare fee schedule, the jury may consider 170% of the Medicaid rate. Similar provisions apply to determining the amount recoverable for future treatment as well.
HB 837 Eliminates Negligent Security Safeguards
When someone is the victim of a crime at a business, like a hotel or an apartment complex, the criminal is prosecuted in criminal court, and a business could be prosecuted in civil court if it failed to have appropriate security and had a duty to ensure the safety of their business guests. The new law will now add the criminal defendant to the jury form in civil suits, meaning the jury may rightfully want to punish the criminal by finding him to be 100% at fault but fail to assign any blame to the business that negligently failed to provide a safe and secure environment for their guests, even though our civil laws require them to do so.
HB 837, while claiming to address frivolous lawsuits, limits the rights of Florida citizens. On the surface, HB 837 may seem reasonable, but experts argue it could have severe consequences. The new law will significantly alter the way in which negligence cases are prosecuted in Florida. A shorter time limit for filing lawsuits, an unfair standard for comparative negligence, protecting insurance companies from bad faith, elimination of attorney fee awards for policyholders, and a reduction of medical damages are just a few of the many changes that will negatively impact the rights of Floridians to be made whole after an accident or a denied insurance claim.