March 23, 2015
Over the next 24 hours, two committees of the Florida Legislature will be hearing some of the strongest legal reform bills for the business community that have been introduced this session. Below are brief summaries of the bills and the committee information where each will be presented. Please contact your legislators on these committees and encourage them to SUPPORT these important measures to stabilize our judicial system and strengthen Florida’s economy.
Fair Settlement – SB 1088
Florida law authorizes any party to bring a civil action against an insurer if the insurer does not attempt in good faith to settle claims. Although no one disputes that insurers should treat their customers in “good faith,” what that means is less than clear. This lack of clarity leads to abuse, such as lawyers asking insurers to agree to settlement demands within hours or face bad faith litigation. Bad faith claims expose insurers to amounts that exceed the insurance policy under which the claim is based.
Clarifying the distinction between “good faith” and “bad faith” would create certainty for everyone. Creating a simple, understandable, and straightforward rule will help claimants have a clear timeframe for having their request answered and provide insurers a clear expectation that, if not met, will then expose them to extra-contractual damages. Studies show that Florida’s failure to correct this issue currently adds $79 to each auto insurance policy - Imagine if the analysis was expanded to other lines of insurance!
Assignment of Benefits – SB 1064
This bill explains that the Assignment of Benefits (AOB’s) are the latest cost driver to break through the insurance market and is a scheme perpetrated by a cottage industry. Essentially, instead of just having a mechanism to get paid, contractors—with coaching from plaintiffs’ attorneys—are encouraged to take full legal standing away from policyholders. This is because the one-way attorney fee statute is transferable to these business assignees who then threaten or initiate litigation to put pressure on the insurer to pay them a higher reimbursement—or face attorney fee exposure.
AIF SUPPORTS these bills because it removes unnecessary and unscrupulous cost drivers from the insurance marketplace.
CLICK HERE to contact the Senators on the Banking & Insurance Committee and urge them to SUPPORT these bills today.
Tomorrow, the House Civil Justice Subcommittee will consider two bills to clarify how damages should be calculated in civil lawsuits so that certainty and clarity will be applied by our courts. This Subcommittee will also hear HB 1197 which is the House version of the Fair Settlement bill described above.
Punitive Damages – HB 1067
Almost sixteen years ago, Florida’s legislature passed one of the best punitive damages laws in the country. This 1999 law provided reasonable limits on the amount of punitive damages that could be awarded in a lawsuit, generally 3 to 4 times the amount of compensatory damages. The law established that punitive damages should not be awarded over and over for the same conduct.
This legislation will simply make Florida’s existing punitive damages statute apply to any case in which punitive damages are sought. The bill has no effect of any kind on claims for compensatory damages.
Medical Damage Calculations – HB 1199
Most providers of medical services offer (or are required to discount) their standard billing rates for the benefit of Medicaid, Medicare, or an insurance company. Under current law, a jury may hear and base its award on the standard billing rate. To arrive at the final compensation award, the trial judge reduces the award by applying the appropriate discount, if any. This reduction is based on the theory that the plaintiff would otherwise receive a windfall award.
Legislation should be proposed to change how expenses are calculated and move the determination of the value of medical services from the trial court judge to the jury. Where the medical bill has already been paid, the jury can be informed of the actual amount and the jury should not award a higher amount. Where services have not been paid (which may apply to past damages and will always apply to future damages), there should be a limit on the amount recoverable to the maximum amount that is customarily accepted in payment for such services in the same geographic area. Legislation should also prohibit an injured party from being awarded reimbursement for a medical service that was not medically necessary.
These bills are good for our businesses and the people of Florida. Our judicial hell hole needs a serious overhaul, and these measures are steps in the right direction.
CLICK HERE to contact the House Civil Justice Subcommittee members and urge them to SUPPORT HB’s 1199, 1067 and 1197.