HB 7071 – Relating to Contingency Risk Multipliers

On Thursday, February 13, HB 7071, sponsored by the House Judiciary Committee, was heard by the House Commerce Committee and was reported favorable with 16 yeas and 7 nays. AIF’s Senior Vice President of State and Federal Affairs, Brewster Bevis, stood in support of this legislation.

In certain situations, after the resolution of a court case, the court may require one party to pay the opposing party's attorney fees. Several Florida and federal statutes, known as "fee-shifting statutes," entitle the prevailing party to a "reasonable" attorney fee as a matter of right. When a fee-shifting statute applies, the court must determine what constitutes a "reasonable" attorney fee.

Florida courts calculate reasonable attorney fees under the "lodestar amount.” The lodestar amount, in this context, is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate for the attorney’s services on behalf of the insured or beneficiary.

Federal case law states that a contingency fee multiplier may only be used in rare and exceptional circumstances, and that the multiplier is completely unavailable under certain federal statutes. Contrary to Federal case law, the Florida Supreme Court in 2017 ruled that the contingency fee multiplier in Florida courts is not subject to the "rare and exceptional circumstances" requirement. Thus, there is now a difference between Florida and federal law with respect to this issue.

The bill prohibits a court from using a contingency fee multiplier when calculating an attorney fee award unless an applicable statute expressly allows use of the contingency fee multiplier.

HB 7071 will now move to the House floor for consideration.

AIF supports legislative efforts that prevent unscrupulous actors from taking advantage of property insurance disputes which will keep insurance rates low and allow growth in Florida businesses.