Florida’s New Tort Reform
On March 24, 2023, Governor Ron DeSantis signed into law a comprehensive Florida tort reform bill known as House Bill 837. This new law brings about several big changes to how lawsuits and insurance claims work. These changes are meant to stop unnecessary lawsuits and protect insurance companies from unfair practices but are more likely to make it more difficult for the claimants to file for compensation. Here are the key things you need to know to be better prepared:
One important change in the new law, HB 837, is that it seeks to effectively eliminate one-way attorney fees which served to protect policy holders if they needed to sue their insurance carrier. What this means is that insured individuals and beneficiaries will now have to pay their own attorney’s fees if they sue an insurance company, even if they win the case. Before, if they won, the insurance company had to cover those fees. This change means that people might be less likely to sue insurance companies in Florida, and those who do might prefer to settle the case early because they have to pay for their own legal expenses.
Statute of Limitations
The new law also changes how much time people have to sue for negligence. Previously, they had four years to file suit for a negligence claim, now they only have two years to file suit, if the incident happened after March 24, 2023 when the law took effect. This means that claimants have way less time to prepare and file a lawsuit if they believe someone’s negligence caused them harm, and there will be fewer claims against insurance companies for unfair practices. This also means that it’s now more important than ever for the claimant to make sure they are properly and professionally represented by an attorney, who will thoroughly investigate the case and file all paperwork within the new statue of limitations. There’s no time to be wasted if one wants their case to proceed.
Bad Faith Claims
The new law brings important changes to how bad faith claims work. Let’s break down each point:
- Simply being careless or negligent is no longer enough to constitute bad faith. There need to be more grounds than just negligence to accuse the insurance company of acting unfairly.
- Insurance companies can avoid being accused of bad faith if they pay the maximum amount stated in the insurance policy or the amount the person making the claim asks for within 90 days of getting the claim.
- If the insurance company doesn’t pay within 90 days, it doesn’t automatically mean they acted in bad faith.
- If the insurance company doesn’t pay the claimant within 90 days, the time limit to sue them for bad faith is extended by an extra 90 days.
- In a bad faith lawsuit, the judge or jury can consider whether the person making the claim acted in good faith. If they didn’t, the amount of money awarded against the insurance company may be reduced.
- If multiple people are making claims for the same incident, and the total amount they’re asking for is more than what the insurance policy covers, the insurance company is not considered acting in bad faith if they don’t pay. Instead, they can either go to court or follow specific procedures mentioned in the law.
These changes make it easier for insurance companies to avoid getting accused of acting in bad faith or reduce the amount of money they must pay out if they can show that the person making the claim acted unfairly. These changes, along with the shorter time limit to sue, will make it harder for people to file claims and get fairly compensated for the pain and losses they endured.
Florida’s damages recovery system has shifted from pure comparative negligence to modified comparative negligence, except for medical negligence cases. Under the new standard, a claimant who is more at fault for their injuries than the defendant will not be able to recover damages from the defendant. This change provides protection to insurers from claims made by individuals who are mostly responsible for their own injuries, exceeding 50% of fault.
Additionally, there is now a presumption in favor of the premises owner in premises liability cases which the plaintiff will have to overcome.
How Does This Affect You?
In theory, the goal of this new law is to reduce unnecessary lawsuits and protect insurance companies from unfair claims. Sadly, in reality, this might end up harming honest claimants, who file for compensation based on real endured damage.
These new laws impact those making claims against insurance companies or those pursuing legal action for negligence in several significant ways:
- Increased Responsibility for Attorney’s Fees: Claimants will now bear the burden of their own attorney’s fees in insurance cases, regardless of the case outcome. This means that if they file a lawsuit against an insurer, they will need to pay for their legal representation, win or lose. This change may discourage some claimants from pursuing legal action or push them towards seeking early settlements to avoid the financial burden of attorney’s fees.
- Shorter Time Limit to File Negligence Claims: The statute of limitations for negligence actions has been reduced from four years to two for causes of action that accrue after March 24, 2023. This means that claimants have less time to file a lawsuit if they believe someone’s negligence caused their injuries. Consequently, there may be a decrease in the number of bad faiths claims against insurers. Claimants may rely more on breach of contract actions, which have a five-year limitations period in Florida.
- Changes to Bad Faith Claims: The legal framework for bad faith claims has been altered. Insurers can now avoid a bad faith action related to a liability insurance claim by promptly paying the policy limits or the amount demanded within 90 days of receiving notice of the claim. Failure to make the payment within 90 days does not automatically constitute bad faith. Additionally, the law emphasizes the duty of insured individuals, claimants, and their representatives to act in good faith when providing information, making demands, and attempting to settle an insurance claim.
- Impact on Comparative Negligence: The new law changes how much money you can get if you’re partly to blame for your injuries. Let’s break it down:
Under the old rule, if you got hurt and it was partly your fault, you could still get money from the person who caused the injury, no matter how much at fault you were. But now, under the new rule, if you’re more to blame for your injuries than the other person, you can’t get any money from them. This change helps protect insurance companies from claims made by people who are mostly responsible for what happened, even if they have insurance.
So, if you’re more than 50% at fault for your injuries, you won’t be able to get monetary compensation from the other party or their insurance company.
Overall, these new laws place more responsibility and financial burden on claimants, restrict the time available for pursuing legal action, provide additional safeguards for insurers against bad faith claims, and limit the ability to recover damages when the claimant is predominantly at fault. However, we’ll have to wait and see how these changes play out and affect people’s rights and insurance claims in the future.
Contact Nerina Smart
The new Florida tort reform laws, brought about by HB 837, has introduced significant changes that impact claimants and their legal rights. With alterations to attorney’s fees, statute of limitations, bad faith claims, and comparative negligence, it is essential for Florida residents to understand how these laws may affect them in their pursuit of fair compensation and justice. If you have any questions or concerns about these new laws and how they specifically apply to your situation, it is advisable to seek legal guidance. For assistance and further information, you can contact the Law Offices of Nerina Smart, P.A., who can provide the necessary expertise and support.