Major Florida Civil Justice Reform Package Signed Into Law

It was a watershed moment in Florida this week as the Legislature passed massive civil justice reform legislation, and today, Gov. Ron DeSantis signed the measure into law. After years of testimony, legislative one-on-one meetings, and special advocacy campaigns, concrete steps were taken to address perhaps the country’s worst litigation environment.

For years, Florida’s legal environment has encouraged opportunists to take advantage of residents and small businesses at the expense of the state’s economy. This abuse has added to the challenges of providing insurance coverage in the state. The new law will help reduce the proliferation of costly, abusive lawsuits that have victimized so many in recent years. It will bring fairness, balance, and economic stability to the state, critical to the long-term goal of achieving a healthy and competitive insurance marketplace.

To cite one example of the state’s litigation history: in recent years about 9 percent of homeowner property claims nationwide have been filed in Florida, yet the state has accounted for 79 percent of insurance-related lawsuits. This abuse is not limited to property and negligence claims. There are tens of thousands of personal injury protection and auto glass insurance lawsuits filed each year, using the same litigation-for-profit model this legislation seeks to reduce.

This crucial civil justice reform package contains provisions covering seven major areas: third-party bad faith, comparative negligence, fee multipliers, one-way attorneys’ fees, statutes of limitations, transparency in damages, and premises liability.

Third-Party Bad Faith

To encourage settlements and discourage litigation, this section of the legislation requires third parties to cooperate in good faith and allows insurers to pay the lesser of policy limits or the demand within 90 days of the notice of claim. It also reverses Florida Supreme Court rulings that have led to ordinary negligence being deemed bad faith, and if multiple third parties make claims exceeding a policy’s limits, insurers may have a judge or arbitrator determine how the policy limits should be distributed.

Modified Comparative Liability

This section promotes personal responsibility by stating that a party more than 50 percent at fault for their own injuries may not recover damages from other lesser at-fault parties.

Contingency Risk Multiplier

In 2017, the Florida Supreme Court rejected the federal standard that attorney fee multipliers should only be applied in “rare and exceptional” circumstances, ruling instead that multipliers could be applied in almost any case. This section expands provisions passed in SB 2A in 2022 and restores the award of contingency risk multipliers to only rare and exceptional circumstances for all litigation.

One-Way Attorney Fees

One-way attorney fees create a lopsided system that incentivizes plaintiffs and their attorneys to bring lawsuits. Many of these lawsuits come from vendors using assignments of benefits to sue for small amounts and generate attorney fees without the risk of paying their attorneys if they lose. This section expands provisions passed in SB 2A by repealing the one-way attorney fee statute for all litigation. This will have a major impact on auto claims in particular.

Statute of Limitations

Current Florida law provides a four-year statute of limitations for some negligence claims, but other negligence claims like professional malpractice and wrongful death apply a two-year statute of limitations. This section reduces the statute of limitations for negligence claims to two years.

Transparency in Damages

Inflated medical bills obscure the true cost of treatment and mislead juries. Sometimes these appear as a Letter of Protection, a murky agreement between the claimant’s lawyer and treating provider later sold at a steep discount. This section ensures that juries see the amounts a medical provider normally accepts or actually did accept from a factoring company for providing treatment. This section also reverses the 2017 Florida Supreme Court ruling in Worley v. Central Florida YMCA and allows defendants the same rights plaintiffs currently have to ask about a referral relationship between the opposing party’s attorney and the treating or consulting physician.

Premises Liability

This section states that in a lawsuit against a property owner for “negligent security,” a jury may consider the fault of the person who actually committed the underlying criminal act.

NAMIC commends Gov. Ron DeSantis, House Speaker Paul Renner, Senate President Kathleen Passidomo, and leaders in the Legislature for successfully passing this comprehensive civil justice reform package that will create a more fair litigation environment in the Sunshine State.