Recent tort reform legislation enacted in Florida on March 24, 2023, known as the Florida Tort Reform Act or House Bill 837, will have a sweeping impact on property owners and litigation. This article will examine two critical areas: the effect on property owner rights and the potential impact on litigation.
Effect on Property Ownership Rights
Reduction in the Statute of Limitations. Reducing the Florida statute of limitations for negligence actions from four to two years is one of the act’s most significant provisions. This could have a substantial impact on property owners in the state.
On the one hand, reducing the negligence statute of limitations could reduce the number of lawsuits filed. Fewer cases could minimize litigation expenses and the duration of legal disputes, which would be advantageous to property owners. This modification could also encourage prompt claim submission, resulting in speedier resolutions and less uncertainty for property owners.
On the other hand, this change could increase litigation in the immediate future over issues such as when claims accrue and whether the delayed discovery doctrine will toll the statute of limitations. Due to the shortened statute of limitations, this could contribute to a rise in the number of dismissed claims and an increase in legal fees for property owners.
Elimination of Statutory “One-Way” Attorney Fee Entitlement. The act also eliminates the “one-way” statutory entitlement to attorneys’ fees in coverage disputes for insurance policyholders. Over a century ago, this provision of Florida law permitted policyholders who prevailed in a coverage dispute with their insurer to recover attorneys’ fees almost automatically.
Elimination of this provision could significantly impact property owners. Even if they prevail in a coverage dispute, property owners may now be responsible for their attorneys’ fees, thereby increasing the financial risk of pursuing litigation against an insurer. Paying attorneys’ fees could dissuade property owners from pursuing valid claims, resulting in more disputes resolved in insurers’ favor.
Effect on Litigation
The tort reform legislation in Florida has also substantially affected litigation, including trial attorneys. The act’s modifications can significantly alter the insurance litigation landscape in the state.
Surge of Lawsuits. In response to the law’s enactment, trial attorneys filed a record number of lawsuits ahead of the changes. The Florida E-Filing Portal reported 90,593 new circuit civil cases filed in the five days between March 17 and March 22 compared to the 27,586 cases filed statewide nearly three months prior.
Trial attorney John Morgan, founder of the personal injury firm Morgan & Morgan, launched a what he called a “Herculean effort,” filing roughly 25,000 suits before Governor Ron DeSantis signed the law.
“If we hadn’t done it, our clients would have been looking at us, saying, ‘Why didn’t you do it?’ We would have been guilty of legal malpractice. It had to be done,” said Morgan in the “South Florida Sun Sentinel.”
As the courts work through the backlog of cases, this influx of lawsuits could diminish the benefits of insurance reform for consumers as the courts clear the backlog. The tsunami of cases may delay disputes and increase legal fees for all involved parties.
Modifications to Attorney Fees in Insurance Claims. The act’s modifications to attorneys’ fees in insurance disputes may also have a substantial eect on trial attorneys.
Eliminating the “one-way” statutory entitlement to attorneys’ fees in coverage cases could reduce the financial incentive for attorneys to pursue certain types of insurance cases. Fewer attorneys may accept these cases, making it more challenging for property owners to find representation in coverage disputes.
However, the act provides a limited right to fees in third-party liability cases, but only when the insurer has “made a total coverage denial of a claim.” This provision could encourage attorneys to take on these types of cases, which could increase the number of cases filed for third-party liability.
The Florida Tort Reform Act has significantly altered the state’s legal landscape, with far-reaching consequences for property owners and litigation. The act’s impact, intended to make Florida more business- and insurer-friendly, will be revealed over the next few years.
For property owners, the act’s modifications may increase legal fees and uncertainty in coverage disputes. For insurers, the act could also expedite claim resolution and reduce the number of meritless lawsuits.
The act could reduce the financial incentive for trial attorneys to accept certain insurance cases, making it more difficult for property owners to find counsel in coverage disputes.
However, the act may also result in a rise in third-party liability cases and create opportunities for attorneys in this field.
In closing, the Florida Tort Reform Act represents a significant transformation in Florida’s real estate and legal landscape, necessitating continuous monitoring of legal developments, thorough analysis of the implications of these alterations and strategic planning to navigate the new legal environment.