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New Legislation Helps Dig Florida Out of a “Judicial Hellhole”

March 29, 2023

New Legislation Helps Dig Florida Out of a “Judicial Hellhole”

On Friday, March 24, 2023, Florida Governor Ron DeSantis signed House Bill (HB) 837 into law. HB 837, a tort reform bill commonly referred to as the Civil Remedies bill, has far reaching ramifications for businesses that have operations in Florida. Effective immediately, this legislation takes aim at frivolous lawsuits, with the goal of making Florida’s economy more competitive. According to Governor Ron DeSantis, “Florida has been considered a judicial hellhole for far too long and we are desperately in need of legal reform that brings us more in line with the rest of the country.” The Civil Remedies legislation proposes to do just that.

Listed below are several components of the new legislation:

  • It establishes a shorter statute of limitations for negligence claims.
    The statute of limitations (the amount of time that parties have to initiate legal proceedings after an event) on negligence claims has been cut in half. With HB 837, it is now two years, instead of four years.
  • It introduces a modified comparative negligence approach.
    Essentially, plaintiffs who are found to be 50% or more at fault in an incident can no longer collect damages. Previously, Florida had what is called a pure comparative negligence rule, which allowed plaintiffs to recover damages even if they were found to be primarily at fault. HB 837 changes this to what is called a modified comparative negligence rule, similar to that found in 34 other states.
  • It eliminates phantom damages and increases transparency in civil lawsuits.
    Juries are now entitled to hear evidence regarding the actual amount of medical expenses paid by a patient or an insurance company rather than the listed retail price of the medical charges (so-called phantom damages). Typically, the listed retail price is significantly higher than the adjusted amount that actually gets paid. For instance, a hospital may bill $20,000 for treatment; however, the insurer may negotiate a payment of $7,000. The $13,000 difference between the two numbers would never be owed or paid. Prior to HB 837, juries would only be made aware of the higher amount—in this example, that would be the $20,000 bill. The new legislation eliminates these phantom damages, allowing for greater transparency. This change gives juries access to more accurate and vital information in civil lawsuits.
  • It modernizes bad-faith laws.
    Policyholders will now have to demonstrate more than negligence on the part of an insurer to meet the threshold for a bad-faith claim. It also imposes a duty on the policyholder to act in good faith when providing information regarding a claim, issuing demands, setting deadlines, or attempting to settle. The intent is to eliminate false bad faith claims.

The impact of these changes to Florida law will be felt far and wide. This new legislation carries the potential to lower the costs of litigation, as well as lower insurance and medical costs for both businesses and consumers.  

If you have any questions about this new law or its impact on your claims, please reach out to your Graham Company Claims Consultant.

Christa Solfanelli, Esquire,

General Counsel

csolfanelli@grahamco.com

215.701.5273

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