The Personal Insurance Federation of Florida is backing a slate of reforms aimed at reducing litigation costs during the 2020 Legislative Session.
The group, a trade association made up of personal lines property and casualty insurance carriers, says excessive lawsuits have hampered the post-Hurricane Michael recovery effort in Northwest Florida and the high cost is adding to the burden of those still recovering from the storm.
“The residents and communities in Hurricane Michael-affected areas need our continued help,” PIFF President and CEO Michael Carlson said. “If there is some good news, the numbers show most insurance claims are resolved. But as claims continue to come in, we must be mindful of ongoing litigation challenges in both the auto and property insurance markets. We need to address these stressors and will continue to promote policies that can reduce insurance rates.”
At the top of PIFF’s list was legislation to end “contingency fee multipliers.”
The multiplier allows courts to award higher fees to attorneys who take cases on contingency in order to compensate them for the higher risk.
Ending the multiplier is also a priority of Floridians for Lawsuit Reform, which launched a campaign to raise awareness on the need for lawsuit reform last week.
SB 914 by Republican Sen. Jeff Brandes would end the multiplier under most circumstances. It cleared its first of three committee stops last week. Carlson issued a statement in support of the bill after the affirmative vote.
“Use of the fee multiplier is already severely limited at the Federal level, yet today in Florida, attorneys taking on routine residential property claims are asking to be paid twice or even three times their hourly rate, not because they deserve it but because they can,” he said. “And those costs are passed on to insurance consumers.”
In addition to Brandes’ bill, PIFF is backing measures that would bring more regulation to litigation financing by requiring financiers to register with the state (SB 1828 and HB 7041); require more disclosures and banning the use of misleading terms or images in legal advertising (SB 1288); and fixes to the “insurer bad faith law,” which allow for unlimited damages (SB 924).
Of the set, only SB 924 — also sponsored by Brandes — has been placed on a committee agenda. It goes before the Senate Banking and Insurance Committee Tuesday.
According to the committee’s staff analysis, the bill would block third-party bad faith determinations against insurers if the insurer shows it was willing to settle a claim for policy limits within 45 days of receiving a notice of loss.