Peter Schorsch
The House on Wednesday voted overwhelmingly in favor of HB 7071, sponsored by Rep. Mike Beltran, to limit exorbitant attorney fees on property insurance lawsuits.
HB 7071 now heads to the Senate, which must decide if it will hear the companion bill in its last remaining committee reference, the Senate Rules Committee.
SB 914, sponsored by Sen. Jeff Brandes, was last considered favorably by Senate Judiciary Committee on Feb. 4, but has remained stagnant for a month.
“I’m confident that this bill will restore the balance to this area of law,” Beltran said on the House floor. “And it will allow folks to continue to litigate valid claims and that attorney fees will be more reasonable.”
The legislation, which passed 72-46, has the backing of Floridians. Last month, more than 1,000 petitions were hand-delivered to the Legislature calling on them to act to alleviate homeowners’ property insurance rates by putting an end to contingency risk multiplier fees on property insurance claims, except in rare and exceptional circumstances.
Tort reform has long been a priority of Gov. Ron DeSantis and the Legislature. At an event last fall, where it was revealed Florida remains one of the worst legal climates in the nation, DeSantis said:
“That, to me, is more of a lawyer-driven culture than it is based on people who actually suffer harm. If we can make it so that it’s based on the clients rather than the attorney, I think that would be better.”
Contingency risk multiplier fees enable trial attorneys to pocket up to 30 times more than the value of the property insurance claim they represent. Trial attorneys are using homeowners’ claims to collect six-figure paydays, and insurance policyholders are footing the bill through higher premiums.
In one example, a trial attorney was awarded $1.2 million on a $40,000 dispute. In another, the trial attorney took home $750,000 on a $19,000 award. And in another, the trial attorney banked $700,000 on a $35,000 settlement.
In 2020, the Florida Office of Insurance Regulation has received requests from insurance carriers for rate increases so they can manage the exorbitant fees and rising costs of litigation. Rate increase requests range from 20% to 40%, and soon, if meaningful reform is not enacted, Florida homeowners will be paying the price.
One comment
Donald Phillips
March 6, 2020 at 9:26 am
Did you bother to read the judge’s order on the $1.2M fee award case? This was a simple $40K water damage claim that the insurance company invoked their managed repair clause on and instead of just paying the claim sent out their own people to do the repairs. That contractor never pulled permits and so totally botched the job that the homeowner asked them to leave. Litigation ensued and rather than try and settle the claim the insurance company took it to all the way to a jury trial. The jury awarded the homeowner everything they asked for. The insurance company than fought the jury award and also fought the homeowner’s attorney fees. The insurance company was aggressive in their defense and appeals that the judge actually describes their litigation methods as akin to a “knife fight in a dark alley”. The total awarded attorney fees based on the number of hours spent litigating the case was approximately $400K. The judge gave a 3 times multiplier. He was punishing the insurance company’s outrageous litigation behavior. That is exactly what the multiplier was meant to do. The company could have avoided all of this by simply paying the $40K claim they owed in the first place. That’s the real story here. How many other homeowners have been taken advantage of by this so called managed repair that insurance companies forced on them and didn’t bother to sue? However the insurance company lobbyists use outlets like yours to spin this as an abuse of the system by attorneys – outrageous.
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