OVERVIEW OF TORT REFORM HB 837
On March 24, 2023, Governor DeSantis signed House Bill 837, which was sponsored by Manatee County House member Tommy Gregory, ushered through the committee by Manatee County House member Will Robinson, and supported in the Senate by Manatee County Senator Jim Boyd. As a result of House Bill 837, the Florida legislature took away the rights of individuals and businesses, reversing decades of Florida law designed to protect people and small businesses.
PROHIBITS FIRST PARTY ATTORNEY’S FEES
The new law takes away your right to “First Party” attorney fees. These are fees from your own insurance company. This is very harmful to consumers. Here is an example: If you are in an accident and the repair shop says it will cost $5,000 to fix your car and your insurance company offers you $3,000, you now have no recourse. You will pay more to the attorney than the $2,000 you are fighting over. Before the change in the law, if you went to Court, and it was determined that the insurance company should pay the $5,000, they had to pay your attorney fees. Now they don’t, so what incentive do they have to pay you the $5,000?
LIMITS PIP BENEFITS
In Florida, we are all required to have Personal Injury Protection Benefits on our automobile insurance policy (PIP), which is sometimes called No Fault Benefits. That means regardless of who is at fault, your own insurance company pays your medical bills at 80% up to ten-thousand dollars ($10,000); however, the insurance company has the right to send you to a doctor of their choosing (CME) to determine if you still need treatment at any time after you claim those benefits. Prior to HB 837, if your doctor said you still need care and there are benefits left, and you have spent three-thousand dollars ($3,000) and have seven-thousand dollars ($7,000) left, you could file a PIP suit and recover attorney’s fees. This is no longer the case. After HB 837 was signed into law, insurance companies can now say we aren’t paying anymore of your PIP benefits. Again, you would have to hire an attorney and pay them to argue over the benefits they refused to pay. The cost of the attorneys fees would likely cost exceed the benefits you had left, preventing you from taking steps to recover the difference.
HB 837 HURTS SMALL BUSINESSES
How does Florida Tort Reform Bill HB 837 hurt small businesses?
Here is an example: Say you have a small business with a $1-million-dollar insurance policy and a person is hurt in some way by your business. Your insurance company (because they are the ones who get to decide to pay the claim, not you) decides they are not going to pay the policy limits to get you out of the suit. The lawyer for the injured party takes the case to trial and the jury awards the person that filed the suit $2 million. Who pays the other million dollars? Before HB 837 passed into law, you could assign your right to sue your insurance company for not protecting you, by paying the policy limits when they had the chance, to the injured party. The injured party could then release you from any debt your business owed and assume your right to argue that your insurance company failed to pay the million in coverage and get you out of the case while they could. If that argument won, your insurance company would be on the hook for the amount over your policy, plus the attorney fees to the “bad faith” lawyer who collected the excess funds.
After the passing of HB 837, the insurance company doesn’t have to pay the attorney fees. So, you can expect that, if your insurance company doesn’t voluntarily pay the extra $1 million, the attorney that has the excess $1-million-dollar verdict is going to try to collect by taking your business assets. That could be your company vehicles, equipment, accounts receivable, etc. I submit that this change will cause a number of small businesses that have excess verdicts against them to close, go bankrupt, or both.
AUTOMOBILE INSURANCE PRICES WILL NOT DECREASE DUE TO HB 837
The result of HB 837, as alleged by many of our local politicians and special interest groups, is that your insurance rates will go down, but it is my position that this has not happened, nor will it happen. Just as property insurance prices have risen, the rates on auto insurance will continue to rise. Insurance companies will save billions of dollars as a result of these changes at the expense of people and small businesses.