Summary of Changes to Florida’s Civil Justice System
The new law—
- Reduces the statute of limitations for general negligence cases from four years to two years, while providing protections to service members during terms of active duty that materially affect the service member’s ability to appear.
- Except for causes of action for personal injury or wrongful death arising out of medical negligence, changes Florida’s comparative negligence system from a “pure” comparative negligence system to a “modified” comparative negligence system, whereby a plaintiff who is found to be more that 50 percent at fault for his or her own harm may not recover damages from any defendant.
- Specifies that certain evidence is admissible to calculate medical damages in personal injury or wrongful death actions. These changes modify the collateral source rule in a way that allows the parties to present to the finder of fact evidence of actual medical costs or evidence that better approximates medical costs that may be incurred by a claimant.
- Removes the attorney-client privilege for medical referrals. This means that if the referral is made by the claimant’s attorney, disclosure of the referral is permitted along with evidence of the referral. The financial relationship between the law firm and a medical provider would be admissible as relevant to the issue of bias of a testifying medical provider.
- Modifies Florida’s “bad faith” framework to
- Provide that an insurer has no liability for a bad-faith claim if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days after receipt of the claim and sufficient evidence to support the claim.
- Provide that negligence alone is not enough to demonstrate bad faith.
- Require insureds, claimants, and their representatives to act in good faith with respect to furnishing information, making demands, setting deadlines, and attempting to settle the insurance claim.
- Allow an insurer, if there are multiple claimants in a single action, to limit the insurer’s bad-faith liability by paying the total amount of the policy limits at the outset to the court through an interpleader action or, through binding arbitration, making the entire policy limits available for payment to the competing third-party claimants.
- Provides that a contingency fee multiplier for an attorney fee award is appropriate only in a rare and exceptional circumstance, adopting the federal standard.
- Creates a strong presumption that a lodestar fee is sufficient and reasonable in any action in which attorney fees are determined or awarded by the court. This presumption can be overcome only in rare and exceptional circumstances.
- Repeals Florida’s one-way attorney fee provisions for insurance cases, while maintaining the ability to award attorney fees to an owner, contractor, subcontractor, laborer, or materialman who prevails in a claim against a construction surety bond.
- Creates a limited ability to recover attorney fees from an insurance company after a total coverage denial through a declaratory judgment action.
- Applies the offer of judgment statute to any civil action involving an insurance contract.
- Requires the trier of fact in a negligent security action against the owner, lessor, operator, or manager of commercial or real property brought by a person lawfully on the property who was injured by the criminal act of a third party, to consider the fault of all persons who contributed to the injury.
- Provides that the owner or operator of a multifamily residential property is presumed to not be negligent in connection with a criminal act occurring on the property if the property has certain safety and security features and, starting in 2025, obtains and substantially complies with a Crime Prevention through Environmental Design Assessment.
- Provides that the amendment to the statute of limitations for negligence actions applies prospectively to causes of action accruing after the effective date of the bill, that the remainder of the bill applies to causes of action filed after the effective date, and that the bill shall not be construed to impair any right under an existing insurance contract.
A Brief Overview of the Changes
Reduction of the negligence statute of limitations. The new law alters the statute of limitations in negligence actions. Currently, claimants in negligence actions have four years from the time of the incident to file a suit in Florida. Under the new law, the statute of limitations will be reduced by two years. Thus, claimants will only have two years from the time of the incident to file a suit.
Shift to a modified comparative negligence system. Under the new law, Florida moves from a pure comparative negligence system to a modified comparative negligence system. Under the current pure comparative negligence framework, a claimant’s recovery is reduced in proportion to the percentage of fault, if any, that his or her actions or inactions contributed to the damages or injuries sustained. In addition, a defendant can further diminish its liability to the claimant based on the comparative fault of others. Under the modified comparative negligence system, anyone found to be at least 51 percent liable for an incident cannot seek reparation from the other party. This change will not apply to medical negligence claims under Florida Statutes Chapter 766.
Limiting what evidence is admissible to prove medical treatment and expenses. The language of the new law significantly modifies what evidence is admissible at trial to prove medical treatment and expenses. Evidence offered to prove the amount of damages for past or future medical treatment in personal injury actions and wrongful death actions will be generally limited to evidence of the amount actually paid. Evidence offered to prove the amount necessary to satisfy unpaid charges will be limited to the amount the health care provider is obligated to pay, should the claimant have health care coverage other than Medicare or Medicaid. If a claimant has health care coverage and receives treatment under a letter of protection, the claimant will only be able to board the amount the claimant’s health care coverage would pay the medical provider to satisfy the past unpaid charges under the insurance contract or applicable regulation. If the claimant does not have health care coverage or maintains health care through Medicare or Medicaid, evidence offered at trial will be limited to 120 percent of the Medicare reimbursement rate in effect on the date of the incurred treatment or 170 percent of the applicable state Medicaid rate. Further, in personal injury actions and wrongful death actions, as a condition precedent to asserting any claim for medical expenses rendered under a letter of protection, the claimant must disclose the letter and an itemized billing ledger for the claimant’s medical expenses.
Attorney-client privilege for medical referrals. The new law amends section 90.502 of the Florida Statutes to expressly state that there is no attorney-client privilege for communications by an attorney to a client referring the client for treatment by a health care provider. Currently, these communications between the attorney and client are privileged under Worley v. Central Florida YMCA, Inc., 228 So. 3d 18 (Fla. 2017), and the body of case law adopting the same, including a 2021 case in which the Supreme Court of Florida noted, “[W]e recognize the concern about what the Fourth District described as a post-Worley uneven playing field skewed in favor of plaintiffs when it comes to the discovery of financial-bias relationships between the parties. . . .” Dodgen v. Grijalva, 331 So. 3d 679, 685 (Fla. 2021). This change would arguably end the so-called “uneven playing field” post-Worley, given that an insurer’s relationship and financial payments to its own medical expert are currently discoverable.
Conditions and standards for bad-faith actions. The new law radically augments Florida’s bad-faith law. Specifically, the language explicitly mandates that mere negligence alone is insufficient to constitute bad faith in both statutory and common-law actions. Moreover, the language imposes a duty on the claimant and the claimant’s attorney to act in good faith when furnishing information regarding the claim, issuing demands, setting deadlines, and attempting to settle. In this regard, the language aims to rein in claimants and their attorneys who seek to fabricate bad-faith claims by withholding information or imposing unrealistic deadlines. The law creates an immunity in bad-faith actions where the insurance carrier tenders either the lesser of the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim that is accompanied by evidence to support the amount at issue. It also creates a mechanism for the distribution of insurance proceeds when two or more claimants make competing claims stemming from a single occurrence and the amount sought exceeds the available limits. In that situation, the carrier can file an interpleader action or enter binding arbitration. Finally, the law repeals Florida Statutes sections 627.428 and 626.9373, which provide for one-way attorney fees against insurers.
Liability of residential property owners for criminal acts. The new language will protect apartment and other multifamily housing property owners from liability when a criminal injures a resident on the property. If the property owner takes certain precautions, such as securing video monitoring and lighting (among other things), the property owner will receive a presumption against liability. To obtain the presumption against liability, the owner or operator should install a security camera system at points of entry and exit that maintains retrievable footage for at least 30 days; install lighting that illuminates parking areas from dusk to dawn; install lighting along walkways and in laundry rooms, common areas, and porches; install at least a one-inch deadbolt in each dwelling unit door; install a locking device on each window; install locked gates with key or fob access along pool fence areas; and install a peephole or door view on each dwelling unit door that does not already include a window. There are several other requirements as well.
Effective Date
Per section 28 of the law, changes to the statute of limitations will only affect cases that accrue after the effective date of the act. Similarly, pursuant to section 29, changes in statutes pertaining to insurance policies will go into effect for policies issued after the bill was signed into law. Finally, section 30 of the law provides a catchall applying the act to all causes of action filed after the effective date unless otherwise expressly provided therein. As a result, there were thousands of lawsuits filed the week before the governor signed the bill into law, and the courts are now burdened with the task of handling this unprecedented influx.
Despite the statutory language, it is well settled in Florida that procedural law applies retroactively while substantive law does not. Moreover, statutory language regarding temporal reach is not dispositive. Under this framework, at least one Florida trial court has already held that section 768.0427 of the Florida Statutes is procedural and applies to pending cases. On May 19th, Circuit Court Judge Anne-Leigh Gaylord Moe of Hillsborough County entered an order granting the defendant’s motion in limine in the case styled Sharon M. Sapp v. James Brooks (No. 17-CA-5664). In so doing, the judge ruled that section 768.0427 (which governs the admissibility of evidence to prove medical expenses, disclosure of letters of protection, and recovery of past and future medical expenses damages) applies to pending cases, notwithstanding section 30 of House Bill 837. Continued litigation can be reasonably anticipated on the substantive-versus-procedural debate.
Impact on Products Liability Litigation
The change from a four-year to a two-year statute of limitations for negligence actions will not have much impact on products liability claims because the statute of limitations for strict liability claims remains four years. However, the shift to a modified comparative negligence system will place a greater focus on warnings and product misuse, given that a plaintiff found 51 percent at fault cannot recover damages.
