Tort reform has been an issue for years in Florida with momentum for legislative and regulatory revision building every year before lawmakers go to Tallahassee and then – poof – the session is over and nothing has happened.
Will 2019 be different? Maybe. Then again, maybe not.
Tort reform is not being widely addressed by candidates in their campaigns and, even if Democrats gain ascendancy in the House, the Senate and/or the Governor’s mansion for the first time in 20 years in November, it is not a partisan issue. Trial attorneys are Democrats, too.
Florida’s “lawsuit climate” is ranked 46th in the nation by the Institute for Legal Reform, a Washington, D.C.-based organization seeking to limit liability awards that harm businesses and those who work for them.
In fact, the Institute labeled Florida a “judicial hellhole” several years ago, when the state had a slightly better ranking at No. 41.
Now, a newly published analysis of Florida’s legal environment says “excessive litigation” is providing some insight into just how much the state’s loose tort laws may be costing businesses and taxpayers.
According to the Perryman Group’s "Economic Benefits of Tort Reform” study, “excessive litigation” is costing the state’s economy more than $11.8 billion in lost productivity and more than 126,000 in fewer jobs a year.
The Perryman Group, a Texas-based “economic forecasting firm” that has completed similar analyses for 10 federal cabinet departments and the U.S. Federal Reserve, prepared the report for Citizens Against Lawsuit Abuse (CALA).
CALA is a Tallahassee-based group that has been lobbying for tort reform for years along with other organizations, such as the Florida Justice Reform Institute (FJRI), which was created by the Florida Chamber of Commerce in 2005 to lobby for changing the state’s lawsuit environment.
“These findings are very startling,” FJRI President William W. Large told Watchdog.org. “They detail how Florida’s lawsuit abuse climate is holding back our economy and costing every person real money. They should cause one to pause and wonder.”
According to the report, excessive tort lawsuits cost every Floridian $357 a year.
The study says the state’s retail trade sector is most affected, with an estimated 39,413 lost jobs, followed by 20,237 lost jobs in business services and 17,452 lost jobs in health services.
Lost personal income, comprised mainly of wages but also including payments such as interest and rents from these lost jobs total more than $7.5 billion in production that would otherwise occur.
The direct annual cost to the state’s government is $614.8 million and $516.0 million to local governments.
The state’s “flawed civil justice system … generates exorbitant levels of damages or numbers of awards and which is unpredictable in its outcomes” contributes to “negative impacts through the misallocation of society’s scarce economic and human resources,” the report states.
Large said tort reform could reduce or eliminate some of these costs.
He said state legislators should examine the state’s Personal Injury Protection (PIP) “no fault” auto insurance regulations, medical malpractice statutes and its assignment of benefits (AOB) law.
The Florida Supreme Court in 2017 ruled a 2003 law setting caps on pain-and-suffering damages in personal injury medical malpractice cases was unconstitutional.
The law, which had been strongly supported by then-Gov. Jeb Bush, limited non-economic damages in malpractice cases in which a patient was injured to $500,000, or $1 million if the injuries were catastrophic.
AOB agreements in property insurance policies are designed to expedite repairs to a damaged property by guaranteeing payment for “up front” work through a homeowner’s property insurance.
The controversial component of the AOB statute is its “one-way” attorney fee provision that, even if an insurer wins a court ruling, it must pay its own legal costs. Insurers maintain this “incentivizes” attorneys to persuade contractors to file AOB lawsuits as standard business practice.
These components of the state’s tort laws increase the cost of “insurance premiums, health care and consumer goods,” Large said.
Between November’s election and March 5, when the 2019 legislative session begins, Large said the FJRI will be reaching out “to educate elected officials about the need to address this.”