Four Updates You Need To Know As Florida's Sweeping Tort Reform Takes Effect

Practitioners, pay close attention to the date of a complaint's filing—HB 837, the widely discussed and debated Florida tort-reform legislation, was signed by Governor DeSantis on March 24. Importantly, Florida legislators amended its effective date from July 1 (its original date in the draft bill), to the date Governor DeSantis signed the bill. Keep reading for notable changes that occurred after Phelps' initial alert that plaintiff and defense practitioners should carefully consider.

• Statute of limitations – The statutes of limitations for a claim of negligence, wrongful death, medical malpractice, libel or slander are now all two years.
  
  
• Limitation of medical bills as evidence – The bill was amended to limit admissible evidence for a plaintiff's computation of damages, specifically for medical bills. For past paid medical bills, the amount an insurer actually paid is the only amount admissible at trial. The initial billed amount cannot be used as evidence. For unpaid medical bills, it depends on what facts are presented for a determination of what is admissible:
  
  
  1. If a plaintiff has health care coverage, then the plaintiff may only present evidence of the amount of coverage the insurer would be obligated to pay for the medical services.
     
     
  2. If a plaintiff has health care coverage but chooses to opt into a letter of protection with a medical provider, then the plaintiff may only present evidence of the amount of coverage the health insurer would have reimbursed under an insurance contract or regulation (e.g. basically treating the plaintiff as if the treatment was through their health care coverage).
     
     
  3. If the plaintiff does not have health care coverage, then evidence of 120% of the Medicare reimbursement rate in effect on the date of the plaintiff's medical treatment, or, if there is no applicable Medicare rate for a service, 170% of the applicable state Medicare rate is admissible.
     
     
  4. If a plaintiff receives medical care pursuant to a letter of protection and the medical bill related to those services is then transferred to a third party to receive payment, evidence of the amount the third party paid or agreed to pay the health care provider (usually through a contract which can be subpoenaed) in exchange for the right to assign payment through the letter of protection is admissible.

• Conditions and standards for bad-faith actions – One proposed provision that did not make the final bill signed by Governor DeSantis is the 60-day statutory notice requirement and corresponding "cure" window for liability insurers before a third-party common law bad-faith action can be filed. Nevertheless, the bill still includes safeguards for liability insurers from bad-faith actions through other means. For example, the bill was amended to state that an action for bad faith against an insurer, whether brought under statutory or common law, shall not lie if the insurer tenders the lesser of the policy limits or the amount demanded by the claimant within 90 days after receiving actual notice of a claim accompanied by sufficient evidence to support the amount at issue. The bill specifies that the existence of the 90-day window (including the fact that an insurer could have prevented the bad-faith claim had it tendered) is inadmissible in any action seeking to establish bad faith on the part of the insurer. It notes that if the insurer fails to tender within the 90-day window, any applicable statute of limitations is extended for an additional 90 days.
  
  
• Repeal of one-way attorneys' fees – While the final bill did repeal sections 627.428 and 626.9373, Florida Statutes, which previously entitled insureds to recover attorney fees in any lawsuit against their insurer where any recovery was awarded to the insured, it also enacted section 86.121, Florida Statutes, which allows insureds to recover attorney fees if they prevail in coverage litigation against their liability insurer under certain circumstances. Specifically, insureds are entitled under the new law to recover reasonable attorney fees incurred in litigating a declaratory judgment action upon rendition of a declaratory judgment in favor of the insured following a total coverage denial by the insurer. The bill specifies that offering a defense to an insured under reservation of rights does not constitute a coverage denial. The right to recovery under the new fee statute cannot be assigned or acquired in any other manner by anyone other than the insured.

Thousands of cases were recently filed by plaintiff practitioners to get ahead of the legislation's passing, which will have a ripple effect for insurance carriers, defense firms and Florida courthouses in the imminent future. The bill's strictures do not apply retroactively, so any case filed before March 24 will not be governed by the bill. Cases filed after the effective date, however, must abide by the bill's language.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.