On March 23, 2023, the Florida Senate passed a sweeping tort reform bill known as HB 837. The bill was signed into law by Gov. Ron DeSantis the very next day and becomes effective immediately. Some elements of the new bill will apply to all causes of action filed on or after March 24, 2023, while other elements will apply to all causes of action accruing on or after March 24, 2023. The new law turns on its ear just about every fundamental aspect of Florida tort law, from the basic negligence statute of limitations to transforming Florida from a pure comparative fault state to a modified comparative fault (51% bar) state. The Republican-controlled Senate voted 23-15 to pass the bill. One Democrat, Linda Stewart of Orlando, voted for the bill. Four Republicans — Jennifer Bradley of Fleming Island, Jason Brodeur of Sanford, Erin Grall of Vero Beach and Jonathan Martin of Fort Myers — voted against it.
The new law is one of the most sweeping revisions of state tort law ever. The new law became effective on March 24, 2023, and is applicable to all lawsuits filed on or after that date. Fl. Legis. 2023-15, 2023 Fla. Sess. Law Serv. Ch. 2023-15 (C.S.C.S.H.B. 837). As a result of these dramatic changes, plaintiffs’ lawyers rushed to file tens of thousands of lawsuits before the new tort reform measures kicked in. The Florida defense bar sent a letter to the Supreme Court expressing concern over the more than 70,000 lawsuits filed from March 18 to March 23. Florida’s e-filing portal posted the following message immediately after the bill became law:
You may experience a delay with docketing due to a heavy influx of new Circuit Civil cases filed in response to the passage of House Bill 837 referred to as “tort reform”.
Most of these new laws will affect subrogation lawsuits filed by subrogated insurance companies. Subrogation professionals everywhere should make themselves familiar with the drastic changes which took place.
Statute of Limitations
Previously, and with only a few exceptions, Section 95.11 provided for a four (4) year statute of limitations for all actions based on negligence. Auto accidents, premises liability and wrongful death cases all previously had a 4-year statute of limitations. Civil injury cases that were not based on negligence had a 2-year statute of limitations. The new bill changed this, amending § 95.11 and reducing the statute of limitations for negligence actions from four (4) years to two (2) years. Florida now joins 44 other states which have negligence statutes of limitations of less than four years. Every case, claim, or file which a claims handler or lawyer is currently handling should be reviewed to make sure that the appropriate statute of limitations date is reviewed to reflect the shorter time frame.
While the negligence statute of limitations under § 95.11(4)(a) (negligence action) is now 2 years, § 95.11(3)(g) still provides a four-year statute of limitations for “an action for taking, detaining, or injuring personal property.” This seems to create a conflict within the statutes regarding property damage claims under a negligence cause of action. In Florida when two statutes of limitations conflict the more specific statute governs over the more general statute. However, neither statute of limitations seems to provide more specificity than the other. It is unknown how this issue will be decided but out of an abundance of caution it is best to assume the 2 year statute of limitations is applicable to property damage negligence claims.
Workers’ Compensation Subrogation Statute Not Amended
It appears that the legislature has overlooked the effect of the amended statute of limitations for negligence actions would have on workers’ compensation subrogation. Section 440.39 provides that an injured employee may file a third-party action against a responsible tortfeasor in the first year following a work-related accident. It provides:
“(4)(a) If the injured employee or his or her dependents, as the case may be, fail to bring suit against such third-party tortfeasor within 1 year after the cause of action” then the comp carrier can file suit.
During the second year, the right to file suit reverts to the subrogated workers’ compensation carrier. Section 440.39(b) says:
“(b) If the carrier or employer does not bring suit within 2 years following the accrual of the cause of action against a third-party tortfeasor, the right of action shall revert to the employee or, in the case of the employee’s death, those entitled by law to sue, and in such event the provisions of subsection (3) shall apply.”
If the carrier does not file suit in the second year, the right to file goes back to the employee who enjoys this right for both the third and fourth years following the accident. Section 440.39 was not amended, and still provides for a four-year period during which either the employee or the employer (workers’ compensation carrier) can file a negligence suit against the tortfeasor. Section 440.39 actually creates a new statutory cause of action. In U.S. Casualty Co. v. Town of Palm Beach, 74 So.2d 69 (Fla. App. 1960), the court said:
The rights of plaintiff carrier under the workmen’s compensation law are wholly the creature of the statute and are based upon the cause of action which the claimant had against the defendant city and subject to the limited subrogation rights under the terms and conditions set forth in section 440.39, Florida Statutes.
Therefore, it remains to be seen whether a work-related injury occurring after the passage of HB 837 will allow the employee to file a third-party action in the third or fourth years, or the right to file a third-party action ends with the carrier at the end of the second year. Under HB 837, §95.11(e) provides that the statute of limitations for “an action founded on a statutory liability” is still four (4) years—and §440.39 third-party actions might well fall under that statute, which could explain why it wasn’t amended.
Florida Changes From Pure Comparative Fault To Modified Comparative Fault (51% Bar)
Florida previously applied a “pure comparative” fault standard. Under such a negligence standard, the jury apportions fault among the responsible parties and the plaintiffs’ damages are proportionally reduced based upon their percentage of liability. Previously, a plaintiff who was 90% at fault could still recover 10% of his or her damages. Under the new law, any plaintiff found to be more than 50% or more at fault for causing an accident is barred from making a recovery (a/k/a “51% bar rule). Florida will join the 34 other states who have a modified comparative negligence standard. For a 50-state chart on the contributory negligence / comparative fault laws of all 50 states, see HERE.
Evidence and Calculation of Past and Future Medical Damages
The law in every jurisdiction allows plaintiffs to recover the “reasonable value” of the medical services incurred. Defendants across the country have begun objecting to medical bills identified in an exhibit list or via a motion in limine filed shortly before trial – by defendants seeking to exclude them. They claim that such medical expenses are neither “reasonable” nor “incurred” by the plaintiff. For a chart detailing the law in all 50 states with regard to the recovery of medical expenses, see HERE.
HB 837 creates a new statute in § 768.0427. This statute establishes a new process for the calculation of medical damages in personal injury actions and outlines the evidence that a jury must consider in awarding medical damages. The jury must now consider evidence of the amount paid for past medical services, even if paid for by an insurance company or workers’ compensation at discounted rates. With regard to future medical expenses, the jury must consider evidence of damages in amounts that vary according to whether the plaintiff has private insurance or Medicare or Medicaid. The jury must consider any evidence of reasonable amounts billed to the claimant for medically necessary treatment or services.
The new law prohibits an award of medical damages which exceeds the total of the amount actually paid by or on behalf of the plaintiff to the healthcare provider, the amount of charges for medical services that are owed at the time of trial and the amount of charges for any reasonable and necessary future medical treatment. Plaintiffs will only be able to present evidence of medical expenses in the amount actually paid for the services, not the original “retail” amount billed which is often an amount which is inflated to make up for Medicaid/Medicare and insurance reductions in medical payments.
Significantly, the new law limits the evidence that is admissible to prove the amount of damages which a plaintiff can recover for both past and future medical treatment.
Past medical care. For past medical care that has been paid by insurance, evidence will be limited to the amount paid for the medical expenses, regardless of the source of payment. The evidence to prove past medical care that has not been paid depends on whether the plaintiff has insurance, Medicare, Medicaid, or no insurance:
- If the party has insurance other than Medicare or Medicaid, evidence is limited to the amount the insurer is required to pay the medical provider in satisfaction of the treatment.
- If the party has insurance but opts to treat under a letter of protection, evidence is limited to the amount the insurer would have paid under the policy if the party utilized their insurance would be admissible, plus the claimant’s share of medical expenses under the insurance contract, such as copays and coinsurance.
- If the party has no insurance, evidence is limited to 120% of the Medicare reimbursement rate at the time of trial. If there is no Medicare reimbursement rate that exists for the services, the admissible amount is 170% the applicable state Medicaid rate.
- If the party treats under a letter of protection and that bill is sold to a third party, the amount is limited to what the third party paid to purchase the bill.
- Plaintiffs will also be able to offer any evidence of reasonable amounts billed to the claimant for medically necessary treatment or services.
Future medical care. Evidence relating to future medical treatment will be handled in a similar fashion. In a case where the party has insurance other than Medicare or Medicaid, evidence of the amount the insurer would be required to pay the medical provider in satisfaction of the treatment is admissible. If the party is without insurance, evidence is limited to 120% of the Medicare reimbursement rate at the time of trial for such treatment is admissible; if there is no applicable Medicare rate for the future treatment at issue, 170% of the applicable state Medicaid rate amount is admissible.
Under the new law, a jury award for medical expenses, past or future, may not exceed the sum of the following:
- The amount actually paid by or on behalf of the injured party to the medical provider regardless of who paid;
- The amount necessary to satisfy charges for medical services that are owed or not yet satisfied at the time of trial; and
- The amount necessary to provide for any reasonable and necessary future medical treatment.
The purpose of the new bill was to limit a plaintiff from recovering any amount for medical expenses, past or future, beyond the amount that was actually paid or will actually be paid.
Required Disclosure of Letters of Protection
One of the ways in which trial lawyers inflate medical billing is the use of letters of protection (LOP)— an agreement between a medical provider and an injured plaintiff whereby the doctor or hospital agrees to provide medical services with the understanding that they will be paid if and only the lawsuit is resolved. Plaintiffs will often times use a letter of protection to place excessive medical bills in front of a jury, claiming the figures to be reasonable and necessary just to negotiate these figures down to 50-75% below the billed amounts once a settlement has been reached. Previously, Florida courts were not allowed to reduce awards for bills not yet paid, allowing letters of protection to “prop-up” unrealistic medical charges.
Under the new Section 768.0427, Florida Statutes, a plaintiff using a LOP must disclose:
- a copy of the LOP
- all billings for the rendered medical expenses, with particular coding as applicable that allows for comparison of the medical expense to other providers or facilities;
- the name of any third party that has received the right to payment for the services and the dollar amount paid for the purchase of this right;
- any healthcare coverage that the plaintiff had at the time of treatment, and;
- anyone who may have referred the plaintiff for treatment under a LOP.
Under the last bullet point above, the attorney-client privilege regarding communications relevant to a lawyer’s act of referring the client for treatment is voided.
Use of Contingency-Fee Multipliers Is Limited
Recovery of attorneys’ fees is generally not recoverable by plaintiffs in Florida unless expressly provided for by contract or statute. When the recovery of fees is authorized, Florida courts follow the “lodestar method” whereby attorney’s fees are calculated using the number of attorney hours reasonably expended on the matter multiplied by the reasonable hourly rate. Fla. Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985). In contingency fee cases, the attorney taking on the representation has agreed to receive no compensation if his client does not prevail. Under Rowe, the Florida Supreme Court has told Florida courts that they may adjust the lodestar amount in light of that contingency risk and apply a multiplier from 1.5 to 3.0 based on the “likelihood of success” at the outset of the case.
HB 837 changes this legal framework by adding a statute directing that “[i]n any action in which attorney fees are determined or awarded by the court, there is a strong presumption that a lodestar fee is sufficient and reasonable.” Under the new law, this presumption “may be overcome only in a rare and exceptional circumstance with evidence that competent counsel could not otherwise be retained.” The law thus makes the lodestar amount the presumptive fee absent exceptional circumstances.
Premises Liability Law Is Modified Related to Certain Negligent Security Claims
Finally, HB 837 modifies premises liability law. Section 768.0701 requires a jury to consider the fault of the criminal in negligent security cases involving criminal acts by third parties. Section 768.0706 creates a “presumption against liability” for negligent security claims against owners and operators of “multifamily residential property,” such as an apartment or condominium community, where the owner or operator has implemented certain security measures on its property. The bill also creates a new section of the Florida Statutes that replaces joint and several liability with comparative negligence in certain negligent security lawsuits involving injury from a third party’s criminal act on commercial or real property.
The New Law Applies to Causes of Action Filed After the Effective Date
The new law took effect immediately on March 24, 2023. The law contains an exception for the change of the statute of limitations for negligence actions from four to two years. That section applies only to “causes of action accruing after the effective date.” But the law does not contain an exception for other provisions, including the change from pure comparative negligence to modified comparative negligence. Consequently, for all causes of action filed on March 24, 2023 or later, modified comparative negligence now applies, even if the accident giving rise to the action occurred years ago.
Effect on Subrogation Cases
Florida’s new law dramatically affects personal injury cases, so it will naturally—albeit indirectly—dramatically affect subrogation cases – especially those involving medical expenses such as workers’ compensation subrogation. If the plaintiff must recover less than previously, there will be less money to go around to repay subrogation interests – and trial lawyers will fight that much harder to destroy or limit those subrogation rights. When a subrogated carrier is prosecuting a third-party subrogation case on its own initiative, the limitations contained in the new law will also apply to its subrogation efforts.
If you have any questions on the new Florida laws or the effect they will have on your subrogation rights, contact Elizabeth Hernandez in MWL’s Jacksonville, Florida office at [email protected].
Elizabeth K. Hernandez is an insurance litigation trial attorney and managing partner at Matthiesen, Wickert & Lehrer’s Jacksonville, Florida branch office. Elizabeth is licensed to practice in Florida and her practice focuses on complex property and casualty subrogation, workers’ compensation subrogation, and automobile subrogation.