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Despite all the work done by the Florida Supreme Court and Governor DeSantis to mitigate lawsuit abuse, much-needed reforms continue to stall in the Florida Legislature. Without these reforms, the trial bar is still able to capitalize, and they know it. For the state to be removed from the Judicial Hellholes® report, the Florida legislature must enact meaningful reforms to continue to improve the litigation climate.


Plaintiffs’ lawyers in Florida have long abused what are known as “letters of protection” to inflate medical expenses for the purpose of lawsuits. Letters of protection are agreements between a person who needs medical care, his or her lawyer, and a healthcare provider under which the healthcare provider agrees to not seek to collect a fee for medical treatment from the patient but wait to collect out of an expected settlement or judgment. Letters of protection can serve a legitimate purpose when a person is uninsured and unable to pay for medical expenses. However, some Florida lawyers recommend that their clients not use their insurance to cover medical expenses but rely on a letter of protection.

Under Florida law, at trial, jurors learn the initially invoiced amount of medical expenses, which is essentially a “sticker price” that is often three or more times the amount that is ultimately accepted by the healthcare provider as full payment. After a verdict, Florida law requires judges to adjust the award to reflect the actual amount of medical expenses paid and accepted, a process called a “set off.” Florida’s personal injury lawyers often use letters of protection to avoid this set off. By avoiding evidence of the actual value of medical treatment, there is no amount paid for a judge to set off the award.

In a prime example, a plaintiff in a case in Florida slipped and fell in a grocery store, injuring both knees, requiring identical surgeries on each knee. For the first knee surgery, the plaintiff used health insurance, and was billed $19,000 by the doctor but the total amount actually accepted as full payment was $3,400. However, the second knee surgery was performed under a “letter of protection,” resulting in $59,000 billed by and owed to the surgery center.

This type of abuse benefits no one but the lawyers and the medical clinics that may be in cohorts with them. The lawyers get to inflate the damage award and collect a larger contingency fee. The medical provider gets paid a rate that is much higher than market value. The plaintiff, however, has these high rates taken from his or her share of the judgment, even if they would have been covered by insurance.

Legislation can ensure that jurors receive accurate information on the actual value of medical expenses and prohibit abuse of letters of protection. The legislature also could place reasonable constraints on subjective and unpredictable noneconomic damage awards, which are particularly important for preserving access to affordable medical care.


Bad faith lawsuits targeting insurers continue to be fertile ground for trial lawyers looking to game the system, and the Florida legislature needs to address the larger issues at play.

In 2019, the American Property and Casualty Insurance Association released a study finding that Florida’s bad faith lawsuits cost insurers $4.6 billion every year, a cost that is then passed down to Florida consumers. More than 80 percent of Floridians think it is unfair that insurance rates rise due to excessive lawsuits and inaccurate claims against insurance companies.

Currently, most often in situations where there is clear liability, substantial damages, and low policy limits, trial lawyers use delay tactics and multi-pronged, impossible-to-satisfy demands to set insurers up for a bad faith action. Last year, the Florida Legislature failed to pass S.B. 924, which would have established a “reckless disregard” standard for bad faith claims against insurers.


Third-party litigation funding, or litigation finance, is an industry of investors, both large and small, who invest in lawsuits by providing funds in return for an ownership stake in a legal claim and a contingency in the recovery. While “crash cash” loan sharks have played a problematic role in litigation for several years, there is now an emerging group of hedge fund investors providing litigation funding for major class action lawsuits.

In 2013, a trade publication called The Hedge Fund Journal ran an article titled “The Emerging Market in Litigation Funding.” It termed litigation as a “very attractive asset class.” It was right. Life has been good for litigation finance since then.

In August 2021, a prominent lawsuit investor, Burford Capital (traded on the London Exchange), reported 95 percent annual return on invested capital and $500 million in new capital commitments. Australia-based Omni Bridgeway terms itself the global leader in litigation funding. Its website gives a state- by-state rundown on the environment for litigation finance in the United States.

The advent of litigation funding firms has flooded the system with millions of dollars and the notion of a plaintiff’s lawyer having to mortgage his firm to bring a case is from a bygone era. This practice enables parties to shift the financial burden of lawsuits off their balance sheets and minimize the risk of pursuing litigation. But the practice also increases the probability that meritless claims will be brought, creates questions about who is actually controlling the litigation other than the plaintiff and defendant, and makes settling lawsuits far more difficult and expensive. There is authority in Florida permitting these types of arrangements (for example, Kraft v. Mason), and consequently, Florida has been cited as an attractive state for investing in litigation, particularly given its size. The Legislature has thus far failed to respond to this questionable practice, and in 2021, the Legislature declined to pass H.B. 1293 or its Senate companion that would have reined in and regulated the use of litigation financing.


Attorney fee awards in ordinary insurance disputes are calculated under a so-called “lodestar” fee of the number of hours reasonably expended by the attorney multiplied by his or her hourly rate. Attorneys may also qualify for a “contingency risk multiplier” designed for rare and exceptional circumstances where the lodestar figure does not adequately compensate for a particularly difficult case, or one where it is hard to obtain capable and willing counsel.

Unfortunately, as a result of the Florida Supreme Court’s decision three years ago in Joyce v. Federated National Insurance Company (prior to Governor DeSantis’s appointments), contingency risk multipliers in Florida are now commonplace. As just one example, in a run-of-the-mill insurance coverage dispute,

Santiago v. Florida Peninsula Insurance Co., the court awarded the plaintiff’s attorney $1.2 million in fees on a $41,000 plaintiff’s award using a 2.0 multiplier. The chance that a court may award a multiplier in any given case is a real risk that is pushing defendants to pay higher, unreasonable settlements.


Combatting Frivolous COVID-19 Litigation

On March 29, 2021, Florida joined the growing number of states to pass COVID-19 liability protection laws designed to ensure businesses, health care providers, and other entities face fewer frivolous lawsuits tied to claims of COVID-19 exposure. Under Florida’s legislation, defendants are shielded from liability absent clear and convincing evidence of gross negligence. The law also requires that a plaintiff provide a supporting physician’s affidavit at the beginning of the case, and to show that the defendant did not make a good faith effort to comply with public health standards. The law creates a one-year statute of limitations for all COVID-19 related lawsuits. The liability protections apply retroactively, though not to claims filed before the law took effect.

Enacting Much Needed Property Insurance Litigation Reforms, Including on Attorney Fees

Through S.B. 76, the Legislature enacted several property insurance litigation reforms, including prohibitions on predatory advertising by contractors and public adjusters used to manufacture roof claims, stronger pre-suit requirements before filing property insurance-related suits, and a restructuring of attorney fee awards in property insurance disputes. Notably, under S.B. 76, any award of attorney’s fees to a prevailing insured will be directly tied to how successful the insured was in recovering the amount demanded through litigation. Should the claim proceed to trial, the new legislation requires the insured to obtain an award of at least 50 percent of the disputed amount in order to be entitled to all his or her reasonable attorney fees. Recoveries between 20 and 50 percent result in a proportionate recovery of attorney fees and costs. A recovery of less than 20 percent of the disputed amount means no fee recovery by the insured’s attorney.

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