Florida Lawmakers Revisit Attorney Fee Structure in Property Insurance Disputes
TALLAHASSEE, Fla. — More than two years after Florida lawmakers implemented reforms aimed at stabilizing the property insurance market, a House panel has reopened a contentious debate concerning attorney fees in lawsuits against insurance companies. A bill (HB 1551), approved by the House Civil Justice & Claims Subcommittee on Thursday, would revamp a 2022 law that largely shielded insurers from paying their customers’ legal costs.
The proposed legislation, which passed the subcommittee with a 16-1 vote, has ignited fresh arguments about the balance between consumer protection and the financial health of the insurance industry. Proponents argue the 2022 law, which eliminated the “one-way” attorney fee system, tilted the scales too far in favor of insurance companies, limiting homeowners’ ability to challenge wrongfully denied claims.
“At some point, we as a Legislature have got to make sure that we’re standing up for the people of Florida and maybe not the insurance companies of Florida,” said Rep. Michele Rayner, D-St. Petersburg.
Critics of the bill, however, contend that the 2022 changes have been instrumental in attracting insurance carriers back to the state and curbing rate increases. Katelyn Ferry, representing the Florida Justice Reform Institute, voiced concerns during the hearing.
“Kudos to you. It (the law) is working,” Ferry said. “Why are we fixing it?”
The debate centers on long-standing disagreements about attorney fees in property insurance disputes. Prior to the 2022 law, Florida operated under a system where insurers typically covered a policyholder’s legal fees if the policyholder successfully sued over a denied claim. Supporters of this “one-way” system argued it protected consumers and leveled the playing field against deep-pocketed insurance corporations. Opponents, conversely, claimed the system incentivized excessive litigation and drained the industry’s resources.
Faced with a crisis of carriers dropping policies, rising rates, and insolvencies, the Legislature eliminated the one-way fee system in 2022, followed by additional legal changes in 2023 designed to aid the insurance industry. Proponents of the original reforms, including Gov. Ron DeSantis, maintain that these adjustments have been critical in stabilizing the market.
The House bill, sponsored by Rep. Hillary Cassel, R-Dania Beach, seeks to implement a “loser pays” system, where the prevailing party in a lawsuit would be awarded attorney fees. Cassel, a consumer attorney, claims this approach would incentivize settlements and reestablish equilibrium.
“This bill does not bring us backward,” Cassel said. “But this bill does bring us balance. We are currently in an unbalanced, unjust system.”
The bill has garnered support from groups such as the Florida Justice Association, representing plaintiffs’ attorneys. It faces opposition from business-backed organizations, including Associated Industries of Florida and the Florida Chamber of Commerce, as well as the Florida Insurance Council and the Personal Insurance Federation of Florida, representing national insurers.
Associated Industries of Florida lobbyist Adam Basford expressed concern that the bill could destabilize the market.
“We believe this bill points us back in the direction of less options and a more unstable market by being less focused on the true needs of policyholders, whether they be homeowners or businesses, and more focused on the needs of the lawyers,” Basford stated.
Rep. Susan Plasencia, R-Orlando, cast the sole dissenting vote in the subcommittee. The bill must pass two more House committees before it can be considered by the full House. A similar measure (SB 426) has been filed in the Senate by Sen. Jonathan Martin, R-Fort Myers.
News Service of Florida contributed to this report.
