Insurance industry groups are sounding the alarm regarding a bill currently progressing through the Florida House of Representatives, warning that it could reverse the positive outcomes achieved by reforms enacted just two years ago.
The American Property Casualty Insurance Association (APCIA) has voiced “very concerned” sentiments about several bills advancing in the Florida House, which they believe would undo the recently implemented legal system abuse reforms. According to Adam Shores, senior vice president of state government relations at APCIA, House Bill 1551 (Attorney Fee Awards in Insurance Actions) contains language that is “ambiguous” and could potentially “re-open the door to exorbitant fee awards for billboard lawyers.”
HB 1551 proposes that courts must award attorney fees to the prevailing parties in civil actions against admitted and surplus lines insurers brought by named or omnibus insureds, or named beneficiaries. The bill successfully passed the Florida House insurance banking subcommittee with a 15 to 1 vote on March 20, following a 16 to 1 vote in the civil justice and claims subcommittee. It is now slated for consideration by the Florida House judiciary committee.
“Previous research has shown that plaintiff lawyers are the real winners in insurance lawsuits – not policyholders,” Shores stated, citing a 2021 report. The report revealed that from 2013 to 2020, insurers in Florida paid out $15.3 billion for insurance lawsuits. A significant 71% of those funds were allocated for plaintiff lawyer fees, while a mere 8% benefitted policyholders.
Shores further explained that this “out of balance scheme was a key driver of Florida’s insurance crisis”, which is why lawmakers supported and Governor DeSantis signed into law reforms to Florida’s one-way attorney fee statute in 2022-2023. “These reforms are indeed working, and we urge lawmakers to stay the course.” APCIA highlights that Florida’s insurance market has shown “steady improvement” since the reforms, with rates stabilizing and many companies requesting rate decreases. They noted that 11 new insurers have also entered the marketplace.
The Personal Insurance Federation of Florida (PIFF) also opposes HB 1551, cautioning on X, formerly Twitter, on March 20th, that the bill “is a ‘one-way’ fee shifting law in disguise” that will “undo important and beneficial reforms passed by the legislature only 24 months ago.” PIFF emphasized that Florida is on a positive trajectory and that “HB 1551 is a U-turn we hope the Florida legislature does not make.”
Republican Representative Hillary Cassel, who is an attorney, filed HB 1551 in the Florida House of Representatives. She explained her intention: “House Bill 1551 was filed to strike a balanced approach to Florida’s insurance litigation landscape by ensuring both consumer protection and the reduction of frivolous lawsuits.” Cassel added the legislation aims to provide policyholders a “fair pathway to recover attorney fees when they prevail in disputes against insurers, thus discouraging wrongful claim denials.” She indicated the bill establishes clear guidelines for determining prevailing parties, safeguarding insurers from being “unfairly burdened with excessive litigation costs when legitimate settlement offers are made in good faith.”
