Jim Saunders – March 28, 2013
Amid a renewed lobbying fight between business groups and trial lawyers, a House panel Wednesday narrowly approved a bill that could help shield insurers from big-money lawsuits in disputes about settling claims.
The House Civil Justice Subcommittee voted 7-6 to approve a measure (HB 813) aimed at reining in what are commonly known as “bad faith” lawsuits. As an indication of how the issue splits lawmakers, the subcommittee — albeit with some different members — voted 8-7 to reject a bad-faith bill last year.
Major business groups, including the Florida Chamber of Commerce, Associated Industries of Florida and the National Federation of Independent Business, are lobbying for the bill. They face opposition spearheaded by the Florida Justice Association, whose members represent plaintiffs in liability lawsuits.
Joseph Kissane, a Jacksonville lawyer who represents insurers, told the subcommittee that plaintiffs’ attorneys use “gotcha tactics” to create bad-faith cases. Broadly, the cases involve allegations that insurers did not act properly to try to settle claims in the best interests of policyholders.
“Florida is not just toxic (for bad-faith cases),” Kissane said. “It’s come to the point where Florida is being laughed at.”
But Gary Farmer, president of the Florida Justice Association, disputed that there are what he called “set up cases.” He said state law obligates insurers to handle claims in good faith and in the interest of their policyholders.
“The obligations of insurers, basically just rooted in fairness, that we’ve had on the books … are being rolled back with this bill in a significant way,” said Rep. Jose Javier Rodriguez, D-Miami.
The bad-faith bill is part of a package of measures that business groups are pushing this year to try to help fend off costly litigation. A Senate bad-faith measure (SB 1284) has not been heard in committee.
As a simplified example, a bad-faith case could stem from an insurance-company policyholder getting sued because of an injury to another person. During a trial, the policyholder could be found liable for an amount above the limits of the insurance policy.
If the policyholder or the injured person thinks the insurance company failed to properly settle the case, a bad-faith lawsuit could result to try to force the insurer to pay damages.
HB 813, sponsored by Rep. Kathleen Passidomo, R-Naples, would create a 45-day window that would provide protections to insurance companies. If, within that period, insurers offer to pay the policy limits or lesser, agreed-upon amounts, they would be shielded from allegations that they acted in bad faith for not settling.
“The whole purpose of this 45-day period is to create a safe harbor in dealing with just the bad-faith aspect,” Passidomo said.
But Dale Swope, a Tampa attorney who sues insurance companies, said the 45-day period is not a safe harbor. He said it amounts to “immunity” for insurers that don’t act in good faith.
via Trial Lawyers vs. Business Groups: ‘Bad Faith’ Changes Take First Step | Sunshine State News.