Tort Reform Comes to Florida

On Friday, March 24, 2023, Gov. Ron DeSantis signed into law HB 837: Civil Remedies, bringing sweeping tort reform in the state of Florida. In a statement, the governor said, “Florida has been considered a judicial hellhole for far too long, and we are desperately in need of legal reform that brings [Florida] more in line with the rest of the country.” The law became effective immediately and introduces significant changes to how lawsuits are litigated in Florida.

A flurry of new lawsuits from the plaintiffs’ bar (some estimates exceed 100,000 new filings) arrived in the short time between the Florida Senate passing the law — in a 23-15 vote — and the governor’s signature.

Although the new law modifies numerous statutes, this update focuses on the changes related to statutes of limitation, comparative negligence and the admissibility of evidence of medical charges at trial¹:

• Statute of Limitations: Reduces the statute of limitations from four years to two years for general negligence cases.
• Comparative Negligence: Modifies Florida’s comparative negligence system from a “pure” comparative negligence system to a “modified” system (except for medical negligence cases). A plaintiff who is more than 50% at fault for their own injuries may not generally recover damages.
• Medical Bills Admissible at Trial: Creates uniform standards to assist juries in calculating the actual amount of medical damages in personal injury and wrongful death cases.

The law specifically provides that the shortened statute of limitations applies to negligence causes of action accruing after March 24, 2023. The act otherwise applies to “causes of action filed after the effective date of this act,” which is also March 24, 2023.

Reduction of the Statute of Limitations for General Negligence

A statute of limitations sets the maximum amount of time after an injury that an aggrieved party may file a lawsuit against a defendant. The new law reduces the statute of limitations for general negligence actions from four years to two years. However, the limitations period for other types of claims — including claims founded on the design, manufacture, distribution or sale of personal property — remains unchanged. The differences in the statutes of limitations could result in garden-variety negligence claims being (improperly) cast as other causes of action to avoid a statute-of-limitations defense for a general negligence claim.

Modification of the Comparative Negligence System

The 1986 Tort Reform and Insurance Act made Florida a “pure comparative negligence jurisdiction” and abolished the doctrine of joint and several liability in most negligence actions. Accordingly, prior to the enactment of the new law, a jury in a typical Florida negligence action would apportion a percentage of fault attributable to a defendant and the court would then enter judgment against the defendant based on the jury’s apportionment of fault. Thus, a defendant would be responsible for their own percentage of fault.

The new law changes Florida’s apportionment standard from a pure comparative negligence approach to a modified comparative negligence approach. Under the new law, if a jury finds that a plaintiff is more than 50% at fault for their own harm, then the plaintiff is barred from recovering any damages from any defendant.

Uniform System to Accurately Value Medical Damages

The Florida legislature identified several issues of concern related to the transparency of damages in personal injury cases, including:

• The amount paid by the patient (or the health insurer) and accepted by the health care provider as full payment for medical services bears little resemblance to the amount charged on the initial invoice by the health care provider. If a jury is made aware of only the amount billed by health care providers, rather than the amount actually accepted in full satisfaction of the charges or the amount traditionally accepted by health care providers in a similar market, the jury may award an inflated amount of damages.
• The inflated amount billed may also cause the jury to perceive that plaintiff’s injuries are more severe than they are, which may in turn result in the inflation of other damages, such as pain and suffering or future medical costs.
• The Collateral Source Rule, as applied in Florida prior to the new law, required a court to reduce, post-verdict, the damages awarded to a plaintiff from all collateral sources, except where a subrogation or reimbursement right exists. However, a plaintiff may still introduce into evidence the full amount of their medical bills. In contrast, a defendant may be prohibited from introducing the amounts actually paid and accepted in full satisfaction of those bills.
• Patients and health care providers sometimes enter into a written agreement called a “letter of protection,” which is an agreement to defer collection on a medical bill until the plaintiff recovers in a lawsuit. Upon recovery from a lawsuit (either through settlement or jury verdict), the provider is then paid from the proceeds of the lawsuit. These letters of protection give a medical provider a financial interest in the outcome of the litigation.
• Yet, Florida courts have concluded that “the question of whether a plaintiff’s attorney referred him or her to a doctor for treatment is protected by the attorney client privilege.”

The new law establishes a more uniform process for the admissibility of evidence and the calculation of medical damages in personal injury or wrongful death actions by limiting the evidence admissible to prove the amount of damages for past or future medical care. Specifically, the new law does the following:

• Past Paid Medical Bills: Limits evidence of medical charges that have already been satisfied to the amount actually paid for the services, regardless of the source of such payment.
• Past Unpaid Medical Bills: Allows any evidence to prove damages that is otherwise admissible. The “usual and customary” amount of damages is determined as follows:
  • Claimant has insurance other than Medicare or Medicare: Evidence of the amount the coverage is obligated to pay the provider for satisfaction of the medical services rendered plus the claimant’s portion of medical expenses.
  • Claimant has insurance but opts to use a letter of protection: Evidence of the amount the health care coverage would pay under the contract plus the claimant’s portion of medical expenses had they obtained treatment pursuant to the health care coverage.
  • Claimant has Medicare or Medicaid or does not have insurance: 120% of the Medicare reimbursement rate in effect on the date the claimant incurred the medical services. If there is no applicable Medicare rate for the services in question, 170% of the applicable state Medicaid rate.
  • Claimant receives services under a letter of protection, and the bill is transferred to a third party: Evidence of the amount the third party agreed to pay the provider for the right to receive payment.
• Future Medical Bills: Provides that the “usual and customary” amount of damages is dependent on whether the claimant has health care coverage or is eligible for the same. “Usual and customary” is:
  • Claimant has insurance other than Medicare or Medicaid or is eligible for such insurance: Amount for which the future charges could be satisfied by the coverage plus the claimant’s portion of medical expenses under the contract.
  • Claimant has Medicare or Medicaid or does not have insurance: 120% of the Medicare reimbursement in effect at the time of the trial for such future services. If there is no applicable Medicare rate for the future services, 170% of the applicable state Medicaid rate.

The new law protects from disclosure individual contracts between providers and authorized commercial insurers or authorized health maintenance organizations; such contracts are not subject to discovery or disclosure and are not admissible into evidence.

Under the new law, if a letter of protection is used, a claimant must provide the letter; copies of billings rendered for the medical expenses; the name of the third party and dollar amount for which the provider sells the accounts receivable to a third party; whether the claimant had health care coverage at the time of treatment; and whether the claimant was referred for treatment under a letter of protection and, if so, the identity of the person who made the referral. If the claimant’s attorney makes a referral for medical treatment under a letter of protection, a disclosure of the referral is permitted and evidence of the referral is allowed, notwithstanding the attorney-client privilege. In this situation, the financial relationship between a law firm and a medical provider is relevant to whether a testifying medical provider is biased.

Finally, the new law prohibits damages from including any inflated amounts in excess of the evidence that may be admitted under the bill. The bill specifically prohibits an award of damages from exceeding (1) the amount actually paid by or on behalf of the claimant to the provider, (2) the amount necessary to satisfy charges for medical services that are owed or not yet satisfied at the time of trial, and (3) the amount necessary to provide for any reasonable and future medical treatment.

Florida courts will undoubtedly see many challenges to the new law over the next few years. But the rush to the courthouse by the plaintiffs’ bar suggests that the new law should limit the overall tort liability confronted by all types of companies and individuals who find themselves facing a lawsuit in Florida.