Guide to HB 837 and the Impact of Florida’s New Tort Reform Law

The Florida Tort Reform Bill of 2023, also known as HB 837, was signed into law by Governor Ron DeSantis on March 24, 2023. This legislation has significantly altered the landscape of personal injury claims in Florida. In this guide, we’ll review the impacts on insurers, lawyers, and property owners.

Florida House Bill 837: A Summary

Florida House Bill 837 aims to reform the state’s tort laws to protect businesses from excessive lawsuits and stabilize the insurance market. Generally speaking, it accomplishes this by creating an environment that encourages fewer frivolous lawsuits, more frequent settlements, and stricter controls on excessive damages. 

The changes went into effect as soon as the bill was signed on March 24, 2023, and will apply to all cases where the cause for the claim occurred after that effective date.

Legal Changes and What to Expect

Shorter Statute of Limitations

HB 837 reduces the general statute of limitations for personal injury claims in Florida from four years to two years, adding Florida to the group of 44 other states with statutes of limitations under four years.

This change may impact victims of catastrophic injuries, as it may take longer than two years to understand the extent of their injuries. However, this new timeline also encourages plaintiffs to file suit earlier, increasing the ability to obtain evidence closer to the time of the incident and leading to earlier resolution of claims.

Shift to Modified Comparative Negligence

HB 837 shifts Florida from a pure comparative negligence system to a modified comparative negligence system—except for cases of medical negligence. The change aligns Florida with over 30 states following the modified comparative standard. 

Through the old pure comparative negligence system, the person suing (the plaintiff) could recover damages even if they were 99% at fault, with the damages amount reduced by their percentage of fault. With the new modified comparative negligence system, the recovery amount still reduces based on a percentage of fault, but the plaintiff can only recover if they’re less than 50% at fault. 

This shift favors defendants with a greater chance that damages won’t be awarded. It also motivates plaintiffs to settle to ensure at least some portion of damages, though defendants will have more leverage in settlement amounts.

Even so, some research suggests that the shift won’t be as bad for plaintiffs as many think. According to a study of thousands of cases, juries found the plaintiff: 

  • 0–25% negligent with near identical frequency in the two systems
  • 26–50% negligent more frequently in modified systems
  • 51–100% negligent more frequently in pure systems

Juries likely feel uncomfortable halting a plaintiff’s recovery entirely when the defendant is partially at fault. So, defendants should not rely solely on the modified system to come to their rescue.

Changes to Bad Faith Claims Against Insurers

Historically, ‘bad faith traps’ have been used against insurers to create a bad faith claim and increase damages. HB 837 changes how bad faith claims are handled to protect insurers from such practices.

Good Faith of the Insured: Cases can now account for the good faith of the insured, claimant, and their representative and may reduce the damages awarded accordingly. Some lawyers are concerned that this will encourage insurers to go after the conduct and mistakes of the victim or their lawyer. 

Limits to Bad Faith Lawsuits: HB 837 Section 624.155 adds that a bad faith action cannot be brought against an insurer if, within 90 days, they pay either the policy limits or the claim amount demanded with ‘sufficient evidence’ of the claim. HB 837 also confirms that just being negligent or not offering to pay isn’t enough to establish bad faith.

Multiple Claims From an Event: If there are several claims from one event that total more than the policy limits, the insurer doesn’t have to pay more than the policy limit if, within 90 days, they file an interpleader or make the entire policy limits available to the claimants through binding arbitration.

Insurers are likely to experience far fewer lawsuits due to these changes.

Offers of Judgment Expansion

Florida Statute 624.1552 says that Florida law 768.79 on “offers of judgment” now applies to every lawsuit involving an insurance contract. Essentially, the defendant can recover its reasonable costs and attorney’s fees if it makes a settlement offer that the plaintiff doesn’t accept within 30 days, and the court later finds the defendant non-liable or the amount awarded to the plaintiff is 25% less than the original offer. 

Changes to Attorney Fee Awards

Attorneys may be unhappy with the shift in law regarding attorney fee awards. The two shifts pertain to contingency multipliers and one-way fees. 

Contingency Multipliers: Contingency multipliers are extra fees applied to cases where attorneys are only paid if they win. They are meant to encourage attorneys to take on cases where clients can’t afford to pay upfront. Florida House Bill 837 eliminates multipliers and limits attorney fees to a reasonable hourly rate, unless there are exceptional circumstances. 

One-Way Fees: One-way fees are when a plaintiff wins a lawsuit against an insurer and the insurer has to pay for their legal fees. One-way fees are now only available in cases where the insurer has to cover a claim after having denied it. This does not apply to residential or commercial property policies, and a reservation of rights from an insurer does not count as coverage denial. 

Going forward, the restrictions on one-way and contingency fees will make finding attorneys willing to take on certain cases harder, reducing lawsuits altogether. On the bright side, if successful, the bill will result in lower insurance costs by lowering how much insurers owe.

New Standards for Determining Medical Damages

HB 837 also creates stricter rules for determining medical damages. Now, to prove the total amount owed in damages for past or future medical treatment in a personal injury or wrongful death claim, evidence is limited to the amount actually paid, regardless of source of payment. The specifics of the evidence required depend on whether they have Medicare, Medicaid, other health coverage, or no health coverage. 

Another change involves Letters of Protection (the agreement between an attorney and a doctor for the doctor to provide treatment without receiving payment until a lawsuit is complete). Letters of Protection are no longer protected by attorney-client privilege and must be disclosed, along with any financial relationship between the attorney and doctor.

Presumption Against Liability for Property Owners

There are two key changes to Florida tort law that have a significant impact on the multifamily industry. If taken advantage of properly, multifamily property owners can now reduce their liability risk by implementing specific crime prevention measures. 

The new law defines a multifamily residential property as “a residential building, or group of residential buildings, such as apartments, townhouses, or condominiums, consisting of at least five dwelling units on a particular parcel.”

Criminal Fault: Before Florida Bill 837, owners or operators of multifamily properties were held liable for the results of criminal acts on the property, even if they had reasonable security measures. Now, negligent security cases must also account for the criminal’s fault.

Presumption Against Liability: HB 837 also provides a presumption against liability for multifamily residential properties if, by January 1, 2025, they provide crime and safety training to their employees and pass a CPTED assessment that includes the following security measures:

  • A security camera system at points of entry and exit that meets HB 837 requirements.
  • A lighted parking lot illuminated at specific intensity requirements from dusk until dawn.
  • Lighting in walkways, laundry rooms, common areas, and porches from dusk until dawn.
  • A 1-inch deadbolt in each dwelling unit door.
  • A lock on each window, exterior sliding door, and any other door not for community purposes.
  • Locked gates with key or fob access along pool fence areas.
  • A peephole on each dwelling unit door without a window or a window next to the door.

Some have raised concerns that this law will discourage property owners from implementing adequate security measures, but to meet HB 837 compliance and have protection against liability, property owners have to meet security standards, including a CPTED assessment. 

Challenges to the New Tort Reform Legislation Are Unlikely to Hold Up

House Bill 837 may face challenges on grounds of substantive due process and access to courts, but these are unlikely to be successful. 

Regarding due process, the changes within HB 837 either eliminate or modify rights created under the Florida Statute. As such, they are not part of the Florida constitution and are not considered fundamental rights that can be challenged through substantive due process. Someone might claim that the shortened statute of limitations infringes on a fundamental right, but The Supreme Court has previously ruled that legislation shortening the time to file suit is allowed.

The Florida Constitution says everyone should have access to the courts, but nothing in HB 837 unfairly limits access. For example, the right to sue for bad faith existed in common law before the Florida Constitution, but HB 837 doesn’t remove this right. It only sets new limits on bad faith claims. 

Someone might also argue that the presumption against liability for multifamily property owners hinders access to the court. However, people can still sue if they provide evidence to overcome this presumption. As such, it’s crucial for multifamily property owners to meet the requirements in HB 837.

HB 837 Compliance

All of the tort reform laws in HB 837 require awareness, but the new law for a presumption against liability for multifamily property owners requires action to meet compliance requirements. As a security consulting firm, we offer CPTED assessments that provide documented evidence of HB 837 compliance. We work with property owners—as well as lawyers and insurance providers with property clients—to meet the necessary security standards and reduce the risk of crime and liability. 

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