The Impact of Florida Tort Reform on Pip Lawsuits

Provided By Christopher M. Tuccitto, Esq.

The “Tort Reform” ushered in by the passage of House Bill 837 (HB 837) on March 24, 2023, marked a significant shift in Florida tort law, particularly in the realm of Personal Injury Protection (PIP) lawsuits. Among the most impactful changes introduced by the bill was the elimination of one-way attorney’s fees for plaintiffs, a provision that had long been a cornerstone of Florida’s PIP litigation framework. The removal of this benefit has altered the strategies of personal injury attorneys, medical providers, and insurance companies, reshaping the way PIP claims are handled and litigated.

Before HB 837, Florida’s one-way attorney’s fee provision allowed plaintiffs who prevailed in PIP lawsuits to recover their legal fees from the defendant insurance companies. This provision, governed by Florida Statutes §627.428, incentivized attorneys to take on PIP claims since they could litigate cases without worrying about their clients’ ability to pay. The law was designed to level the playing field, ensuring that individuals and medical providers had access to legal recourse against insurance companies that underpaid or denied legitimate claims. However, insurance companies and lawmakers argued that the one-way attorney’s fee rule contributed to excessive litigation and inflated claims. HB 837’s enactment removed this provision, fundamentally changing the dynamics of PIP lawsuits.

With the elimination of one-way attorney’s fees, plaintiffs, including medical providers pursuing unpaid claims, must now shoulder the cost of their own legal representation, regardless of whether they win or lose. This creates significant challenges as many claimants are unable to afford legal fees, discouraging them from pursuing litigation. Smaller medical practices that previously relied on PIP lawsuits to recover unpaid bills are now struggling to take legal action against insurers. In addition, attorneys have become extremely selective in the PIP cases they accept, focusing only on those with high-value claims and clear-cut liability. Previously, insurers faced strong financial incentives to settle PIP claims quickly to avoid paying the plaintiff’s attorney’s fees. Without this pressure, insurers are now more inclined to delay or deny claims, knowing that claimants now bear the full cost of litigation. Disputes over medical bills and coverage are taking longer (if ever) to resolve, leading to increased financial strain on healthcare providers. In addition, policyholders injured in car accidents are finding it more difficult to obtain fair compensation for their medical expenses.

Without the safety net of one-way attorney’s fees, Florida has seen a sharp decline in PIP lawsuits. This has had several ramifications. Fewer legal challenges have emboldened insurers to take a stricter approach to claims processing. The volume of PIP-related court cases has decreased precipitously, limiting claimants’ ability to fight unfair denials. While the overall cost of PIP litigation declined, it has come at the expense of injured parties and medical providers who lack the resources to litigate.

The elimination of one-way attorney’s fees under HB 837 has dramatically altered Florida’s PIP litigation landscape, shifting financial risks onto plaintiffs and reducing the pressure on insurers to settle claims expediently. While this change was intended to curb excessive litigation, it also presents new challenges for injured parties, medical providers, PIP attorneys, and personal injury attorneys. Stakeholders must adopt proactive strategies, from improving documentation to strengthening negotiations with insurers. Understanding these shifts is essential for ensuring fair outcomes for those affected by motor vehicle accidents in Florida.

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