House panel votes down bad-faith bill

Jan 26, 2012

The following article was published in The Florida Current on January 26, 2012:

House panel votes down bad faith bill

By Travis Pillow

Plaintiffs’ lawyers eked out a narrow victory over insurance groups on Thursday, as a House committee narrowly defeated a measure intended to curb “bad-faith” lawsuits against insurers.

House Bill 427 was voted down 7-8 by the House Civil Justice Subcommittee.

Bad-faith lawsuits arise when policy holders allege that insurance companies fail to settle claims, exposing them to potentially large losses. Supporters of the bill said policy holders and their attorneys can sometimes engage in “trickery” to bait insurance companies into bad-faith cases.

The bill would require parties to give insurers 60 days notice before bringing a third-party bad faith claim, and allow insurers to resolve the disputes before they go to court.

Rep. Matt Gaetz, R-Shalimar, was among the Republicans who joined the panel’s Democrats voting against the plan. He said supporters had not shown convincing cases of insurers getting unjustly baited into successful bad-faith lawsuits, and suggested they “go back to the law library” to come up with better evidence.

Supporters, including Rep. Larry Metz, R-Eustis, said one reason they couldn’t point to more cases is that companies will often settle to keep a bad-faith case from going to trial. Gaetz suggested there may be another way to address the underlying problems faced by insurance companies, such as increasing their ability to transfer cases to more favorable federal courts.

The bill is not officially dead because Gaetz moved to retain it. He had attempted to postpone the vote, but a combination of supporters and opponents defeated his motion.

The committee could take it up the at next week’s meeting, but the measure would still be a long shot. It has not yet been heard in the Senate.

“We live to fight another day,” said sponsor Kathleen Passidomo, R-Naples.

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