Senate panel holds ‘oral arguments’ on whether to change bad faith laws

Feb 22, 2011

The following article was published in The Current on February 22, 2011:

Senate panel holds “oral arguments” on whether to change bad faith laws.

By Christine Jordan Sexton

The Senate Judiciary Committee on Tuesday took two hours of what Sen. Anitere Flores, R-Miami, and chair of the panel described as “oral arguments.”

On one side of the argument were the insurance company and business lobbyists pushing for reforms to “bad faith” lawsuits and on the other was the state’s trial  lawyer group, the Florida Justice Association. “Bad faith” lawsuits are filed against insurers that claim the company failed to financially protect policyholders and did not promptly settle liability claims.

The committee does not have a bill before it but Flores said bills would be filed — most likely by members of the committee — before the bill deadline. Gov. Rick Scott support reforms to Florida’s “bad faith” laws. During the campaign Scott promised to reform the bad faith law to provide “well-defined guidelines for insurers that will help eliminate some of the factors responsible for higher insurance costs.”

The insurance companies and business groups would like to see the bad faith laws change to limit suits after a set time.The groups are proposing the time frame be set at 90 days from notice of a claim or 60 days from notice of a written offer to settle a claim.

Lobbyist George Meros, representing the U.S. Chamber Institute for Legal Reform, said the reforms were needed because the Florida Supreme Court in rulings has “created silly rules.” Where there are silly rules, Meros testified, “there will be silly games.”

“What we are asking of this Legislature is to bring common sense and equity to an area of the law that has gone very, very bad,” said Meros. “And it has gone bad in a way where artifice and gotchas trump quick fair settlements of costly lawsuits.”

Meros said the current system allows insurers to “twist in the wind for many, many years.”

But those representing trial attorneys contend that the current law is fair to both insurers and consumers. They argue that Florida businesses will have increased risks if insurers are allowed to “shirk their responsibilities.”

Former Florida Supreme Court Justice Charlie Wells joined Meros in expressing his concerns with bad faith.

“I believe that it goes directly to the heart and health of the economy of this state,” Wells said of the bad faith statutes, noting that most people of the state have some type of insurance policy and are impacted by this.  “It’s in our interest we have laws governing insurance that make sense and that provide that we are going to have insurance at level of cost that is affordable and necessary.”

Meanwhile, a group calling itself Floridians for Fair Insurance Coalition has formed and launched a website asking Floridians to share their litigation stories at The group has hired public relations firm Capitol Energy and sent out a press release announcing as its members Associated Industries of Florida, the Florida Chamber  of Commerce, the Florida Justice Reform Institute and the US Chamber of Commerce Institute for Legal Reform.