National tort reform is coming

The Wall Street Journal's editorial on Jan. 17, 2025, titled "A Tale of Two State Insurance Markets," condemned California and applauded Florida's approach to insurance market regulation. "Republicans headed off an insurance market death spiral caused by litigation abuse" and applauded Florida Governor Ron DeSantis for championing reforms in 2022 and 2023 that "have staunched the flood of frivolous lawsuits, stabilized the insurance market, and reduced the exposure" of Florida's largest insurer while curbing excessive litigation.

It is the same refrain heard from California tort reformers, which have vilified contingency fees and sought to restrict consumers' ability to challenge corporate wrongdoing by crippling access to legal representation.

Tort reform efforts in California

In 1988, Proposition 106 sought to cap contingency fees in personal injury cases at 25% of the first $50,000, 15% of the next $50,000, and 10% of amounts exceeding $100,000. Such low fees that plaintiff's lawyers would be driven out of business. Voters rejected the measure 53 to 47 percent.

In 1996, Proposition 202 proposed ending excessive litigation by capping contingency fees to 25% of the first $100,000 recovered, 15% for recoveries between $100,000 and $500,000, and 10% of any amount recovered over $500,000. It, too, failed, with 51.2% voting against it.

In 2014, California voters defeated Proposition 46, which sought to increase the state's cap on non-economic damages in medical malpractice lawsuits from $250,000 to over $1 million. The initiative was labeled a "lawyer's payday." Doctors, hospitals, and insurance companies spent over $57 million to defeat the measure with a 67% "No" vote.  

In 2021, an insurance lobby, the Civil Justice Association of California, drafted initiatives proposing a 20% cap on contingency fees. Although abandoned, the attempt underscores the relentless drive to restrict consumer rights under the guise of reform.

Florida's role in tort reform

Add to California's fervid tort reformers the animosity of President Donald Trump toward the state, coupled with a White House that has positioned Floridians to wield significant influence in shaping the incoming administration's policies and priorities. Leading the charge is Chief of Staff Susie Wiles, brings 25 years of experience in Florida's politics, alongside Florida Senator Marco Rubio as Secretary of State, former Florida Attorney General Pam Bondi as Attorney General, Representative Mike Waltz from Florida's 6th Congressional District as National Security Advisor, and former U.S. Representative Dave Weldon,  as Director of the CDC.

With Florida's substantial influence in the current administration, tort reform looms large on the federal horizon. Florida's recent legislative changes, enacted in 2022 and 2023, present a concerning blueprint for nationwide adoption, curbing access to the legal system by restricting attorney fees, altering comparative fault rules, and limiting lawsuits that hold insurance companies accountable.

Attorney's fees

Limitations on attorney's fees in line with Florida limits will be on the table.

• 33 1/3 % of any recovery up to $1 million before the filing of an answer.

•  40% of any recovery up to $1 million after the filing of an answer.

• 30% on recoveries between $1 million and $2 million.

• 20% of any recoveries above $2 million

•  If defendants admit liability but dispute damages fees are limited to 33 1/3 % of any recovery up to $1 million, 20% for recoveries $1 and $2 million, and 15% for recoveries over $2 million.

Comparative fault

Reforms are expected to change how comparative fault is applied. Under California's pure comparative fault, a plaintiff can collect damages in proportion to the defendant's fault. If a plaintiff is 51% at fault, the award is limited to 49% of the verdict. In Florida, there is no recovery if a plaintiff is more negligent than the defendant -51% percent comparative fault is a defense verdict.

Holding insurance companies accountable

Historically, Florida leveled the playing field between insureds and their insurance companies under a "one-way attorney's fee" provision that allowed policyholders to recover reasonable attorney's fees from insurers if they prevailed in litigation when insurance companies acted in bad faith in responding to valid claims.

In December 2022, Florida Legislature tort reformers repealed the one-way attorney's fee provision for residential and commercial property insurance policies and in 2023 extended the prohibition to motor vehicle physical damage coverage and personal injury protection (PIP) insurance. Under the new law, attorney's fees can only be awarded to the prevailing party when an insurer has denied coverage, and the insured is forced to secure a declaratory judgment to collect their insurance coverage.

Access to justice

Access to the best legal representation is a fundamental cornerstone of justice. Contingency fee arrangements allow people to hire skilled attorneys without paying upfront. Lawyers take on the risk of litigation, investing their time, expertise, and financial resources, with payment contingent upon a successful outcome. However, when artificial limits are placed on the fees lawyers can recover, it discourages skilled attorneys from taking on high-risk or complex cases.

Without access to top-tier legal representation, individuals face significant disadvantages against well-funded corporations, insurance companies, or government entities whose attorneys can charge without restraint. These defendants enjoy vast resources, experienced legal teams, and delay tactics to overwhelm plaintiffs.

Caping contingency fees harms those who lack the means to pay hourly legal fees. Wealthy individuals and corporations can still hire the best legal minds to represent their interests, creating an uneven playing field favoring justice for the privileged.

To address this inequity, the public must demand reforms that prioritize access to justice over arbitrary fee restrictions. Contingency fee arrangements are not a barrier to fairness but a vital mechanism ensuring everyone - regardless of wealth - can stand a chance in court.

The true measure of a justice system is not just in the laws it enforces but in its accessibility to those most in need. Removing barriers that prevent skilled attorneys from representing the public is a crucial step toward restoring faith in the legal system and ensuring that justice is not a privilege for the wealthy but a right for all.