Guest Op-Ed by Jim Kallinger
For over a couple of decades, Florida was listed on the annual “Judicial Hellholes” report produced by the American Tort Reform Association. But little by little, under the leadership of Gov. Ron DeSantis, that began to change. In the spring legislative session of 2023, the Florida legislature finally pulled together a significant lawsuit reform package, and now, our state is no longer listed as a judicial hellhole.
However, we are still a state on the watchlist, and that is not good. It is also disappointing that we were not able to take the next steps in the 2024 legislative session to address the third-party lawsuit financing issue and medical malpractice. If we had, we might very well have been removed from the watchlist.
Third-party financing of a lawsuit sounds like a good idea, with the argument being that it gives some people without the ability to pay for their own expenses during a lawsuit recovery period the opportunity to get a loan to keep a lawsuit going. The idea is that without the financing, an injured party might be too willing to take a much smaller settlement just to get some quick cash.
However, this potential benefit is being abused. Third party financiers will often keep lawsuits going even if the plaintiff wants to accept a settlement. Financiers can and have taken over decisions on the direction of the case, ignoring any consideration for the paintiff. Financiers can and have charged exorbitant interest rates to the point that even after victory, a plaintiff may receive little to nothing from a final settlement or award. Even more alarming is that financial third-party funds can and have been set up to receive funding from international investors, including foreign governments. Even the thought that international profiteers could be using our courts system to attack our small businessmen and women in Florida should be enough to question this system. Proposed legislation would have required disclosures to the judge and jury about third-party financing to the court. It is likely that juries would be far less generous with some of the frivolous claims for non-economic damages if they knew that the money would be going to a corporate investor instead of the injured party sitting in the courtroom. In some ways, the plaintiff would have already received his or her payout in the form of the loan or advance from the third party. Giving the third party a bonus for making the loan does not seem to make sense.
Another effort in the last legislative session that was not successful was to provide caps on awards for non-economic damages for medical malpractice. Non-economic damages don’t relate to actual damage but to claimed emotional damage. For instance, a botched minor surgery with a tiny amount of true economic damage may be simultaneously paired with a massive claim for emotional distress. In Florida, there have even been instances of parents collecting on pain and suffering for adult children and instances of adult children collecting on pain and suffering for the deaths of parents. The proposed legislation would not have eliminated all claims for non-economic damages, but it would provide for reasonable caps that would have installed more predictability to the system.
The legislature missed an opportunity. I would suggest that they need to come back in for a special session. We get the legal environment right, and Florida’s economy will never slow down.
