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Home / Insurance / Triple-I Blog | Abuse of Florida and the justice system was highlighted at JIF 2022

Triple-I Blog | Abuse of Florida and the justice system was highlighted at JIF 2022



By Max Dorfman, Research Writer, Triple-I

Florida took center stage at JIF 2022, as a group of panelists discussed growing courtroom costs and the rise in abuse of the justice system.

“The abuse of the justice system is a combination of factors, including social inflation, nuclear verdicts, third-party litigation funding, the rollback of tort reform, cost-shifting systems, and lawyer advertising,” began Ronna Ruppelt, CEO of CLM & Claims Pages, who served as moderator.

Ruppelt added, “Florida is the poster child for abuse of the justice system.”

The panel analyzed the general landscape of these issues and how Florida became the epicenter of many of these issues.

They noted that in Florida, roof and windshield claims are part of this cottage industry, driven by the recovery of plaintiff fees more than the subject of the lawsuit itself. Roofing costs have increased dramatically over the past three years as well. This is not primarily driven by disasters.

“In 2021, Florida had 116,000 property insurance claims,” ​​Ruppelt said. “The state is on pace for about 130,000 by 2022.”

Most states have only a few hundred. California, the most populous state in the US, had just 3,500 homeowner insurance claims in 2021.

“The numbers highlighted are staggering,” said Fred Karlinsky, shareholder and global co-chairman of Greenberg Traurig, LLP. “It has been recognized at the highest levels of state government.”

With the recent gubernatorial election in Florida, this problem has only become more visible. Incumbent Ron DeSantis and his challenger (and former Florida governor) Charlie Crist discussed roof replacement costs, as well as home insurance litigation.

“It could be a $10,000 judgment, but millions of dollars in fees,” Karlinsky said.

In fact, the property insurance market has become similar to health care, with assignment of benefits (AOB) – where an insured assigns their benefits to the doctor – who are paid by the insurance companies. AOBs use unscrupulous contractors who come in before the insurance companies and “turn your home into a disaster zone.”

“The insurers have no way of knowing what the damage was, and now they have to fight these claims,” ​​Karlinsky added, noting that once the insurer enters the court system, it often results in nuclear verdicts.

“Florida is more difficult for adjusters,” said Joseph Blanco, CEO of Crawford & Company. “When we showed up for Hurricane Irma, there were signs everywhere saying don’t trust adjusters.”

Attacking adjusters’ credibility, Blanco said, makes it very difficult for insurance companies. This only raises unrealistic expectations for claims, making it more challenging to resolve pretrial litigation.

Although the panel recognized that this type of legal abuse began in the 1980s and experienced upward trends in the 1990s and early 2000s, there were calls at the time for nationwide tort reform. But the lawyers involved in these processes have become more sophisticated, making confronting this issue even more challenging.

“The lawyers involved identify a theory of liability, find litigation funders, create ads, and then they go forum shopping,” said Harold H. Kim, president of the Institute for Legal Reform and general counsel and vice president of the American Chamber of Commerce. “They’re rolling the dice to see if they can achieve a settlement or a nuclear verdict, which changes the value of negotiations.”

“It’s so pernicious that the business community is in the crosshairs,” Kim added. “The stability of the rule of law and the ability to run a business is a critical challenge.”

The panelists agreed that the problems surrounding legal abuse are only becoming more significant.

“What we’ve seen is the use of plaintiffs’ attorneys moving from Florida to you,” Karlinsky said. “The AOBs and capping phenomena are not just going to be in the big states. We’re seeing them everywhere. The plaintiff’s bar doesn’t have the same restrictions as the insurance industry.”

“What happens in Florida doesn’t stay in Florida,” Kim concluded.


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