Florida’s legal system reforms, aimed at curbing frivolous lawsuits and unfair liability divisions, are showing early signs of success, according to a recent study from the U.S. Chamber of Commerce Institute for Legal Reform.

The historic reform legislation passed in 2022 and 2023 has led to insurance carriers expanding their business in Florida, and homeowner insurance rates are either stabilizing or decreasing.

Key reforms passed by state lawmakers include:

• Florida Senate Bill 2A (2022): Eliminated one-way attorney fees and assignment of benefits for property insurance claims.
• Florida HB 1205 (2023): Prohibits misleading legal service ads and the misuse of consumer health information for legal services.
• Florida Supreme Court (2024): Requires discovery to be proportional to case needs.
• Florida HB 837 (2023):
  • Adopts modified comparative fault.
  • Limits plaintiff recovery over 50% fault.
  • Protects multi-family owners from third-party crime liability.
  • Restricts bad faith insurance claims.
  • Limits medical damages to actual payments with required disclosures.

Florida reforms in 2022 have also addressed the issue of fraudulent assignment of benefits (AOB) claims. A recent court ruling upheld Senate Bill 2A, confirming that a “direction to pay” (DTP) is not an AOB and third parties lack standing to sue insurers without a valid AOB.

Despite facing opposition from the well-funded billboard trial lobby, the reforms have led to a reduction in property insurance lawsuits and stabilized rates. However, the problem of opportunistic trial attorneys driving up frivolous lawsuits for profit persists, emphasizing the need for insurers and businesses to adapt their risk management strategies in 2025.

Looking ahead, Florida lawmakers in 2025 are expected to reintroduce a bill requiring more transparency for third-party litigation funding (TPLF) during the 2025 legislative session, according to the Florida Chamber of Commerce. This is seen as another crucial step in the reform of Florida’s legal system.

“Legislative reforms have vastly improved Florida’s property insurance market. Any efforts to roll back the reforms previously passed would have a negative impact on the market’s continued path toward stability,” said Mark Friedlander, Triple-I’s Florida-based director of corporate communications.

The reforms have led to a significant drop in property claims lawsuits, better loss ratios for insurers, a manageable hurricane season, billions in new capital, and a projected reduction in reinsurance prices for 2025 following flattened rates in 2024. These developments underscore the effectiveness of the reforms and the potential for further improvement in the insurance market.

For a deeper understanding of the implications of TPLF and the ongoing legislative efforts, we invite you to explore Triple-I’s comprehensive TPLF white paper and visit our legal system abuse knowledge hub. You can also check out our new StopLegalSystemAbuse.org microsite.