Tort reform stands embroiled in a controversial debate that involves not only the law, but also business economics and ethical considerations. In recent years the legal landscape has changed, especially since COVID-19, and there is now a discernable bias against businesses and a movement to hold them extraordinarily accountable for alleged wrongdoings.
To level an equally imaginary and unrealistic playing field, many state legislatures have made it easier for plaintiffs to bring suit against businesses, and juries often stand ready and willing to award nuclear verdicts in the millions of dollars. This burgeoning trend raises significant questions about the balance between holding corporations accountable and fostering a conducive environment for economic growth.
The good news is that some states around the country are taking notice of the plight of the business community and the resulting costs being handed down to the consumer. This concern has led to significant tort reform in certain areas of the country. Below, we analyze some of the tort-reform efforts in states around the country throughout 2023.
FLORIDA
Florida enacted a number of significant reforms in 2023.
H.B. 837: Comprehensive Tort Reform. H.B. 837, significantly altered the framework of civil litigation in Florida. Specifically, it standardizes the evidentiary threshold necessary to prove damages for medical expenses in certain civil actions, requires certain disclosures with respect to claims for medical expenses for treatment rendered under letters of protection, reduces the statute of limitations for negligence actions, standardizes bad faith actions, and alters presumptions in certain negligent security matters.
In practice, this means Florida moved from a pure comparative negligence system to a modified comparative negligence system. Under the new modified comparative negligence system, anyone found to be at least 51% liable for an incident cannot seek reparation from the other party.
H.B. 837 also modifies the type of evidence that is admissible at trial to prove medical treatment and expenses, now limiting it to evidence of the amount actually paid. Evidence offered to prove the amount necessary to satisfy unpaid charges will be limited to the amount the health care provider is obligated to pay should the claimant have health care coverage other than Medicare or Medicaid.
Additionally, H.B. 837 decreases the statute of limitations from four years from the time of the incident to file to two years. Finally, the bill modifies Florida’s bad faith law and mandates that negligence alone is insufficient to constitute bad faith in both statutory and common-law actions.
H.B. 1205: Legal Advertising. This bill took effect on July 1, 2023 and prohibits legal service ads from using medical alerts, health alerts, drug alerts, or public service announcements as the focus of the ad. The law’s purpose is to protect consumers from being misled to believe that the law firm is working directly with government entities or medical providers.
S.B. 1002: Assignment of Benefits/Auto Glass Repair. In an effort to curb fraud, this reform prohibits repair shops from offering incentives to customers in exchange for making insurance claims for motor vehicle glass repair, and restricts the assignment of post-loss benefits from such repairs. This bill was passed to address the skyrocketing number of cases involving suspicious auto glass claims submitted to insurance companies in Florida.
GEORGIA
Many bills were considered in Georgia, but, of the below, only one, H.B. 543, made it across the finish line and was signed into law.
H.B. 530: The APEX Doctrine. Adopts the APEX Doctrine, which generally limits the number of depositions that high-ranking corporate officials are required to participate in. When these officials are asked for information pursuant to discovery efforts, the court may protect a person or party when the request may result in “annoyance, embarrassment, oppression, undue burden or expense.” This protection not only includes limiting or denying certain discovery requests, but also protecting the confidentiality of the information sought.
H.B. 271: Direct Action Claims. Eliminates direct-action claims against motor carrier insurers.
H.B. 275: Discovery. This bill puts additional limitations on certain types of discovery in civil cases. These limitations include:
- Discovery of drivers’ safety performance history limited to certain federal requirements.
- GPS data may only be gathered from date of incident.
H.B. 543: 12-Person Jury. In order to have a 12-person jury for civil actions in Georgia now, the demand must be at least $50,000. Previously, the amount was $25,000.
S.B. 2: COVID Immunity for Businesses. Extends immunity from COVID-19 liability pursuant to the Georgia COVID-19 Pandemic Business and Safety Act indefinitely so long as the business did not act with gross negligence.
S.B. 186: Georgia Landowners Protection Act. Landowners will no longer be liable for constructive notice. They must have actual notice of third-party criminal acts on their property to be liable for any damages that occur arising out of that activity.
S.B. 196: Seatbelts. Makes evidence of failure to wear a seatbelt admissible evidence of negligence in civil cases.
S.B. 203: Trucking Opportunity Act of 2023. Prohibits direct-action claims against insurers of motor carriers in tort and contract cases. Additionally, truck drivers are now presumed to be qualified to operate a commercial vehicle if they obtained their commercial driver’s license according to federal standards. It also changes some of the rules for truckers driving intrastate commerce and allows them to:
- Drive for 12 hours if they have not been on duty for more than 16 hours.
- Provide 70 hours of service in seven days or 80 hours of service in eight days.
Around the States
Elsewhere throughout the nation, enacted tort reform legislation in 2023 includes:
INDIANA
H.B. 1124: CPAP. Addresses Civil Proceeding Advance Payment (CPAP). Now, the consumer claimant must provide all other parties and insurers of the parties written notice that they have entered into a CPAP contract with a CPAP provider. The terms of this contract will also be obtainable through discovery.
IOWA
H.F. 161: Medical Liability Reform. Places limits on noneconomic damages, effectively adjusting the caps based on the seriousness of injury.
S.F. 228: Trucking Litigation Reform. Places a $5 million limit on noneconomic damages per plaintiff in commercial trucking cases. The law also establishes safeguards against employers for negligent hiring claims in the trucking arena.
KANSAS
S.B. 75: Prejudgment Interest Rates. Provides for legal interest rates for civil tort actions with awarded prejudgment interest, based on the federal discount rate plus 2%.
MONTANA
S.B 216: Products Liability Reform. Allows for comparative fault defenses, certain limitations on claims involving defective products, and immunity via statute for businesses that can prove they complied with all required safety regulations.
S.B. 165: Bad Faith. This law reforms the state’s third-party bad faith provisions to prohibit third-party claimants from bringing bad faith claims against insurers. Fraud claims against insurers are still permitted.
S.B. 236: Time-Limited Demands. Third-party claimants pursuing time-limited demands against insurers must provide all supporting documents and relevant information to the insurer so that a fair amount of time is given to investigate and respond to the claim. Unfair settlement practice or bad faith claims may not be filed if this requirement is not first satisfied.
S.B. 269: Third Party Litigation Funding. Brings transparency to third party litigation funding (TPLF) by requiring the disclosure of all TPLF agreements in civil actions. It also requires registration of financing companies, and disclosure of all officers involved.
TEXAS
H.B. 1745: Vicarious Liability in the Rideshare Industry. Significantly limits the availability of vicarious liability claims against rideshare businesses and puts in place additional conditions in order to seek damages arising from rideshare claims.
UTAH
H.B. 328: Asbestos. Requires stricter disclosure requirements for plaintiffs in asbestos cases.
WEST VIRGINIA
H.B. 3270: Deliberate Intent Cases. Stipulates that $500,000 is now the cap for noneconomic damages in deliberate intent cases.
What’s Ahead for 2024?
With the ever-looming threat of nuclear verdicts, especially in Judicial Hellholes around the country, the need for tort reform is more evident than ever. The appetite to hit businesses with lawsuits that are highly inflated due to the lack of substantive reform to prevent frivolous lawsuits continues to run rampant across the country.
As discussed above, a few jurisdictions have begun to take notice. Hopefully, others will follow. One to watch is Georgia, where the legislature is set to consider significant reform. Although tort reforms in the state have been attempted in the past, they have always failed to make it to the finish line. Many have called out the skyrocketing auto and medical malpractice insurance premiums as proof that something needs to give. In fact, Georgia was named as the number-one Judicial Hellhole for the last two years in a row by the American Tort Reform Foundation.
Despite positive tort reform in a few states, the vast majority of the nation is still threatened by the potential for excessive damage awards by the courts and increased liability by laws passed in the legislature. In addition, changing juror attitudes along with social inflation have only made the danger of taking a case to trial riskier. With almost no discussion of tort reform on the federal level, states are left to toil, and many are moving in the opposite direction and imposing laws allowing greater flexibility to potential claimants and opening the floodgates to mega verdicts.