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March 15, 2013
House eyes changes to tort laws

By Gary Blankenship
Senior Editor

Efforts to limit health care reimbursements for personal injury plaintiffs, to change the evidence code standard for evaluating expert witnesses, and to make it harder to sue insurance companies for bad faith are being considered or moving forward in the Florida Legislature.

Tom Lee The Senate Judiciary Committee held a workshop on the three topics on February 19. In the lower chamber, the House Civil Justice Subcommittee has passed bills to change Florida’s Frye standard for evaluating expert witnesses to the Daubert standard and to control medical payments in personal injury cases.

After hearing from two opposing panels on the tort issues, Senate Judiciary Committee Chair Tom Lee, R-Brandon, said it was unlikely that the committee would propose legislation on its own.

But he added that several senators have introduced individual bills on the subject.

Lee said he would meet with Senate leadership “and developing a strategy on just what, if any, tort legislation this committee is going to deal with and what form were going to deal with it.

“There’s a wide disparity of views on this subject and there is no agreement on how to thread this needle. But we’re going to be looking for ways to develop some legislation that would thread this needle and make for a better system.”

Lee noted that in his experience most such disputes in dealing with cases “are about who has leverage. . . . While everyone talks about a level playing field, I have yet to see one . . . . We’re going to work toward that end.”

During the committee’s hearing, critics of the current tort laws argued that Floridians pay a “litigation tax” of $2.8 billion annually from unnecessary lawsuits, which hurts the economy. The federal courts, they noted, use the Daubert standard, and most states have switched to it from Frye.

George Meros, representing the U.S. Chamber of Commerce, said the states’ bad faith insurance laws encourage lawyers to “game” the system so they can avoid a $50,000 policy limit and win a $5-or-$10- million award.

“There are no objective guidelines on how to determine whether an insurer is in good faith or bad faith; that must change,” he said. “The fix is simple: Both sides play by the same rules, and there is an extremely clear, limited period of time during which an insurer must investigate a claim.”

Mike Mitchell, head of government relations for Publix Supermarkets, said frequently defendants in tort cases wind up paying several times what the actual medical costs are for the plaintiff. The problem, he said, is with the letters of protection plaintiffs’ attorneys issue to doctors and health care facilities on behalf of their clients. Those promise to pay providers from the plaintiff’s awards once the case is decided or settled.

However, once the case is over, attorneys frequently negotiate a reduced payment for medical care, and defendants pocket the difference. One study of 174 cases showed that the amounts billed exceeded the amounts paid by an average of 88 percent, Mitchell said.

“Defendants have paid two, three, and four times what the actual medical costs are,” he added. “The defendant should pay the actual cost to make the victim whole.”

Juries also often based other parts of a damage award on what the medical costs are thought to be. Basing awards on the amount billed instead of the amount paid can artificially inflate those awards, he said.

Defenders of the current laws said changes would be harmful and perhaps chaotic. Fourteenth Circuit State Attorney Glenn Hess, also a former circuit judge, said it’s much easier to qualify expert witnesses under Frye than Daubert, with the latter perhaps requiring a separate hearing for each expert.

He noted in a recent murder case his office handled, there were 16 experts witnesses and “to have a separate Daubert hearing for each one of those would have made the case unmanageable.” At the same time, criminal defense attorneys, mindful of ineffective assistance of counsel claims and possible resulting Bar grievances, would be reluctant to counter a client who demanded Daubert hearings for all expert witnesses, Hess said.

Other witnesses said only a few states have adopted an absolute Daubert expert standard and most have either Frye or a combination of Daubert and Frye standards, and changing to a pure Daubert standard would raise litigation costs and limit access to the courts.

Businesses are the ones hurt when insurance companies balk at paying claims, they said, because businesses can be left with the bill for the unpaid claim and for other damages relating to the unpaid claim.

Jacksonville attorney Matthew Posgay told the committee that letters of protection are the only option many uninsured plaintiffs have to get necessary health care and that many health care providers won’t accept such letters, limiting options for those patients. Charges may be higher, he said, because there is delay and uncertainty about the payment.

While the Senate Judiciary Committee had no bills before it, that wasn’t the case before the House Civil Justice Subcommittee when it passed CS/HB 587 on February 20 on health care costs. A week earlier, it passed a bill to replace Frye with Daubert in Florida’s evidence code.

CS/HB 587 would limit compensation in personal injury and wrongful death cases for health claims to services that are determined to be medically necessary and would limit amounts to those typically charged for those services in that locale. If a bill was paid before the trial or settlement, then the amount recoverable in the suit would be limited to that amount, regardless of the amount billed. As this News went to press, the bill had no counterpart in the Senate.

Proponents argued the bill would help fairly control high medical costs, while opponents said it would make health care providers hesitant to work under letters of protection. The bill passed on a party line vote, but some proponents said they still have reservations.

“I understand the policy interest in creating and encouraging a system that will not allow inflated damages to be presented, but I also think there is another policy issue, and that is the policy on the third party’s right to contract,” said Rep. Ross Spano, R-Riverview. “The physician has provided a service for a particular rate and the state is voiding that contract and dictating how much will be paid. I am extremely uncomfortable with that. In my mind, I’m trying to balance those two interests.”

He added he was concerned about limited access to health care, but believed that also could be addressed.

Rep. Cynthia Stafford, D-Opa Locka, said the bill would increase litigation in order to determine the medical costs.

Rep. José Rodríguez, D-Miami, said it would limit access to health care without addressing the problem of health care providers who overbill in such cases. He also said “that this is, in effect, a rate cut on our physicians.”

However, Rep. Bill Hager, R-Boca Raton, noted the bill was supported by both the Florida Medical Association and the Florida Osteopathic Medical Association.

Like HB 587, the proposed committee bill, now HB 7015, that would switch Florida from the Frye standard for expert witnesses to the Daubert standard passed by a party line, 8-4 vote.

Last year, the House passed a bill imposing a “strict” Daubert standard, while the Senate passed a bill imposing a “modified” Daubert standard, and both bills died when the two chambers failed to reach any agreement.

“The issue has to do with expert testimony and what the standards should be when that testimony is proffered by a party in a case,” said Rep. Larry Metz, R-Groveland, chair of the House subcommittee, who presented the bill.

He said the Frye standard came from a more than 90-year-old federal court ruling, while Daubert is based on a 20-year-old U.S. Supreme Court ruling and subsequent related opinions.

Daubert puts the judge in the role of gatekeeper, while previously Frye didn’t have such an active role,” Metz explained.

“Judges enforce the standards to make sure junk science wasn’t going in front of the jury. The essence of it is you would have a thorough vetting.”

Arguments at the House panel anticipated the testimony at the Senate Judiciary Committee.

Proponents said that Daubert would prevent the use of junk science and unverified opinion testimony in cases and lead to a better result.

The result would be a more business-friendly legal climate in Florida, which would be good for jobs, they said.

Opponents said Daubert is frequently used tactically, with the opposing party demanding a hearing that, in effect, becomes a mini-trial and raises expenses for the party using the expert.

They argued that Frye is a better, more reliable standard.

[Revised: 08-27-2014]