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A House panel on Thursday, in a move that signaled a defeat for the insurance industry and business groups, thumbed down a bill that would have added restrictions in “bad faith” legal challenges.
In a narrow vote of 8 to 7, the House Civil Justice Subcommittee junked HB 427. The bill was supported by groups like the Associated Industries of Florida, the National Federation of Independent Business, and the Florida Chamber of Commerce but was opposed by the attorneys of the plaintiffs.
Bad-faith lawsuits usually happen when insurance firms are confronted with allegations that they have not correctly settled claims. Fred Cunningham, the president of trial lawyers’ group, Florida Justice Association, said that the state is not faced with “crisis in the bad-faith world” that would give good reason for the additional restrictions as proposed by the junked bill.
Cunningham pointed this out to the subcommittee, saying, “This is a draconian solution in search of a problem.”
However, business groups and the insurance industry claimed that the attorneys for the plaintiffs have found ways to play around with the legal system, leading to bad-faith lawsuits which can result in huge settlements or expensive trials.
According to Richard Clark, owner of a Jacksonville janitorial company and is the chairman of the NFIB in Florida, all they wanted out of the bill and all they’re looking for are fair rules to play by.