Punitive damages, lengthy the scourge of companies named in lawsuits, and a tough situation for insurers, could quickly be a lot tougher to come back by in Florida after a current opinion handed down by the state Supreme Courtroom.
“This may positively chill plaintiffs’ requests for punitive damages,” mentioned Robert Jarvis, a professor at Nova Southeastern College School of Regulation in Fort Lauderdale.
In a 6-1 decision posted Jan. 6, the excessive courtroom authorised an appellate process rule change that may permit interlocutory appeals on whether or not lawsuits can embrace calls for for punitive damages. The rule will take impact April 1. Till then, litigants have needed to wait till the tip of a trial to enchantment punitive harm claims.
The sensible impact of the brand new rule could also be that the enchantment, now to be allowed in the course of the midst of a decrease courtroom lawsuit, might take months. That may add delays to litigation and can finally discourage many plaintiffs from in search of punitive damages and urgent forward with trials, some attorneys mentioned.
Defendants in lawsuits will prefer it when an appeals courtroom bars punitive damages, and plaintiffs will smile when the damages are allowed to be thought-about, mentioned Curry Pajcic, a Jacksonville plaintiffs’ lawyer. However regardless of the end result, “It’s going to extend the price of litigation” for each side, he mentioned.
A tort-reform advocate referred to as the ruling a “recreation changer” that might assist forestall rifts that usually come up between insureds and insurers when hefty punitive harm awards are at stake. Many legal responsibility insurance policies, per statute, won’t cowl punitive damages. That usually prompts policyholders to settle fits prematurely, mentioned William Massive, president of the Florida Justice Reform Institute. In lots of circumstances, the insured will rent outdoors counsel to deal with that.
“Previous to this rule change, events needed to wait till the conclusion of a trial to handle the problem with an appellate courtroom,” Massive mentioned. “Seldom did events get to have an appellate assessment, due to insureds’ stress on insurers to settle the case. Lastly, defendants and insurers will probably be afforded the due course of they’ve been missing.”
A deterrent to punitive awards might doubtlessly have an effect on insurers in bad-faith claims. In some circumstances, insurance coverage corporations may be held responsible for punitive damages if a courtroom finds they behaved in a very egregious method, based on an article by Orlando-area legal professional Sean Schulz.
The Supreme Courtroom’s new rule is putting as a result of the courtroom took the initiative by itself, attorneys mentioned. As an alternative of the same old path for procedural guidelines – responding to a request from the Florida Bar or an motion by the Legislature – the courtroom on this case was the initiator that requested a Bar committee in 2020 to draft the rule.
“They used the Bar as fig leaf,” Jarvis mentioned. “This was so pointless. Nobody was clamoring to alter the interlocutory guidelines on punitive damages.”
The transfer is one other instance of Florida’s authorities and its governor-appointed justices taking a pro-business, pro-insurance, anti-plaintiff flip to the appropriate in recent times, Jarvis argued.
“The courts, particularly on the Supreme Courtroom and the appellate courts, have turn into very hostile to punitive damages,” he mentioned.
Justice Jorge Labarga wrote a pointy dissent to the ruling. Labarga, appointed by Gov. Charlie Crist in 2009, wrote that the “drastic change” will lead to pointless delays.
“Of specific concern are tort circumstances involving private damage, the place claims for a lot wanted medical and financial aid will stall till the query of punitive damages is resolved,” Labarga wrote. “Entry to our judicial system with claims approved by regulation shouldn’t be impeded by pointless delay and ensuing further expense.”
He quoted from the Florida Bar committee that drafted rule, which famous that no different state has the same process. Whereas the committee and the Bar’s board of governors authorised the change, the committee did so grudgingly, Labarga mentioned.
In years previous, the committee had declined to advocate the interlocutory rule change. However this time, the Bar members indicated they felt directed by a mandate from the Supreme Courtroom, he mentioned.
Labarga additionally identified that almost all of the justices had professed help for the change attributable to a priority concerning the privateness of litigants’ funds. State regulation forbids discovery of a defendant’s internet price till after punitive damages claims have been pleaded in courtroom. Now, if an appeals courtroom bars punitive harm claims, the plaintiffs can not proceed with discovery of economic info.
Labarga famous that funds can simply be shielded by a confidentiality order, with out abandoning the long-standing and environment friendly process the courts have relied upon.
Others mentioned that companies’ and jurists’ considerations over punitive damages could also be overblown. Florida law already limits punitive awards, generally, to not more than thrice the quantity of compensatory damages or $500,000, whichever is bigger. In circumstances through which the defendant knew the injurious exercise was harmful and pursued it purely for monetary acquire, punitives are restricted to 4 instances the compensatory quantity, or $2 million.
In circumstances of deliberate intent to hurt the sufferer, the regulation places no cap on punitive damages.