The Florida Legislature closed out a fairly quiet legislative session earlier this month, but unfortunately did not pass third-party litigation finance reform. But they have another opportunity! Coming up in April is a special session to address property taxes and potentially the state budget. What better time for our Florida lawmakers to address this remaining piece of lawsuit abuse reform?
We desperately need appropriate safeguards on this disturbing practice, which unfortunately continues to build momentum and is incentivizing frivolous lawsuits in Florida.
Investors now view the court system as a source of profit. If a lawsuit, or package of lawsuits, looks promising for a big payoff, investors will cover upfront costs to sue in return for big payoffs for any judgment or settlement.
Remember, lawsuits don’t have to go to court, where presumably justice should prevail. Rather, many lawsuits end in settlement, when the mere threat of the lawsuit is enough to make defendants choose the known cost rather than take a chance on trial, where emotions and salacious arguments can override full consideration of the facts.
Third-party financing is fraught with problems and potential for abuse. Decisions can be made not on an assessment of damages but rather by an investor pushing for a particular dollar amount. Often, the threat of slick, high-paid legal teams is enough to intimidate a defendant into settling. The legal costs of defense are often the most intimidating part of a suit, driving cost-benefit analysis rather than considering facts and law.
The legislation that was under consideration by the Florida Legislature would have reasonably placed safeguards in place, so that third-party financing is disclosed up front and investors are not allowed to make decisions about case management. In no way does this stop a plaintiff from seeking financial assistance during a court case, but it does provide transparency so that both parties are fully aware of what is at stake.
It is surprising that these safeguards would be controversial in any way. What are plaintiffs and plaintiffs' lawyers trying to hide?
Remember that these excessive lawsuits have a cost on all Floridians. Economists calculate the hidden “tort tax” on all Floridians to be thousands of dollars per year. Imagine if we could cut that in half. The economic benefits would help stimulate our economy during these uncertain times and ensure that we continue to have healthy economic growth in Florida.
Let’s not let another year go by. Let’s revisit third-party litigation financing during the upcoming special session and finally put a finishing touch on this issue. The people of Florida deserve it.
Randy Ray,
Chairman, Senior Consumers of America
