It’s election season in Florida. Because of that, you’ll probably be hearing about “tort reform” in political ads and debates in the next few months. 

Rick Scott, the Republican candidate for governor, has announced a “7-7-7 Plan” which is supposed to put 700,000 Floridians back to work. Predictably one part of the plan is to “limit frivolous lawsuits by implementing tort reform.”

We aren’t sure exactly what Scott has in mind. But the reality is that the Florida justice system has already been through several rounds of so-called tort reforms. For example, reforms enacted in the last several decades have limited lawsuit damages available to auto accident victims, restricted people’s ability to pursue medical malpractice claims, and provided for mandatory attorney’s fee awards against people who reject certain formal settlement offers.

These types of reforms are peddled to the public on the ground that they will reduce verdicts and settlements. This, in turn, is supposed to lead to lower insurance claim payments, which will result in lower insurance premiums for everybody. So why has this not occurred with the waves of “reforms” we’ve seen already? The reason is simple: insurance premiums are not driven by insurance claim payments at all. Instead, premiums rise and fall because of something called the insurance business cycle.

The insurance business cycle stems from the way insurance companies make money. Big insurers don’t simply profit by paying out less in claims than they receive in premiums. The real money is actually made through investment income. Insurers take their profits and invest them in the same types of things as any institutional investor: bonds, stocks, and the like. This generates investment income, which is actually where insurers make most of the return on their net worth.

When the economy is doing well, insurance companies make a lot of money through investment income. To get more money to put toward their lucrative investments, they offer lower and lower premiums. They hope to grab more market share and consequently, more cash to invest. This downward pressure on premiums creates what insurance professionals call a “soft” market.

Eventually, when the economy stalls, interests rates fall, or low premiums reduce profits, insurance companies respond by drastically increasing premiums and reducing coverages. The insurance industry then enters a “hard” market period. After a while, prices stabilize, the market softens, and the cycle repeats itself.

Hard markets create political clamor about a “liability insurance crisis” and the need for tort reform. However, tort lawsuits don’t create hard markets in the first place. For the same reason, curbing lawsuits will not make a hard market go away. Much larger market forces, such as those at work in the recent financial crisis, are responsible for the conditions that create that cycle.

The insurance business cycle is well understood by those in the industry. The relationship between availability of insurance, and the premiums one has to pay for insurance, are directly related to that cycle. Lawsuits, settlements, or verdicts do not affect that relationship.

You won’t hear about this from Rick Scott, or probably even from Alex Sink. It’s a lot easier for political types to blame lawyers than the business model used by insurance companies. But we hope you’ll think about myth versus reality as you’re subjected to the usual blitz of political ads and slogans in the next few months.

If all you did was watch insurance ads on TV, you’d think the process of making an insurance claim is easy. The good hands people, or the good neighbors, or the people who are on your side, or the people who keep you safe under the umbrella, would get some background information supporting your claim. You would then get a check from your insurance money to compensate you for your losses. You would thank them and move on with your life. 

The unfortunate reality is that the insurance claims process is not always easy. In fact, it can be miserable and frightening.

One of the things which can make the claims process difficult is the “examination under oath.” You’ll never hear about examinations under oath in a TV commercial, but they are quite common. The language of many insurance policies require a person seeking insurance benefits to be questioned under oath about the details of their claim.

There is no doubt that insurance companies have to investigate claims. They have a legitimate interest in getting relevant information about claims and preventing fraud. The problem is that there is virtually no regulation of these types of exams under Florida law. Without anyone policing them, insurance companies sometimes become abusive.

Many policies state that an insured person has to submit to such an examination “as often as we reasonably require” (“we” in this case being the insurance company). There is no set limit on the numbers of exam, the time the exams may take, or the questions which might be asked.

There is also no legal limit on the type of documents or materials an insurance company can ask someone to bring to their exam. As a result, insurance companies sometimes ask for information which bears no relationship to the claim. This can include items like tax returns, mortgage payment records, telephone bills, credit card bills, utility bills, gas card bills, and bank statements.

Insurers often make the dubious claim that they need this sensitive financial information so they can figure out who is in financial trouble and might be tempted to commit fraud. A more plausible explanation is that it discourages people from making claims at all.

A recent case from one of the Florida appeals courts, First Home Insurance Co. v. Fleurimond, describes some of the bad behavior that can occur during these exams. Mr. Fleurimond was a man who made a homeowners insurance claim for hurricane damage. He was not represented by a lawyer. The insurance company demanded an examination under oath, and Fleurimond complied. As the court opinion says:

According to [Fluerimond], during the examination the examiner badgered him and yelled at him. After answering the examiner’s questions in English, the examiner stated that he thought there was a language problem and asked an interpreter to join them. The examiner repeated all of the same questions which were translated into Creole. After answering the second set of questions, [Fleurimond] and his wife left during a break and did not reappear.

The insurance company then argued that Fleurimond had failed to comply with the requirements of his insurance policy because he walked out of the exam. The court did not agree. It found that Mr. Fleurimond and his wife were justified in leaving and refused to dismiss their lawsuit.

We hope the courts and the Florida Department of Insurance will rein in insurance companies that abuse the examination process. The Fleurimond case is a step in the right direction. In the meantime, we recommend that you contact a lawyer and discuss your rights if your insurance company demands one of these from you.

Historically, the right to a trial by jury in a court of law has been one of the most cherished features of our system of government.  There is no better way to protect against corruption than to have a jury of one’s peers hear and decide a legal dispute.  Unfortunately, that fundamental right is being taken away by forced arbitration. 

Arbitration is an informal process for deciding disputes very different from the right to a jury trial.  In arbitration, there are usually no rules of evidence, no rights to subpoena people to come in and testify, and no right to obtain documents from third parties.  But perhaps the most striking difference from a jury trial is who makes the decision:  either one person, or a panel of people, who may be industry insiders, lawyers, or people on an exclusive list of arbitrators.

  Read More >>

Finally, there is some good news for consumers who have injury or death claims against government agencies in Florida. The state’s caps on liability, often referred to as sovereign immunity limits, have finally increased after 30 years. Read More >>

It’s no secret that social networking sites have become tremendously popular in the last few years. Many people have joined Facebook, My Space, or similar sites to keep in touch with friends and family and post photos or other materials.

Most people believe they can control who sees the material they post through privacy settings. For example, Facebook allows you to restrict the group of people who can view the things you post. Read More >>

Last month, I was reminded of how dangerous a place Tampa Bay is for people on bicycles.

First, Bay News 9 ran a story on John Sinibaldi on March 7th. Sinibaldi is a St. Petersburg cyclist who was just involved in a collision with a car for the second time in six years. According to the story, Sinabaldi suffered a broken shoulder blade, torn rotator cuff in his shoulder, and low back injuries. Sinibaldi said the car involved turned right directly into his path, making an accident unavoidable. Read More >>

The Florida legislature has just passed a change in the law of “premises liability.” Premises liability involves a person’s right to recover when injured on someone’s land or place of business. They usually involve people injured in stores, restaurants, and other businesses open to the public.

To take a common scenario, suppose a woman is shopping in a grocery store. She slips on salad dressing, falls, and breaks her ankle. She then makes a claim against the store to recover for her medical bills and other damages. Read More >>

The State of Florida is struggling. From schools, to roads, to law enforcement.   Budget shortfalls are stressing our resources badly.
There is another critical need no ones seems to talk about. We need more judges.  There have been no new judgeships in three years.   The thing we need right now is more judges to keep up with increased case filings. It’s not just us who feel this way, this is according to the Supreme Court of Florida  who last week asked our legislature to fund more judicial positions. Our need for judges is a major reason Floridians are waiting longer than ever to get their cases heard. Read More >>

During the recent healthcare debate, some of the chatter has been about a study which came out of Harvard. The study investigated the link between illness/injury and bankruptcy. The study’s authors surveyed Americans who filed for bankruptcy in 2001 and reviewed their bankruptcy court records. The results were grim: about half cited medical reasons for their bankruptcies.

Even worse, about 75-percent of those who experienced medical bankruptcy had insurance when they became ill. They often experienced lapses in coverage after their injury or illness declined; the authors noted that a “lapse in health insurance coverage during the two years before [bankruptcy] filing was a strong predictor of a medical cause of bankruptcy.” Read More >>

The biggest insurance company in Florida is clearly doing something right. After a loss in 2008, the $777 million in profit for 2009 is the result of “good investments” and “underwriting results”,  according to news reports. State Farm, until recently, announced plans to leave Florida, claiming it could not stay in business under the current regulation of it operations. Maybe they will stay after all. Read More >>

If you’re injured in a car accident, you probably expect that the most important thing is the nature of your injuries. Insurance companies don’t always see it that way. Often, they’re more interested in the damage to your car than the damage to you. Welcome to the low impact defense!

The low impact defense basically goes like this: if your car isn’t badly damaged, you can’t be seriously injured. Insurance companies present this defense at trial in an attempt to persuade jurors to award little or no damages to accident victims. Their lawyers will often show photos of vehicles showing only “fender bender” type damage. “Ladies and gentlemen of the jury,” the defense lawyer will ask rhetorically, “are we really supposed to believe that all the injuries suffered by Ms. Jones came from this minimal impact?” Read More >>

In 1986 there were almost 370,000 civil cases filed in Florida. Of those, only about 2,500 ended with a jury trial. In 2006 the number of civil lawsuits increased to 542,000. Amazingly, of these only 1,077 ended in a jury trial. These numbers were cited in a recent article in the Florida Bar News. 

What does this mean to Floridians? It would seem that very few Florida lawyers have jury trial experience. The numbers confirm this.  With the limited number of experienced litigators in Florida the chances of an accident victim hiring a lawyer with little or no trial experience is great. Read More >>

Many people who suffer personal injuries believe their cases will be straightforward.  They believe if that they suffer a serious injury in an accident, they will easily be able to recover the damages caused by their injury. 

 For example, a previously healthy adult woman may suffer a serious neck injury in a car accident.  After months of medical treatment with no improvement, she may require a surgery to remove a herniated disc from her neck.  She might reasonably expect her neck injury case to be “open-and-shut.” Read More >>

What to do if you have an auto accident

1. STOP. Stop your vehicle. It is a crime to flee the scene. If the accident is severe, do not move vehicles. If it is a fender bender that will tie up traffic for hours, move vehicles into safe area.
2. Injuries? Check to see if anyone has been injured. If so, call 911. Do not move the person until emergency help arrives.
3. Cooperate with law enforcement. Exchange name, address, and insurance information with the other driver(s). Also, obtain the make, model, year, color and license tag number of all vehicles involved in the accident.
4. Witnesses. If there are witnesses to the accident, be sure to get their names, addresses and telephone numbers before they leave the scene. Read More >>

Charles Mathis drives home from work on U.S. 19 during rush hour. Another driver talking on a cell phone turns left directly in front of him. The cars collide at high speed. Even with his seat belt on airbags working, Mathis is seriously injured. He goes to the hospital emergency room in an ambulance.This nightmare scenario, while fictional, illustrates a problem we see all the time. Many people don’t realize until after they suffer a serious accident that there is no insurance available to compensate them. They suffer horrendous financial losses but have no real recourse against anyone. 

 At the hospital, Mathis has emergency surgeries on his neck, low back, and shoulder. His physicians restrict him from returning to work for a month.

 Faced with $60,000 in medical bills and no income coming in, Mathis seeks a recovery from the at-fault driver’s insurance company. He is shocked to discover that the other driver has no insurance to cover his injuries at all. Read More >>

If you are injured in an auto accident, your damages are often uncollectible when an uninsured driver is to blame.  There is a solution. 

THAT ANSWER LIES IN OBTAINING AS MUCH UNINSURED MOTORIST COVERAGE AS YOU CAN AFFORD.

Mark Roman Law Group urges you to follow this simple advice:

1.  Contact your car insurance company or agent to determine whether you have “Bodily Injury Coverage.”

2.  If you have “Bodily Injury Coverage,” make sure you did NOT reject “Uninsured Motorist Coverage.” Read More >>

Members of Congress have been discussing limits on medical malpractice claims as part of overall health care reform. Apparently, their hope is that curbing malpractice lawsuits and “defensive medicine” will result in lower health care costs.

This theory does not hold up when one looks at the numbers. The additional healthcare costs created by medical malpractice lawsuits are minuscule. Depending on whose numbers one believes, they range from about half of one-percent to two-percent. By comparison, administrative costs for health care are usually calculated to be from 25 to 30 percent. Read More >>