The playing field of subrogation is always changing, and that means new laws and statutes for the insurance industry require us to pivot strategies! Florida recently passed House Bill 837, which will affect how PIP subrogation recovery is handled. Specifically, there are important changes to statutes of limitations, comparative fault, and commercial right to recovery.
You can find links to all three episodes of On Subrogation’s FL HB 837 series below, followed by an in-depth discussion on how these changes will affect Florida subrogation attorneys working at the intersection of insurance law and the right to recovery.
- On Subrogation: Florida HB 837 Affect to Statute of Limitations
- On Subrogation: Florida HB 837 Change to Comparative Fault
- On Subrogation: FL HB 837 PIP Commercial Right of Reimbursement
FL HB 837 Part I: Slashing Statutes of Limitations for Subrogation Claims
Florida House Bill 837, which went into effect on 24 March 2023, has significant effects on how certain types of subrogation claims are handled. Unfortunately, most of these changes will make Florida subrogation attorneys’ paths to recovering losses for their clients more difficult. But we know the field of insurance law is already nuanced; we have to be ready for changes like these.
Rathbone Group insurance attorney Jason Sullivan walks us through these developments in Florida subrogation statutes: the very bad, the also bad, and the (little bit of) good.
Perhaps the biggest obstacle Florida insurance carriers and their counsel now face is that statutes of limitations (SOL) on negligence claims have been slashed. Where FL Statute 95.11 allowed a 4-year SOL, HB 837 reduced SOL on negligence claims to just 2 years. As a reminder, negligence actions arise when damage to personal property or personal injury results from another party’s breach of duty to act with reasonable care.
Keeping Ahead of New Cause of Action Accrual in FL Subrogation
HB 837 Section 28 stipulates that this change to SOL only applies proactively, meaning if the cause of action predates the bill, Statute 95.11’s 4-year SOL still applies. In Florida subrogation law, cause of action accrues when all components of a lawsuit have happened. For example:
- In an automotive subrogation claim, the date of the incident and the date of the damages is the same: your insured’s car is immediately and obviously damaged as a result of the accident. Cause of action would start to accrue on that date, meaning you have 2 years to file a subrogation demand starting on that date.
- In a property subrogation claim, the date of the cause and the date of the damage may be different. If a roofer improperly installed shingles, it would take some time to realize a leak has rotted one of your house’s trusses. Cause of action would start to accrue on the date the damage is noticed, which may be months or years after the incident that led to the damage.
This legal uncertainty requires carriers to consult with local subrogation companies familiar with how this drastic change in Florida’s SOL policies are handled under HB 837.
FL HB 837 Part II: Moving from Pure to Modified Comparative Fault
Section 30 of HB 837 reportedly caused a panic across plaintiff law firms, resulting in a flurry of subrogation claim filings leading up to HB 837 taking effect. This is because Section 30 changes how Florida handles comparative fault as applied to the subrogation process.
Under Statute 95.11, Florida was a pure comparative fault state. Pure comparative fault allows plaintiffs the right to subrogation recovery even if they are partially at fault. In an incident where both parties’ negligence led to damages and a subsequent subrogation lawsuit, a plaintiff who is 10%, 20%, 70%, etc. still has the right to reimbursement, but the award is diminished in ratio to what the court determines is the plaintiff’s fault.
Now under HB 837, if the court determines a plaintiff is 50% or more at fault for the loss, rights to recovery through subrogation are waived. Section 30 is also meant to act proactively, which claims filed before 24 March 2023 being essentially “grandfathered” in to pure comparative fault. But like everything in subrogation litigation, it’s never that simple.
Who Has the Authority to Uphold Proactive Statutes for Subrogation?
Counties across Florida are applying this proactive vs. retroactive stipulation for comparative fault differently. Some courts argue what type of law this section of HB 837 applies to:
- Is it substantive addressing rights and responsibilities of a party? or
- Is it a procedural law that sets forth how a law is enforced?
If the courts see it as substantive, they ask whether there was clear legislative intent on whether the law would be applied retroactively or proactively? There is a bias that the legislative body should only apply new statutes proactively. However, if the court finds there is an express intent for retroactive application, the court then looks at whether the legislative body had the authority to make that law.
Conversely, the procedural view is handled in a more straightforward manner; the court decides whether proactive or retroactive application makes sense on a case-by-case basis, regardless of what the legislature says.
An early case following HB 837 looked at whether the checks and balances between governmental bodies apply at the state level – can judicial overrule legislative? Vice versa? The answer to that question still has not been answered, with some courts using discretion for proactive vs. retroactive application and others taking the stance of “the law is the law.”
Florida insurance attorneys working with claims where fault is not as straightforward as tortfeasor/victim have a lot of uncertainty to deal with. A depth of experience in Florida’s subrogation courts, and an ability to quickly pivot strategies as the legislature changes, are key to maximizing recovery for clients.
FL HB 837 Part III: A Threat to Insurer’s Rights to Subrogation Recovery?
Okay, now to a part of HB 837 that is not so disheartening to our colleagues in Florida subrogation. The major changes in SOL will not apply to the right to reimbursement from commercial vehicle owners/insured in PIP subrogation. HB 837 changes SOLs for negligence from 4 years to 2, but PIP subrogation against a commercial owner is a statutory claim.
This is because if a carrier provides PIP benefits and the injured insured is an occupant of the vehicle or a pedestrian struck by the vehicle, there is automatically a right of subrogation. Basically, since PIP reimbursement has nothing to do with negligence or breach of duty, it is a statutory cause of action, so 95.11 still applies.
So, carriers who pay PIP should always look to see if that exception to HB 837 SOLs applies to an insurance claim, lest they miss the deadline and lose potential subrogation recovery. Rathbone Group’s attorneys and subrogation network provide diverse clients including automotive carriers, TPAs, and captive owners, with top-tier subrogation resources that maximize recovery and minimize cost, no matter how muddy the Gulf waters.
You can watch our Florida HB 837 Subrogation series below:
Be sure to check out our YouTube program and podcast, On Subrogation, for more free education on important topics in subrogation and insurance law. Have a question or interest we haven’t yet covered? Reach out at video@rathbonegroup.com to suggest a new subject, and inquire about our subrogation department’s services at info@rathbonegroup.com.