Lawsuits Target Special Session Reforms
In late May, the Florida legislature passed several measures intended to address continuing concerns with Florida’s residential property insurance market. Lawmakers commented that the new laws will not provide quick fixes; instead, the benefits might take 12-18 months to materialize.
Unfortunately, this estimate might prove to be optimistic as two lawsuits have been filed challenging some of the reforms. Depending on the outcome of the litigation, some components of the new laws might never take effect or might be delayed in their implementation.
The first challenge was filed just three business days after Governor Ron DeSantis signed the reforms into law. The suit targets a provision of Senate Bill 2D prohibiting the assignment of attorneys’ fees in connection with residential property insurance claims. In 2019, the legislature attempted to limit concerns with assignments of benefits (AOB) by regulating the content of assignments, the timing of notices to insurers, and assignees’ potential recovery of attorneys’ fees. Due to continuing concerns in this area, the legislature decided in this year’s special session to prohibit attorneys’ fee assignments altogether.
Restoration Association of Florida and Air Quality Assessors have challenged this new prohibition. They argue it is unconstitutional because it denies contractors access to courts and treats them differently than other plaintiffs. The lawsuit also alleges that the law violates the Florida Constitution because it was adopted in a single piece of legislation improperly covering multiple topics.
The Restoration Association of Florida and Florida Premier Roofing LLC then filed a second suit challenging roof-related reforms contained in a separate bill (SB 4D). As with the first case, the lawsuit argues the bill violated the Florida Constitution because it impermissibly addressed multiple subjects. The lawsuit also contends that the new law improperly conflicts with an existing law requiring roof repairs to match in quality, color and size.
The pending lawsuits introduce uncertainty as to the effectiveness and timing of some provisions of the special session reforms. In turn, this only delays the period in which policymakers will be able to evaluate the impact of the changes on the deteriorating conditions in the Florida market.