From Courtrooms to Boardrooms: The Business and Litigation Implications of Florida’s Tort Reforms

It is a situation every business dreads, but few can truly avoid: a customer suffers an injury linked to one of the business’ properties, products, or services. When this happens in Florida, time is of the essence. Following the 2023 tort reforms, the window for filing a negligence lawsuit has been cut in half − from four years to just two − leaving companies with far less time to assess the incident and report it to their liability insurer. At the same time, new limits on the ability of plaintiffs to present “sticker-shock” medical bills to juries have reshaped the calculus of litigation, forcing both claimants and companies to rethink their strategies. For businesses operating in Florida, these reforms promise a more balanced environment for defending claims − a central goal behind the Legislature’s actions. However, the advantages will only be realised if business leaders understand the evolving legal landscape and move quickly to adapt.

This article will explore how Florida’s recent tort reforms are reshaping exposure in negligence claims and lawsuits and examine practical steps to help executives, risk officers, and in-house counsel protect their companies in Florida’s new and evolving legal terrain.

What prompted Florida’s tort reforms?

Florida has been viewed as one of the nation’s most challenging legal jurisdictions for defending against civil lawsuits. A combination of generous damages standards, attorney-fee incentives, and a history of “nuclear verdicts” in some areas of the state made Florida a magnet for product liability, premises liability, and auto claim litigation. Insurers regularly cited Florida as a driver of higher premiums and national corporations often factored the risk of Sunshine State lawsuits into pricing and product-distribution strategies.

In recent years, a series of headline-grabbing jury verdicts have captured national attention as social media amplified emotional stories of consumers harmed by defective products and negligent business practices. In one particularly devastating case, an Orlando jury delivered a landmark USD310 million verdict against the manufacturer of an amusement park ride after a 14-year-old boy was tragically ejected from his seat due to a faulty restraint system. Down in Key West, another jury awarded more than USD40 million to a woman who suffered permanent facial and head injuries after being brutally attacked with a hammer in a resort’s parking garage − an incident that exposed serious lapses in security. And a hotel restaurant in Miami faced a staggering USD95 million verdict after serving an intoxicated driver who later caused a fatal crash, killing one person and leaving another with life-altering injuries. Each of these heartbreaking cases underscored not only the human toll of negligence but also the immense financial consequences for the businesses found responsible.

At the same time, supply chains grew more complex, increasing the number of potential defendants in a single case. Businesses faced not only legal costs but reputational risk whenever a product dispute went public.

As supply chains grow more intricate and businesses become more interconnected, the lines of responsibility can become blurred. This interconnectedness means that a single lawsuit can now draw in multiple parties, especially in areas such as construction or product liability. And when a dispute spills into the public arena, the costs extend far beyond legal fees − threatening the company’s reputation and public trust.

During Florida’s insurance crisis in the early 2020s, law-makers set out to rein in what they saw as an unsustainable system − starting with property insurance and claims of “bad faith” handling by insurers. But the scope of reform quickly widened. Soon, the Legislature was taking aim at medical malpractice, premises liability, and product liability cases, ushering in one of the most significant overhauls of the state’s civil justice system in decades. It was a defining moment − the first major tort reform in years to directly reshape negligence litigation in Florida.

What has changed and how does it affect injured parties and liable businesses?

House Bill 837 − and the various statutes signed into law on 24 March 2023 as a result of it − is a fundamental shift in how claimants and businesses must handle claims of negligence and liability. The reforms touch nearly every aspect of civil litigation, but several key provisions stand out.

Shorter times to present and investigate a claim

To begin with, the clock now runs faster than it once did. Prior to the tort reforms, a claimant generally had four years from the injury to file a negligence suit. Post-reforms, the Legislature has reduced the statute of limitations to two years for most negligence claims. These claimants need to move faster and companies must respond with greater speed and due diligence when investigating and evaluating those claims. As for a potential plaintiff, a lawsuit filed after the two-year cut-off will be barred and no recovery will be allowed, so due diligence is needed from the start to preserve a claim.

For a company facing potential liability, internal incident reporting and review should begin immediately after any event occurs. With the shortened timeframe for filing lawsuits, however, businesses must move quickly to evaluate incidents and − where necessary − engage experts or consultants early on. It is equally important to notify any liability insurer at the earliest stage, as the carrier’s window in which to investigate before a lawsuit is filed has also been reduced. Waiting for a formal demand letter may leave too little time to conduct a thorough investigation or begin preparing an effective defence.

A new view of fault

Since 1973, Florida had followed a pure comparative negligence system. The pure comparative negligence is a standard whereby a jury verdict is modified based on the comparative negligence of the parties. By way example, if a jury finds the defendant is 75% at fault and the plaintiff was 25% at fault, the plaintiff could only recover 75% of their damages. In other words, a plaintiff’s recovery would be reduced by the percentage that their own fault contributed to the plaintiff’s own loss. To one degree or another, 45 states follow this rule.

Florida’s 2023 tort reforms replaced the long-standing pure comparative negligence system with a modified standard − an approach now used in roughly 34 other states in some form. Under this rule, if a jury finds that a plaintiff is more than 50% at fault, that plaintiff is barred from recovering any damages. If the plaintiff’s share of fault is 50% or less, recovery is simply reduced in proportion to that percentage. The change applies to most negligence actions filed on or after 24 March 2023, with medical malpractice cases exempted and still governed by the former pure comparative negligence standard.

In practical terms, pursuing a negligence case to trial has become a higher-stakes gamble when the claimant may share significant blame for the incident. The new rule could push both sides towards earlier, more genuine settlement discussions − a shift that should benefit everyone involved.

Major changes to evidence of medical expenses

Another significant change under the new legislation involves how juries see medical expenses at trial − a reform that reshapes Florida’s long-standing collateral source rule.

Before these reforms, plaintiffs were allowed to present the full amount of their medical bills at trial, even if those charges far exceeded what was actually paid. In many cases, an injured person’s private health insurer had negotiated lower rates with medical providers, paying only a fraction of the original invoice. Still, the jury would still see the higher “sticker price”, while defendants were barred from revealing the reduced amounts health insurers actually paid − an issue to be taken up by the judge in post-trial motions. The result was often a distorted picture of the true cost of care, and one that could dramatically inflate damage awards and garner sympathy from the jury.

The new law brings that practice to an end. Now, only the amounts actually paid for medical treatment can be introduced as evidence. If an insurer covered the expenses, the jury sees what the insurer paid − not the higher amount originally billed by the medical provider. And, for any outstanding medical bills, the law allows evidence of what the insurer would have paid for those services.

Florida, like many other states, also permits the use of letters of protection − agreements that can significantly influence how medical damages are presented in court. As defined by Florida statute, a letter of protection is “any arrangement by which a healthcare provider renders treatment in exchange for a promise of payment for the claimant’s medical expenses from any judgment or settlement of a personal injury or wrongful death action”.

In practice, these arrangements often led claimants to bypass their health insurance or avoid paying out of pocket right away. However, because the provider was no longer billing through an insurer, they could set their own rates − typically at a much higher rate than what an insurance company would have negotiated. As a result, plaintiffs could present these inflated charges at trial, even though they bore little resemblance to usual and customary billing practices in the medical community.

Under the new law, if a plaintiff has health insurance but chooses instead to fund care through a letter of protection, only evidence of the amount the insurer would reimburse for medical services is allowed into evidence − not the inflated rates the medical provider unilaterally set in the letter of protection. If the plaintiff does not have health care coverage, then evidence of 120% of the Medicare reimbursement rate or 170% of the applicable state Medicaid rate (if there is no applicable Medicare rate) is admissible at trial.

In effect, this portion of the tort reform closes a long-standing loophole that allowed exaggerated medical costs to drive up verdicts and potentially result in windfalls for the injured party. The Legislature has amended the statues to ensure damages more accurately reflect the true value of the care the injured party received.

What impact do the tort reforms have on strategic considerations?

The goal of these tort reforms is both to have tangible implications for commercial liability insurance premiums and to assist Florida businesses in evaluating risk and liability.

By shortening the time a potential claim can linger prior to suit and eliminating recovery where an injured party is more than 50% responsible for their injury, the tort reforms create a more predicable litigation environment and eliminate the potential for residual claims. The reforms also demand that businesses review and streamline their procedures related to handling injury and negligence claims. A concentrated effort on the front end of the incident − evaluating, retaining necessary experts, and engaging liability carriers − can significantly assist later in the defence of a lawsuit.

One of the more intriguing aspects of the 2023 tort reforms is the creation of a new statute establishing a rebuttable “presumption against liability” for certain negligent security claims brought against owners and operators of multi-family residential properties. In essence, if property owners can show that they have substantially implemented a defined set of safety measures outlined in Section 768.0706, they are presumed not liable for criminal acts committed by third parties on the premises − unless that presumption is overcome by contrary evidence from the plaintiff.

The statute spells out in detail what qualifies as adequate security measures. These include:

• the installation of security cameras at all points of entry and exit, with footage retained for at least 30 days;
• sufficient lighting in parking lots that meets a specified brightness standard from dusk to dawn;
• one-inch deadbolt locks on every dwelling door;
• functional locking devices on all windows and exterior sliding doors;
• locked gates with key or fob access around pool areas; and
• peepholes or door viewers on unit doors that lack adjacent windows.

Although the list may appear exhaustive, most of these measures reflect basic, commonsense security practices that many properties already employ. However, the new law formalises these standards and attaches a meaningful legal benefit to compliance. Property owners who fail to meet these requirements could find themselves without the statute’s protective presumption − potentially exposing them to significant liability in the event of an incident. Because of that, this part of the tort reform represents both a warning and an opportunity. Those who act quickly to audit and upgrade their properties in accordance with Section 768.0706 will not only strengthen resident safety but also gain an important defensive tool in litigation. In short, taking these steps now could mean the difference between a defence verdict and a costly negligent security verdict.

How do Florida’s tort reforms compare with other jurisdictions in the USA?

Given the USA’s federal system of government, there is no one-size-fits-all approach to negligence lawsuits and variances can be great between the states. States such as Texas have implemented similar tort-reform measures, including caps on damages, modified comparative negligence, and tightened statutes of limitation. Texas, for example, limits non-economic damages in certain cases and applies a modified comparative negligence threshold of 51%, akin to Florida’s new framework. For companies operating in multiple southern states, these similarities can streamline risk assessment and claims-handling procedures.

By contrast, states such as California, New York, and Illinois maintain more plaintiff-friendly regimes, with longer statutes of limitation, broader discovery rules, and less restrictive damages frameworks. Plaintiffs may still “forum shop” in these jurisdictions, so companies doing business nationwide need to be aware of and appreciate the differences between states and regions.

In summary, Florida has taken an aggressive and comprehensive approach at amending its statutes, in the hope of creating a more predictable business and litigation environment. As House Bill 837’s analysis states, the main purpose is to “properly and fairly redress the civil wrongs caused throughout the state” and create a “positive fiscal impact on state and local governments, and on some private entities”. This approach is also meant to create more predictability for businesses and insurers, which will assist in lowering historically high commercial liability insurance premiums.

Since the reforms have mainly been in effect for just under three years and only apply to negligence claims that vested since 24 March 2023, it is still too early to see the full impact of the law. Nonetheless, these reforms have created much interest and their impact is being closely watched within and beyond Florida for the tangible effects on litigation and the insurance market.