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Business Observer Friday, Feb. 3, 2012 7 years ago

Capitol Chatter: Feb. 3

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The most important issues being talked about in Tallahassee.
by: Rod Thomson Staff Writer

Insurer's 'bad faith' bill shot down in committee
One of the insurance industry's top priorities for this legislative session, an effort to protect insurers and businesses from abuses of Florida's “bad faith” law, was beaten 8-7 by a House panel by the strength of some strenuous lobbying by trial lawyers.

The House Civil Justice Subcommittee, which itself has plenty of lawyers, narrowly rejected the bill that was backed by groups such as the Florida Chamber of Commerce, Associated Industries of Florida and the National Federation of Independent Business and opposed by trial lawyers.

“Bad faith” lawsuits are when consumers or lawyers claim that the insurance company did not settle a claim in the prescribed timeframe or in a proper amount. The plaintiffs typically go for many times more money in a payout than was covered in the insurance policy.

Businesses say lawyers game the system by asking for so much background data that it becomes impossible to settle within the time limit. Then the lawyers sue the insurance companies for not settling the lawsuits in a timely manner.

“Florida is a haven for bad faith claims,” said Rep. Kathleen Passidomo, R-Naples, sponsor of the bill. She said 20% of all bad faith claims in the nation are in Florida.

But there is no “crisis in the bad faith world,” according to Fred Cunningham, president of the Florida Justice Association trial lawyers' group, who testified during the committee meeting. “This is a draconian solution in search of a problem.”

It was not quite a party-line vote, but close. All seven who voted for it are Republicans, while five of the eight who voted against were Democrats. Three Republicans sided with Democrats.

Workforce bill gives Governor firing power
A bill that would allow the Governor of Florida greater authority over regional workforce boards made it through the first step in the Senate unanimously.

The bill is in response to a series of embarrassments concerning the management and mismanagement of workforce boards. The bill allows the governor to fire top workforce board officials for any reason he deems.

Redistricting passes; 'voters' groups blasted
The House Redistricting Committee approved new boundaries for Florida's state and congressional districts after rejecting gerrymandered proposals from so-called voting rights groups, including the League of Women Voters.

The once-per-decade redistricting is required by law after a census. Scott is expected to sign the redistricting plans, and then the Florida Supreme Court will review the state legislative districts. Both the state and congressional plans can, and likely will be, challenged in court.

Florida voters approved the Fair Districts state constitutional amendment to foil gerrymandering last November, and Republican legislative leaders say they have hewed to the law and have had the most open process in history. Democrats agree the process has been open, but have not proposed their own maps and have remained quiet during the process. But their allies among voters' groups did their work for them.

A coalition of the League of Women Voters, La Raza and Common Cause Florida submitted their own proposal, that included districts appearing quite gerrymandered. They also attacked the Republican plan. But it was all by letter. None of the groups appeared at the hearing.

“I think the citizens of Florida deserve better than a letter the night before the committee meets,” said Rep. Will Weatherford, R-Wesley Chapel, said. “And I think the citizens of Florida deserve better than a map proposed to this committee two and a half days before we take a vote.”

Pointing out that the constitutional amendment Republicans were following specifically requires compact districts to avoid gerrymandering, Rep. John Legg, R-Port Richey was even more pointed. “My 3-year-old could draw something a little bit more compact than that.”

No-fault reform struggles forward
The House Civil Justice Subcommittee approved a bill aimed at reducing the widespread abuses in personal injury protection, or PIP.

The problem is that lawyers and some in the medical community abuse the system by referring people from accidents — where there was no damage or injuries at the scene — to PIP clinics. There, medical procedures skyrocket. From 2008 to 2010, PIP benefits paid out increased 70%, from $1.43 billion to $2.37 billion. From 2006-2010, the number of PIP lawsuits increased an astounding 387%. These numbers explain why PIP insurance premiums are predicted to rise 29% this year.

The bill changing the law restricts attorney fees and channels accident victims to emergency rooms or urgent care facilities connected to emergency rooms to eliminate the abuse of PIP clinics.

Again, a primary opponent of the bill is the trial lawyers organization, the Florida Justice Association, which is lobbying lawmakers and going on a public relations campaign to stop the reforms -- specifically the cap on attorney's fees. Billions of dollars are at stake and trial lawyers get a significant percentage of it.

Gov. Rick Scott jumped into the debate anew calling on consumers and lawmakers to counter the trial lawyers public relations offensive.

At the end, the bill passed 10-5 along party lines, with Republicans supporting reforms and the insurance industry and Democrats supporting the status quo.

Environmental permitting bill encounters no opposition
To the surprise of onlookers and some committee members, a Senate proposal to establish statewide environmental permits covering water issues encountered no opposition from environmental groups.

The bill, sponsored by Sen. Nancy Detert, R-Venice, passed unanimously out of the Senate Environmental Protection and Conservation Committee.

The bill allows state environmental regulators to adopt rules for stormwater and surface water standards throughout Florida. Detert says environmental groups support the bill because it does not dilute water standards within the state's broad water management districts.

As long as the water standards are maintained, the environmental groups appear ready to accept statewide standards, which would help developers in their planning efforts.

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