Tom Gaitens
Tort-reform supporters urged the passage of bills to reel in third-party litigation financing (TPLF) during a press conference in Tallahassee, citing new data on how excessive civil lawsuits continue to place financial burdens on individuals and businesses.
Tom Gaitens, executive director of Florida Citizens Against Lawsuit Abuse (CALA), joined the Florida NIFB’s executive director, Bill Herrle, and former Rep. Jim Kallinger at the State Capitol on Tuesday to call on Floridians to stand by recent legal reforms, which they say benefit families and businesses economically.
Gaitens said Florida has led the nation in passing legal and insurance reforms in 2022 and 2023 and that these efforts have rebalanced the state’s civil justice system for the better.
“They weren't cosmetic adjustments,” he said. “They were structural corrections. And the results have been measurable, preserving $4.2 billion in additional business activity and supporting more than 29,000 jobs across Florida.”
But Gaitens stressed that new national data released by CALA shows excessive civil justice litigation produces $400 billion in yearly direct costs and results in a “tort tax” of $1,771 per American.
In Florida, meanwhile, the average tort tax is $1,306 annually, with excessive tort costs taking a $30.5 billion bite out of Florida’s gross state product and destroying 254,000 jobs, according to Florida CALA.
Florida CALA also released new economic data from the Texas-based Perryman Group about the impact of excessive litigation in the state’s metro areas. The Miami-Fort Lauderdale-Pompano Beach area had the highest per-person tort tax, at $2,347, and took the highest gross-product hit at $14.5 billion annually, along with job losses amounting to 120,836.
In the Orlando-Kissimmee-Sanford region, the tort tax stood at $1,525 per person, with annual gross-product losses estimated at $4.3 billion and job losses numbering 35,775, according to Florida CALA. And in the Tampa-St. Petersburg-Clearwater metro area, the tort tax resulting from excessive litigation stood at $1,465 per person, with job losses hitting nearly 41,000 and a gross-product hit of nearly $5 billion, the data shows.
Gaitens also urged the passage of Senate Bill 1396, sponsored by Sen. Colleen Burton (R-Lakeland), and House Bill 1157, sponsored by Rep. Fabian Basabe (R-Miami Beach). The measures aim to place guard rails on the practice of TPLF, in which foreign and sovereign entities and other investors finance civil lawsuits in return for a share of any eventual damages awards.
SB 1396 would bar litigation funders from affecting the course of legal proceedings or receiving a share of the damages in excess of the amount collected for the plaintiffs, according to the Legislature’s analysis of the measure. The bill would also mandate the disclosure of all third-party litigation financing agreements when they involve “a foreign person, foreign principal or sovereign wealth fund,” the analysis says.
TPLF is now largely unregulated in Florida.
HB 1157 also includes provisions to limit the conduct of litigation funders, including a requirement for courts to examine whether conflicts of interest might result from litigation-financing agreements. In addition, the bill calls for more transparency when parties in cases enter into such agreements.
