‘Pre-Judgment Interest’ Bill Would Further Advantage Trial Lawyers

Press Releases | March 29, 2017

WASHINGTON, D.C., March 29, 2017 – With the Florida Senate’s Rules Committee poised to take up another bill designed to advantage politically powerful personal injury lawyers in Tallahassee this afternoon, the American Tort Reform Association sharply criticized both the bill and “the legislative leaders now serving as handmaidens to the plaintiffs’ bar.”

ATRA director of legislation Matt Fullenbaum said, “S.B. 334 would require Florida courts to abandon the approach they’ve taken to so-called ‘pre-judgment interest’ on plaintiffs’ damages claims for more than a century. And considering how generally hostile the state’s courts are to business defendants already, Floridians can fairly ask why legislative leaders have let this onerous, shake-down bill survive as long as it has.”

Fullenbaum fired a preliminary salvo at Speaker of the House Richard Corcoran and Senate President Joe Negron last week in a letter to the editor published by The Wall Street Journal. He charged the two Republicans of “running obedient interference” for trial lawyers trying to kill a reform bill aimed at their “assignment of benefits” racket, which an earlier Journal editorial called the Florida plaintiff bar’s latest “get-rich-quick scheme.”

“If they’re not trying to kill a commonsense reform that would keep plaintiffs’ lawyers from defrauding insurance companies and driving up premiums for everyone across the state,” an exasperated Fullenbaum continued, “then Messrs. Negron and Corcoran are paving the road for a pre-judgment interest bill that would require judges to make wholly speculative calculations about pain-and-suffering awards, beginning the day a claim is filed, long before facts are discovered and considered by a jury.

“This pre-judgment interest bill is designed solely as another unfair advantage for plaintiffs’ lawyers seeking early settlements from defendants or groundless windfalls after a verdict. In either case, any lawmaker supporting this predatory bill should know that their Sunshine State constituents – at least some of whom are unemployed or under employed and thus would presumably benefit from a more business-friendly climate – will be educated as to their position on this bill and others,” Fullenbaum concluded.

Below are key points ATRA offers as criticism of the pre-judgment interest bill, sponsored by Senator Greg Steube (R-23^rd), chair of the Senate Judiciary Committee:

SB 334 would abandon the approach to pre-judgment interest that Florida has followed for more than a century to ensure that a plaintiff receives full compensation for out-of-pocket losses. Under the existing approach, the purpose of pre-judgment interest in Florida is to compensate the plaintiff and is not meant to penalize the defendant or provide a windfall recovery to plaintiffs. Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212 (Fla. 1985); Arizona Chemical Co. v. Mohawk Indus., Inc., 197 So.3d 99, 102 (Fla. 1^st DCA 2016).

SB 334 would require defendants for the first time to pay Florida personal injury plaintiffs pre-judgment interest on claimed noneconomic damages. Since at least 1954, Florida courts have recognized that pre-judgment interest has no proper application “because of the speculative nature of some items of damage, such as mental anguish, and the indefiniteness of items such as future pain and suffering.” Bosem v. Musa Holdings, Inc., 46 So.3d 42, 46 (Fla. 2010) (quoting Jackson Grain Co. v. Hoskins, 75 So.2d 306, 310 (Fla. 1954)).

Noneconomic damages, such as pain & suffering, address quality of life issues rather than pecuniary losses. Juries determining these types of damages place an overall value on the full scope of deprivations a plaintiff experiences. Pre-judgment interest, which is an economic concept, makes no sense when applied to noneconomic damages and would therefore produce a windfall to personal injury plaintiffs.

SB 334 employs an unfair trigger for accrual of pre-judgment interest on noneconomic damages. Interest would begin to accumulate as soon as a plaintiff makes a claim, even though the defendant has had no opportunity to investigate the circumstances and decide on how to respond. Further, under the incredibly broad language of SB 334, pre-judgment interest would be required on awards of damages for future pain & suffering.

SB 334 expands the types of economic damages for which a plaintiff can recover pre-judgment interest. Presently, a plaintiff may recover pre-judgment interest on “out-of-pocket, pecuniary losses” with a fixed date of loss. Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212, 215 (Fla. 1985); Lauderdale Marine Center, Ltd. v. MYD Marine Distributors, Inc., 31 So.3d 256 (Fla. 4^th DCA 2010). SB 334 would mandate interest on “each component of damages in the final judgment,” including “the loss of an economic benefit to the plaintiff.” Such losses could include medical expense payments made on behalf of an injured plaintiff by third-party insurers. Allowing a plaintiff to recover pre-judgment interest on payments made by others would represent a classic windfall recovery.

-ATRA-