Broxson Plan To Limit Attorney Fees In ‘AOB’ Cases Stalls

February 12, 2019

In what could be a glimpse of the battles to come over the heavily lobbied issue, a Senate committee Monday bottled up a proposal that would limit attorney fees in cases involving the insurance practice known as “assignment of benefits.”

The Senate Banking and Insurance Committee tabled a bill (SB 122) sponsored by Chairman Doug Broxson, R-Gulf Breeze, after it became apparent the measure would fail if brought up for a vote. Though the 2019 legislative session does not start until March 5, it was at least an initial blow to the insurance industry and other business groups pushing to limit attorney fees in so-called AOB cases.

Sen. Tom Lee, R-Thonotosassa, joined three Democrats in opposing the bill, making it impossible for Broxson to patch together a majority on the eight-member committee. Insurers and their allies argue that fee limits are needed because of an increase in AOB litigation that is driving up consumers’ property-insurance premiums.

But Lee said there are “some bad actors on both sides of the equation” and indicated he thought Broxson’s bill could end up hurting consumers who need homes repaired for such things as water damage.

“We are going to kill the patient while we try to cure the problem,” Lee said.

Sen. Keith Perry, however, said the bill “is a step in the right direction” and argued consumers will face higher insurance rates if lawmakers don’t solve the problem.

“We owe it to the working-class people of the state of Florida to do something,” Perry, R-Gainesville, said.

Assignment of benefits is a decades-old practice that has become highly controversial in in recent years. Lawmakers have repeatedly considered proposals to address the issue but have not been able to reach agreement.

In assignment of benefits, homeowners in need of repairs sign over benefits to contractors, who ultimately pursue payments from insurance companies. Insurers contend that the practice has become riddled with fraud and litigation, while plaintiffs’ attorneys and other groups say it helps make sure claims are properly paid.

Broxson’s bill focused only on attorney fees that insurance companies pay in many AOB disputes. While the bill stalled Monday — or, in legislative parlance, was temporarily postponed — it could be brought up again.

Under state law, insurance policyholders are entitled to have their attorney fees paid if they prevail in cases against insurers. In 1972, a Florida Supreme Court ruling also extended the right to recover attorney fees to people, such as contractors, who have been assigned insurance benefits, according to a Senate staff analysis.

But Broxson’s bill would have prevented continuing to extend the right to attorney fees to contractors. The staff analysis said that such a change would “make the assignment of post-loss benefits less valuable. The assignee (the person assigned the benefits) would have to pay his or her own attorney fees to enforce the insurance contract.”

Opponents of Broxson’s bill contend that assignment of benefits and the potential of litigation are needed because insurers sometimes try to avoid paying the amounts of money they should for damage claims. Sen. Darryl Rouson, D-St. Petersburg, said Monday he thinks Broxson’s bill is a “nuclear option to get at a few bad people.”

Supporters of the bill, however, contend that lawyers and restoration companies have abused the assignment-of-benefits system, with the problem initially focusing on water-damage claims in South Florida. They argue the problem has moved to other parts of the state and to types of claims such as replacing vehicle windshields.

“This is a pandemic that is slowly beginning to spread across the state,” Sen. Jeff Brandes, R-St. Petersburg, said.

by Jim Saunders, The News Service of Florida

Comments

2 Responses to “Broxson Plan To Limit Attorney Fees In ‘AOB’ Cases Stalls”

  1. chillywilly on February 12th, 2019 9:39 am

    Mr . Broxson, how about stop helping the insurance industry and do something for the people you represent. For example do something to resolve the issues with the Garcon Point Bridge. A political disaster since the days of Bo Johnson. The state is already on the hook to maintain it. The state needs to take it over and reduce the toll or just eliminate the toll. It is needed for people that commute to the south end and also for Hurricane evacuation Do your job and take care of it. Its Time. .

  2. jp on February 12th, 2019 8:25 am

    Senator Broxson is big on penalizing everyone to possibly prevent a small number of crimes.
    Like the bill to prevent all young adults below the age of 21 from buying a gun.

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