Lawsuit Abuse: The Hidden Tax on Florida Families

By Jim Kallinger

Florida has spent years building a reputation as a place where people can work hard, build businesses and keep more of what they earn. Families continue to move here from higher-cost states in search of lower taxes, greater freedom and a government that does not stand in the way of opportunity, but a less visible variable had begun to undermine that reputation: Florida had become one of the most litigation-heavy states in the country.

For years, lawsuit abuse imposed a cost on Floridians whether they ever stepped inside a courtroom or not. Aggressive advertising encouraged claims, questionable lawsuits clogged the system, and an entire legal ecosystem developed around suing insurers. The resulting costs ultimately found their way into higher insurance premiums paid by families and businesses across the state.

In 2023, Florida lawmakers took meaningful action, the Legislature passed a package of reforms designed to address some of the practices that had contributed to excessive litigation, particularly in the property and auto insurance markets. It was an acknowledgment that Floridians should not have to absorb the cost of a system that rewards prolonged litigation at the expense of resolving legitimate disputes.

That progress should not be put in reverse, there is growing discussion in Tallahassee about rolling back or repealing portions of the 2023 reforms. That would be a step in the wrong direction at a time when Florida families and small businesses are already dealing with higher prices and mounting household expenses. Savings in one part of the family budget do little good if unnecessary litigation continues adding costs elsewhere.

The question for lawmakers should not be whether Florida has done enough on lawsuit reform. It should be how the state can build on what it has already accomplished. One area deserving serious consideration is medical malpractice. Establishing a reasonable limit on medical malpractice awards could help address the costs associated with medical and dental liability coverage, costs that ultimately affect employers, providers and consumers. Third-party litigation financing also deserves greater scrutiny. Under this model, outside investors can provide financial backing for lawsuits in exchange for a portion of a potential recovery. Those investors may have no connection to the underlying dispute, yet they can have a financial interest in how long litigation continues and how large a settlement becomes. Greater transparency and reasonable limits on this practice would address an increasingly important part of the litigation landscape without denying legitimate plaintiffs access to the courts.

This debate should not be framed as a choice between protecting Floridians and protecting their access to justice. People who suffer legitimate injuries deserve a fair opportunity to seek compensation. At the same time, consumers and businesses deserve a legal system that encourages legitimate claims to be resolved fairly rather than creating incentives for unnecessary litigation. Florida’s 2023 reforms demonstrated that meaningful changes are possible when lawmakers are willing to tackle the underlying causes of lawsuit abuse. The Legislature has an opportunity to continue reducing those costs, strengthen the state’s economic foundation and preserve the progress already made.