Navigation Partner at Butler Legal on House Bill 1551: Policyholders are ‘the ‘prevailing party’ under the statute’
Matthew Lavisky, a partner at Butler Legal, expressed concerns over House Bill 1551, suggesting it could lead to policyholders being deemed eligible for attorney fees even when their recovery is minimal compared to their initial claims. This statement was made in a press release on March 18.
“If an insured demands $500,000, the insurer offers $100,000, and the insured recovers $101,000, the insured is the ‘prevailing party’ under the statute, despite losing the lawsuit by recovering a fraction of the amount demanded and in dispute,” said Lavisky. “House Bill 1551 brings back the old law with all of its consequences. This system of lawyers determining the value of the services of lawyers led to hugely excessive ‘reasonable’ rates for run-of-the-mill litigation. Cases became about the lawyers, not the insureds.”
House Bill 1551 proposes a framework where attorney’s fees are awarded to the prevailing party in insurance disputes. According to an analysis by the Florida House of Representatives, the bill defines the insured as the prevailing party if they obtain a judgment greater than the insurer’s highest written, good faith settlement offer. Lavisky argues this could result in situations where policyholders receive minimal recoveries yet are entitled to substantial attorney’s fees.
