All aboard? Tommy Gregory proposes tort train to move controversial third-party financing bill
Christine Jordan Sexton – February 13, 2024
It’s the second time this Session that a top Republican lawmaker is trying to link together contentious legislation dealing with lawsuits.
For the second time this Session, a top Republican legislator is trying to link together contentious legislation dealing with lawsuits in order to try to win enough votes to move the bill.
Republican Rep. Tommy Gregory has been unable to move his proposal (HB 1179) to crack down on third-party financing in civil lawsuits, so now he’s suggesting to merge it with a bill (HB 569) that would increase the state’s sovereign immunity caps.
The House Judiciary Committee will consider the proposed committee substitute on Wednesday.
Gregory’s move mirrors an effort in the Senate where a bill that would revamp who can sue for medical malpractice was tied to an effort to put in caps on damages awarded in the lawsuits.
In both instances, it represents an effort to bridge gaps between groups that want to limit lawsuits and those representing Florida’s trial lawyers.
The third-party financing crackdown is a priority for the Florida Justice Reform Institute and the American Tort Reform Foundation, which repeatedly referenced third-party litigation financing in its 2023-24 Judicial Hellhole Report. The business-supported associations want the Legislature to create what it calls the Litigation Investment Safeguards and Transparency Act.
The law would require lawyers who enter into third-party litigation agreements to disclose that information to their clients. They would also need to inform the court, opposing counsel and any known person, such as an insurer, with a preexisting contractual obligation to indemnify or defend a party to the action.
The reporting requirements would apply to arrangements funded by domestic and international third-party financing companies. Proponents of the bill say it would protect litigants because it also prevents litigation financiers from directing the course of legal proceedings and contracting for a larger share of the proceeds from a legal proceeding than collectively recovered by the plaintiffs.
The Florida Justice Reform Institute says that internationally funded litigation financing could pose a risk to U.S. national and economic security interests and the bill helps prevent that. The bill staff analysis cites a Jan. 6 letter from U.S. Sen. John Kennedy to U.S. Attorney General Merrick B. Garland and U.S. Supreme Court Chief Justice Roberts
The bill is moving without much opposition in the Senate, but Gregory has been unable to use his sway as Chair of the powerful Judiciary Committee to move his bill through the House Civil Justice Appropriations Committee.
The move to roll the issues together puts the Florida Justice Association in a predicament.
The FJA says it supports efforts to ensure the safety of national security, a purported goal of HB 1179, but the statewide trial bar association has successfully opposed the bill in the House. The FJA, though, has supported HB 569 which doubles the state’s sovereign immunity caps to $400,000 per individual and $600,000 per incident. In doing so, the bill increases costs for local governments and government agencies, including hospitals.
Filed by Republican Rep. Fiona McFarland, HB 569 is the most tracked piece of legislation on the LobbyTools’ List of Top 20 Tagged Bills by Subscribers.
Meanwhile, this is not the first time the Florida Justice Reform Institute has pushed for a crackdown on third-party litigation financing. This year’s legislation is coming forward following a public fight between food giant Sysco and Burford Capital, the largest third-party finance and management firm. It is publicly traded on the New York, and London stock exchanges with offices in New York, London, Chicago, Washington, Singapore, Dubai, Sydney and Hong Kong.
Facing price-fixing suits, Sysco initially turned to the financier for assistance. But it ultimately sued Buford Capital accusing the financier of meddling with its legal strategy and blocking a settlement that Burford deemed “too low.”
Another high-profile case involving third-party financiers is Bollea v. Gawker Media. Plaintiff Terry Bollea (known professionally as Hulk Hogan) sued Gawker Media for publishing on its website a video of Bollea engaging in sexual relations with a married woman.
Billionaire and PayPal co-founder Peter Thiel secretly funded Bollea’s lawsuit. Gawker, in 2007, published a piece outing Thiel as gay, but Thiel denied that impacted his choice to fund the suit.
The jury ultimately found Gawker liable and awarded Bollea $115 million in compensatory damages and $25 million in punitive damages. A few months later, Gawker filed for Chapter 11 bankruptcy and sold several of its media outlets before settling with Bollea for $31 million.
