A judge in Tallahassee recently blocked Florida’s new no fault insurance law. The judge issued a written decision finding that the new law violates the constitutional right of access to courts. While the judge’s decision is likely to bring howls from the insurance industry about “judicial activism,” it makes sense when one considers our constitution and court system.
To understand the decision, however, one must put it in context with the no fault law’s history. So at the risk of oversimplifying a few things, here is a brief review:
Florida has had a no fault auto insurance law for decades. Generally, that law requires a person injured in a car accident to use their own insurance coverage for certain expenses. An injured person is required to first seek benefits under their own coverage, or the coverage on the vehicle they were occupying, before making a claim against others. This is true even if another person caused the accident. Because this coverage is not tied to legal fault, it is often referred to as “no fault.”
While the no fault moniker is common, this coverage is actually called personal injury protection, or PIP. Drivers in Florida are currently required to have $10,000 of this coverage.
The upside of PIP is that is was designed to be available quickly and easily, and without the need for fights about liability. The downside is that PIP also restricts people’s right to make claims and seek damages in a personal injury or death lawsuit arising from a car accident.
Even though PIP’s restrictions took away some of the damages historically available to people injured in car accidents, Florida courts permitted those restrictions. They found the no fault system provided benefits which largely replaced traditional courthouse damages. While the compensation schemes were not identical, the courts considered no fault to be at least roughly as good as the old damages system.
Until 2013, a full $10,000 would be available to pay accident-related expenses such as medical bills and lost wages to an injured person. However, the Florida legislature restricted PIP coverage last year. Under the new law which became effective a few months ago, the full $10,000 is only available to someone who has an emergency medical condition. For those with lesser medical problems, only $2,500 is available. The legislature also put other restrictions on coverage, such as barring coverage for those who don’t receive medical care for 14 days after an accident.
However, these new restrictions create a problem. The new system is so much more stingy that it no longer looks like a decent tradeoff for the old-time damage remedies people lost. While the legislature took certain no fault benefits away, it provides no new benefits or upsides. There’s a serious question about whether it is still a reasonable alternative to the old courthouse damages system.
This brings us back to the court’s decision from Tallahassee. The judge there handed the insurance industry a defeat on constitutional grounds this week. The court found PIP’s new restrictions were too severe. According to the judge, they turned PIP into a constitutionally inadequate substitute for the old damages law.
The court’s order blocked the new PIP law. In legal terms, he entered a temporary injunction, which at least temporarily prevents some of the restrictions in the new law from being effective.
There will no doubt be an appeal and plenty of hand-wringing by the new PIP law’s proponents. However, the decision rests on a very basic constitutional principle: you can’t simply take legal rights away unless you replace them with something which provides comparable benefits. The new PIP law flunked that test.
The judge who decided the case followed the law as he reasonably understood it. That is what judges are supposed to do. While one may disagree with his ultimate conclusion, his decision was not activist, result-oriented, or the result of some left-wing agenda. If you hear otherwise from the insurance lobby, consider the source.
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