On legal reform, not all reforms are created equal

Over the past several years, the Sunshine State has taken an aggressive approach to rein in frivolous litigation and address myriad issues faced by over-the-top billboard trial attorneys.

For years, the litigation climate in the state was so bad that it was categorized as a “judicial hellhole” by a national organization. I am closer to this issue than most — in my decade at The James Madison Institute, I spent more time than I care to admit on the issue of legal reform.

When it comes to any legislative proposal, one very important thing to remember … the devil is in the details. Not every proposal to address litigation will necessarily be a good idea, and just labeling something as pro-consumer does not make it so. And while there may be good intentions underlying the concept, as conservatives, we pride ourselves on judging an idea by its results, not intentions. On that scale, Florida’s Senate Bill 1396 – the so-called “Litigation Investment Safeguards and Transparency Act” – is decidedly a bad idea.

Our policymakers are largely committed to protecting limited government, free markets, and the rights of individuals to stand up against powerful institutions. That makes SB1396 all the more puzzling.

While marketed as a “consumer protection” effort aimed at reigning in litigation financing, the bill would, in practice, tilt the playing field sharply in favor of massive corporations. If conservatives are serious about protecting ordinary Florida consumers, they should reject this approach.

Litigation financing may sound unfamiliar, but the premise is simple. Outside investors help fund litigation for plaintiffs who cannot afford to bring legitimate claims against deep-pocketed adversaries.

Often, the financier receives a portion of any eventual recovery. It is not charity, nor is it sinister. It is also NOT billboard trial attorney tactics. It is capital being put to productive use in a market that sorely needs it. Anyone who has faced off against a big corporation and their high-priced attorneys knows that justice is often not a contest of facts, but a contest of resources. Litigation financing helps level the field for consumers.

SB 1396 would undermine that principle. It places restrictions on litigation funding to disincentivize investors and make capital more difficult (could we say nearly impossible?) to secure.

The result is predictable: ordinary Floridians with legitimate cases will struggle to find the support they need, while well-funded corporations will use the new procedural hurdles to fend off accountability.

Supporters of the bill insist these mandates are necessary to promote transparency. But this is transparency theater. Courts already have broad authority to address unethical behavior. Instead, this bill hands mega-corporations a new arsenal of tools to delay and derail claims before they ever reach the merits.

Conservatives should likewise be alarmed by the precedent this bill sets. We have witnessed how massive corporations have weaponized woke DEI and ESG policies against consumers and conservatives alike.

BlackRock has faced numerous consumer lawsuits over its harmful ESG policies. Large financial institutions like Bank of America have debanked conservative Americans and groups over their political and religious beliefs.

Just last week, President Donald Trump announced he is suing JPMorgan Chase after his accounts were closed following the 2020 Election. If Trump can be debanked, where does that leave ordinary Americans? Litigation financing gives consumers harmed by the abuses of woke capitalism a resource to fight back and bring accountability.

Elon Musk, seeing the need to support such cases, recently announced he would step in to fund a lawsuit brought by Dr. Eithan Haim, a doctor who was federally indicted for blowing the whistle on the Texas Children’s Hospital, which he claimed was unlawfully performing transgender procedures on children.

If conservatives are worried about exploding litigation costs, this bill makes that problem worse. It will drive up the cost of pursuing legitimate claims. Corporate defendants can absorb years of procedural sparring – a family fighting an insurance company or a small business pursuing a contract dispute often cannot. Litigation financing exists precisely to address this. If policymakers make that capital harder to access, the legal system becomes less fair and more tilted toward entrenched interests.

Florida conservatives should see this legislation for what it is: a government-mandated giveaway to large, woke corporations at the expense of ordinary Floridians and small businesses.

If Florida lawmakers really want to protect consumers, this bill is the wrong answer.

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Sal Nuzzo is the executive director of Consumers Defense.