Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.
The March 2023 repeal of Florida's one-way attorney fee statute, Fla. Stat. § 627.428, altered the economics of insurance litigation more fundamentally than any single statutory change in recent Florida history. For decades, § 627.428 was the load-bearing beam of plaintiffs' insurance practice: if an insured prevailed against the carrier, the carrier paid fees. The statute aligned carrier incentives with claim resolution and made small and medium-value cases economically viable for contingency-fee counsel. Its repeal — accomplished through a single sentence in House Bill 837 — has forced a comprehensive rethinking of case selection, litigation strategy, and fee recovery methodology.
What § 627.428 Did and Why It Mattered
Section 627.428 provided that upon adverse adjudication at trial or on appeal, an authorized insurer was liable to the insured for damages, court costs, and reasonable attorney fees. The Florida Supreme Court interpreted "prevailing party" to mean an insured who obtained a judgment greater than any offer of settlement previously tendered by the insurer. The statute applied broadly: breach of contract claims, declaratory judgment actions on coverage, UM/UIM claims, and most disputes arising under insurance policies issued in Florida.
The practical effect was to create fee pressure that aligned carrier behavior with claim merit. Carriers that low-balled or denied meritorious claims knew they faced fee exposure if the insured successfully litigated. The statute subsidized insured-side litigation and made it economically rational for counsel to take cases where liability was clear but damages were modest — say, a $30,000 property damage dispute where attorneys' fees on both sides might exceed the underlying claim.
The Legislature had already narrowed § 627.428 in 2022, eliminating it for lawsuits arising under residential and commercial property insurance policies. House Bill 837, signed March 24, 2023, repealed the statute entirely. Section 7 of the enrolled bill states simply: "Section 627.428, Florida Statutes, is repealed." The Legislature simultaneously repealed § 626.9373, the surplus lines insurer counterpart.
What Survived: § 86.121 Declaratory Judgment Fees
In conjunction with the repeal, HB 837 created Fla. Stat. § 86.121, which authorizes a court to award attorney fees to either party in an action for declaratory relief in state or federal court brought to determine insurance coverage after the insurer has made a total coverage denial of a claim. Several limitations constrain this provision:
Total coverage denial required. Section 86.121 applies only where the insurer has made a complete denial of coverage for a claim. It does not apply to partial denials, disputed valuations, payment disputes, or UM/UIM quantum disputes where coverage is acknowledged but benefits are contested.
Transfer restriction. The right to fees under § 86.121 may not be transferred, assigned, or acquired except by specified persons. This provision was aimed at assignments of benefits abuses, but it also limits fee recovery in assignment-heavy commercial contexts.
Inapplicability to property policies. Consistent with the 2022 property insurance reforms, § 86.121 does not apply to actions arising under residential or commercial property insurance policies.
Pending legislation. As of early 2025, the Legislature was considering legislation — including HB 1551 — that would create a two-way prevailing party attorney fee statute (§ 627.4275) for most insurance disputes. That bill would repeal § 86.121 and replace it with the symmetric provision. Practitioners must monitor whether and in what form that legislation passes, and its applicability date relative to existing policies.
Proposal for Settlement Under § 768.79 and Rule 1.442
With § 627.428 eliminated, the offer of judgment mechanism under Fla. Stat. § 768.79 and Fla. R. Civ. P. 1.442 has become the primary fee-shifting vehicle in insurance disputes. Importantly, HB 837 itself amended § 624.1552 to expressly provide that the offer of judgment statute applies to civil actions involving insurance contracts. This cross-reference was designed to confirm that § 768.79 fills the gap left by § 627.428.
Under § 768.79, a party who makes an offer that the opposing party rejects and then obtains a judgment at least 25% more favorable than the rejected offer may recover attorney fees from the rejecting party. The statute is symmetric: either party can use it. This means carriers can now serve proposals for settlement on insureds and recover fees if the insured rejects a reasonable offer and then recovers less.
Offer timing. Under Rule 1.442, a proposal for settlement may not be made earlier than 90 days after the action is commenced or 45 days before the date set for trial. Proposals must be in writing and must state the net present value of the settlement, whether the settlement is all-inclusive (including costs and fees), and the deadline for acceptance (no less than 30 days).
25% differential requirement. The triggering threshold requires that the judgment be at least 25% more favorable than the rejected proposal. For the plaintiff to recover fees, the judgment must be at least 125% of the proposal. For the defendant to recover fees, the judgment must be no more than 75% of the proposal.
Strategic implications for plaintiffs' counsel. The plaintiff's proposal for settlement strategy should be deployed aggressively and early. If a carrier is exposed on a clear-liability, low-complexity claim and is low-balling, a well-timed § 768.79 proposal locks in fee exposure if the carrier fails to resolve. The carrier now has symmetric exposure under § 768.79 — but so does the plaintiff if the case is overvalued. Case selection discipline is more important than ever.
Collateral consequences of the repeal. One underappreciated effect of the § 627.428 repeal is that carriers are now less economically constrained in deploying delay tactics on meritorious small and medium claims. Previously, every month of unnecessary delay added to potential fee exposure. Post-repeal, fee pressure exists only if the plaintiff serves a qualifying § 768.79 proposal and the carrier refuses it and loses badly.
Bad Faith Attorney Fee Recovery Under § 624.155
Attorney fees in bad faith actions under § 624.155 survived the repeal, with modifications. HB 837 amended § 624.155 to preserve attorney fee recovery "[i]n any insurance bad faith action, whether brought under this section or the common law, upon adverse adjudication at trial or upon appeal." Fla. Stat. § 624.155(6) (as amended). This provides a fee mechanism in mature bad faith cases, but it requires first prevailing on a bad faith claim — a higher bar than a simple breach of contract action.
The practical implication is that the fee question has migrated downstream in the litigation. Counsel who previously could recover fees by proving breach of contract must now either (a) invoke § 86.121 in total-denial declaratory judgment cases; (b) use § 768.79 proposals strategically; or (c) develop and pursue bad faith claims that trigger § 624.155 fee recovery. This restructuring front-loads case-selection decisions in ways that require counsel to evaluate bad faith exposure early.
Sanctions Under § 57.105
Section 57.105 provides for attorney fees against a party and its counsel where claims or defenses were not supported by the material facts or by the application of then-existing law. Carriers that maintain frivolous coverage defenses are potentially exposed under § 57.105 regardless of the § 627.428 repeal. The 21-day safe harbor built into § 57.105 requires counsel to give pre-motion notice; carriers that withdraw baseless defenses within the safe harbor avoid sanctions.
For plaintiffs' counsel, § 57.105 is a secondary mechanism best reserved for cases where the carrier's conduct in litigation — not merely its pre-litigation claims handling — is demonstrably unsupported. Overuse of § 57.105 motions against carriers pursuing arguable defenses generates reciprocal exposure.
Case Selection and Economics Post-Reform
The § 627.428 repeal fundamentally changes the denominator calculation for contingency-fee insurance practice. Under the old regime, a $40,000 policy dispute that required $60,000 in attorney time was viable because the carrier absorbed the fees on a win. Without a fee-shifting backstop, cases must stand on their own merits.
The post-reform economics favor:
Large damage cases. Cases where the underlying damages are substantial enough to support contingency fees without fee-shifting remain viable. These are often the same cases with bad faith potential — where policy limits are dwarfed by actual damages.
Bad faith actions. Cases where carrier misconduct rises to the level of § 624.155 bad faith generate both excess damages and attorney fees. The § 627.428 repeal effectively raised the minimum viable insurance dispute to cases with bad faith potential.
Declaratory judgment total-denial cases. Where coverage is completely denied and § 86.121 applies, there remains a fee hook. These cases — coverage opinion disputes, exclusion contests, late-notice denials — are more attractive post-reform.
§ 768.79 arbitrage. Cases where the merits are strong, the damages are reasonably quantifiable, and a proposal for settlement will force the carrier to either pay or face fee exposure. This requires internal damage quantification at the outset rather than at trial prep.
The repeal has also affected referring counsel economics. Cases that previously were economically viable for referral — routine first-party disputes where the policy limits were modest — now require careful vetting. The referring firm and receiving firm must align on whether the case has § 768.79 potential, bad faith potential, or § 86.121 potential before engaging.
The CRN as a Pre-Litigation Fee Mechanism
In the bad faith context, a well-drafted Civil Remedy Notice serves not only as a statutory predicate but as a fee-generation mechanism if the carrier fails to cure. Counsel who have developed meritorious first-party bad faith claims should consider the CRN as both a litigation trigger and a fee recovery vehicle, understanding that the § 624.155(6) fee provision attaches upon adverse adjudication in the bad faith proceeding.
Conclusion
The § 627.428 repeal created a fee vacuum that Florida law has partially filled through § 86.121, § 768.79, § 624.155(6), and § 57.105 — but only partially. The tools that remain require either a total coverage denial, a qualifying proposal for settlement, or a successfully prosecuted bad faith claim. Plaintiffs' counsel navigating this landscape must combine rigorous case selection with aggressive early use of the proposal-for-settlement mechanism and a disciplined approach to developing bad faith claims wherever the carrier's conduct warrants it.
Talk to Yates Anderson
If you are litigating a matter in this area — or weighing whether to — the working analysis above only goes so far. Request a case evaluation and a Yates Anderson attorney will respond within one business day.
Informational only. Not legal advice. No attorney-client relationship is created by reading this post. Consult a licensed attorney in your jurisdiction.