Tag: Tampa Business Lawyers

While new technology is expected to solve a number of our problems–from reducing human error to growing the global economy–it is also expected to have a significant effect on corporate liability, commercial litigation, insurance litigation, and product liability claims. As the industry grows in complex technology, companies and insurers need to make sure that they consult the right attorneys so that they ensure that their claims processing is up-to-date because, as cyber risk liabilities increase, so too does liability for manufacturers, suppliers and providers.

Take, for example, liabilities surrounding cyber security and the increasing digitalization of society: liability and litigation is becoming more and more complex and technical, especially as data protection rules become stricter and carry stiffer penalties in response to governments trying to bolster cyber security and protect privacy. An accident no longer involves just two people, but manufacturers, software providers, and other third parties, all requiring that insurance claims handlers and other experts understand specific algorithms involved in order to determine the cause of accidents.

One of the hardest hit areas near Irma’s landfall was Goodland, Florida, where the hurricane not only damaged properties, but permanently “condemned” several businesses, including several local restaurants. As a result, many businesses now have to look for new locations, and some are even collecting donations to rebuild in the community.

While many Floridians have committed themselves to helping some of their favorite establishments reopen by donating funds, many others wonder why these restaurants are facing hard times like these, given that all of them had insurance policies. Isn’t rebuilding as simple as filing an insurance claim?

Many who suffered damages from the recent storms felt that they had done their due diligence by having homeowners or windstorm coverage, as well as flood insurance.

However, having the insurance is just the beginning: filing the claims can turn into a full-time job, as business owners find themselves having to document every single loss and trying to negotiate fair settlements. Trying to do so with the assistance of an insurance attorney can inevitably spell lower payouts and difficulty getting back on your feet again. In addition, many restaurant businesses found that there were thousands of dollars in food costs that were not covered by insurance.

Many are concerned about the new arbitration rule issued by the Consumer Financial Protection Bureau, which is set to go into effect in September. The rule would prohibit consumers from agreeing to use arbitration to remedy any disputes they have with credit card companies and banks.

As a result, in July, the U.S. Senate Committee on Banking, Housing, and Urban Affairs announced that it will file a Congressional Review Act Joint Resolution of Approval in the Senate, disapproving of the rule. Florida Senator Marco Rubio is one of the original co-sponsors of the resolution expressing disapproval.

Arbitration Clauses in Consumer Contracts

Banks and other financial firms typically include language in consumer contracts blocking individuals from filing class action lawsuits and instead funneling any disputes over credit cards and similar accounts into private arbitration. In this context, arbitration tends to be more cost-efficient and often deters people from filing frivolous lawsuits against credit card and banking companies.

On May 22, 2017, the U.S. Supreme Court made a unanimous decision that is being hailed by large technology companies and other patent holders, who have arguably been victimized over the years by what are known as “patent trolls,” or smaller companies that purchase patents only in order to demand royalties and sue for damages (instead of using those patents, for example). This particular type of activity was significantly interfering with the ability for these businesses to effectively run their business models.

Companies referred to as “patent troll” companies would allegedly target very specific courts in which to sue for damages—a practice known as forum shopping—because these remote federal courts had a reputation for friendliness towards plaintiffs, or the suing party. For example, more than 40 percent of all patent lawsuits were filed in federal court in East Texas, even though no major manufacturers are based there. As a result, one judge oversaw about a quarter of all patent cases filed nationwide.

The Eleventh Circuit (which includes Florida) recently confirmed a rule early codified into contracts law known as the Economic Loss Rule, which prohibits a plaintiff from recovering under a torts-based claim (such as a claim for negligence) when a product defect fails to cause personal injury or property damage.

Although the Florida Supreme Court had previously strengthened the scope of the Economics Loss Rule, this recent case brought before the Eleventh Circuit demonstrates that parties still attempt to hold manufacturers and other businesses responsible for negligence when it is clear that contract law bars such a claim. Because of this risk, it is wise for businesses to build specific safeguards into legal contracts in order to avoid certain disputes.

The Economic Loss Rule

The Economic Loss Rule has long-prevented parties from bringing a tort claim when a product defect or failure only causes damage itself (i.e. results in economic loss) but does not cause harm or injury to an individual or their property. When this happens, any party who wishes to sue a manufacturer or business must sue under breach of contract, but not under product liability claims.

On January 13th, the U.S. Supreme Court agreed to hear a case that could have national, broad implications for all employers and businesses, especially those who utilize employment contracts to mandate that any disputes be raised via arbitration rather than in court, and on a one-by-one basis (i.e. the opposite of class action). The decision will also affect countless other businesses, as not only are arbitration clauses present in many employment contracts, but also in many service- and various consumer-based contracts, such as those for nursing homes, cell phones, credit cards, and others.

Some experts predict that the Court will uphold the ability for private companies to establish this kind of requirement in employment contracts, not only because that is in accordance with the general freedom to contract, but also because the Court already ruled (in 2011) that the Federal Arbitration Act favors arbitration and allows companies to set these types of limits (see AT&T Mobility v. Concepcion).