Florida Lawmaker Want to Cap Appeal Bond Amount

Florida Lawmakers Want to Cap Appeal Bond AmountsAppeal bonds can be so costly for businesses, So florida lawmaker want to cap appeal bond amount. The cost of an appeal bond is a percentage of the amount of the bond, which is based on the money judgment. When tobacco companies face hundreds of millions of dollars in judgments, the cost for an appeal bond is going to increase. Some businesses make the convincing argument that the cost to appeal limits the ability to appeal a ruling.

Florida put a $50 million hard cap on appeal bonds, for companies with more than 400 employees, during the 2006 legislative session. State Senator Tom Harman is working on legislation to decrease this cap with new legislation. Harman says Senate Bill 1478 would make the following changes:

“Current law requires defendants to post 150% of a judgment to have an appeal heard. In an era of billion-dollar verdicts, businesses are forced to settle rather than go into bankruptcy fighting a judgment they believe is in error. SB 1478 would place a $25 million dollar cap on the amount a defendant must post in order to stay a judgment and appeal a verdict. For small businesses the requirement is limited to $1 million.”

Big tobacco companies have been lobbying for such changes even before they were hit with 9,000 lawsuits in 2009. And while lobbying may conjure up negative images of people with money getting their way, there is some validity to this concern. Over the past two decades, the amount of money judgment awarded against companies, both big and small, have increased substantially. If the process of appeal is limited because of bond cost, that issue should be discussed.

What do you think about placing a cap on appeal bonds? Leave a comment on the blog or email us to tell us your thoughts about appeal bonds in Florida.

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