L-R: Liz Reynolds, Anna Cam Fentriss and David Graham.

A new Florida law to curb alleged fraud by contractors could create collateral damage for lawyers by slashing attorney fees in insurance litigation — and all just in time for hurricane season.

Before May 23, contractors could enjoy a one-way attorney fee privilege. It meant win or lose, they wouldn't be liable for attorney fees if they sued an insurer to collect insurance benefits that homeowners had assigned to them in exchange for doing repairs.

Insurers, meanwhile, weren't entitled to fees — until Florida Gov. Ron DeSantis signed House Bill 7065 into law.

The former David-and-Goliath-esque statute was designed to look out for the policyholder, considered to be at a disadvantage compared with high-powered insurance professionals with corporate counsel and significant funds in their arsenal.

But critics—led by pro-insurance groups—cried foul. They claimed the statute had exacerbated abuse through inflated repair costs and excessive lawsuits over assignment of benefits, or AOB, which were created to speed up repairs, shield consumers from exploitation and save them from having to chase claims.

Now, under the new law, homeowners can still use the one-way statute to file lawsuits against insurers, but they can't transfer that right to contractors through AOB agreements—a provision that critics says disincentivizes contractor attorneys.

And there's another change: The law includes a new formula for third-party cases to decide which side, if any, is entitled to attorney fees after a judgment.

'No guard rails'

Tallahassee attorney Anna Cam Fentriss represents licensed contractors through the Florida Roofing and Sheet Metal Contractors Association and Florida's Association of Roofing Professionals and was glad of the change. Fentriss feels that while a homeowner, or “the little guy,” typically needs less risk in litigation against giant companies, there's no reason contractors couldn't duke it out.