Defense Counsel’s Billing Records Are Discoverable When an Insured Seeks Payment of Attorney’s Fees for Bad Faith

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While one may expect that an insurer opposing an award of attorney’s fees to a plaintiff in bad faith litigation would be entitled to review the billing records of the plaintiff’s attorney, the Florida Supreme Court has ruled that an insurer’s defense counsel’s billing records are discoverable by the plaintiff.

In Paton v. GEICO General Insurance Company, the plaintiff insured asserted a bad faith claim against her UM insurer and sought recovery of attorney’s fees. To support the reasonableness of her attorney’s fees, she sought discovery of defense counsel’s billing records for services related to defending the bad faith claim.

The insurer objected to the request, relying on Florida precedent that required a party seeking an opposing party’s billing records to show that the information is actually relevant, necessary, and that its substantial equivalent cannot be obtained from another source. The trial court disagreed, and ruled that billing records were discoverable, although privileged information in the billing records could be redacted. On appeal, the intermediate appellate court sided with the insurers, stating that defense counsel’s billing records were only “marginally relevant” to the question of whether the plaintiff’s attorney’s fees were reasonable.

The case was appealed to the Florida Supreme Court, which ruled in the plaintiff’s favor. Florida cases have allowed disclosure of an opposing party’s billing records in conjunction with determining the appropriate contingency fee multiplier in the calculation of fees. Therefore, the court declared that billing records of opposing counsel are indeed relevant to the issue of reasonableness. Specifically, the court stated, “[t]he hours expended by the attorneys for the insurance company will demonstrate the complexity of the case along with the time expended, and may belie a claim that the number of hours spent by the plaintiff was unreasonable, or that the plaintiff is not entitled to a full lodestar computation, including a multiplying factor.”

The Paton decision means that attorneys defending insurers in Florida bad faith claims cannot assume that their billing records will not be subject to discovery. Although privileged information contained in billing records will remain confidential, counsel should assume that records will be discoverable in a dispute over the reasonableness of plaintiffs’ counsel’s fees and that both their adversary and the judge may be reviewing their time records.