Balancing Protections for Vehicle Owners and Towing Companies in Florida's Towing Legislation
Introduction
Vehicle towing and storage legislation must walk a fine line between protecting the rights of vehicle owners and ensuring that businesses performing services are timely paid for their work. On June 1, 2023, Florida passed HB 179, which tried to strike this balance by introducing a process for the posting of bonds for vehicle releases.
Protecting Vehicle Owners' Rights
Vehicle owners find themselves in difficult situations when their vehicles are towed, regardless of whether it is towed from a parking lot or after a crash. The immediate goal of every vehicle owner is to secure the release of the vehicle as quickly as possible after a tow. The Florida bill permits vehicle owners, their insurers, or lienholders to post a bond to secure the immediate release of their vehicle without waiting for a court case to conclude. This bond must be equal to the accrued charges for towing, storage, and any other related fees.
Once the bond is posted, the clerk of the court issues a certificate notifying the towing company or vehicle storage facility. Once this certificate is issued, the vehicle must be released and the bond remains in place to secure payment. This system is designed to ensure that vehicle owners can reclaim their vehicles promptly, thus reducing the inconvenience and potential financial strain of an extended storage period. However, like any legislation, it is not perfect.
Ensuring Timely Payment for Towing Services
From the perspective of towing businesses, receiving timely payment for services rendered is the paramount concern. Towing and storage companies incur significant costs at the time of service—fuel, insurance, repairs and maintenance, labor, equipment usage, payments on financed vehicles, and storage space, just to name a few. The Florida bill seeks to address these concerns by allowing towing companies to secure a bond that guarantees eventual payment.
However, while the bond serves as a financial security to ensure payment, it does not immediately translate into cash flow for the towing business. Under the Florida bill, if no judicial proceeding is initiated within 45 days of the bond posting, the bond can be released to the towing company to cover the accrued charges. This introduces a delay that the towing business must endure, carrying the operational costs in the interim. Even with the bond in place, towing companies face a waiting period that can strain their finances, especially if the judicial proceedings are prolonged. Finally, given that most storage facilities across the state work based on the accrual of storage fees on a daily basis, a question as to how quickly the certificate will be issued and how much time will pass before the storage facility is notified.
Judicial Hearing Timeline
The Florida bill states that judicial proceedings can be initiated in certain timelines. However, there is no specific deadline for when this hearing must be held. This lack of a defined timeline for the hearing can result in additional delays, further impacting the financial stability of towing companies who must cover their service costs while awaiting judicial resolution.
Awarding Attorney's Fees
An important aspect of the bill is the provision that allows the prevailing party in the judicial proceeding to be awarded attorney's fees. This provision ensures that the party who successfully contests or defends the charges can recover the legal costs incurred during the process, providing a measure of financial relief.
Competing Interests and Legislative Balance
The Florida bill highlights the ongoing challenge of balancing the rights and interests of vehicle owners with those of towing service providers. On one hand, vehicle owners benefit from a system that allows for the rapid return of their vehicles through bond posting, reducing the potential for prolonged inconvenience and financial hardship. On the other hand, towing businesses are assured eventual payment but must navigate the financial burden of carrying service costs while awaiting judicial resolution.
Room for Additional Improvement, Lessons for Texas
To better balance these competing interests, potential amendments could include:
Expedited Hearings:
Introducing a set deadline for hearings, such as within 30 days of bond posting, could help reduce the waiting period for towing companies and ensure quicker resolution of disputes.
Cash Bond for Smaller Cases.
Dealing with a non-cash bond can result in additional delays in payment processing. If possible, a court should consider whether a cash bond should be posted in order to keep this process streamlined. Higher value cases such as heavy duty crash recoveries could be evaluated on a case-by-case basis.
Interim Payments or Hybrid Bond System:
Allowing for interim payments to towing companies during the judicial process could help alleviate the financial burden of operational costs incurred at the time of service, particularly when the vehicle has been already released.
Expedited Alternative Dispute Resolution.
If all parties agree, the Court should have the ability to order an early stage mediation. Unlike other forced mediation bills that have been discussed in this industry, the agreement of the parties should be required and costs of mediation should be recoverable by the prevailing party.
Conclusion
The Florida Bill represents a legislative approach that seeks to find a compromise between the need for access to a person’s vehicle and the rights of the business owner. Nonetheless, the inherent delays in such a system show that these early solutions need work.
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