Florida law limiting attorney fees in Worker Comp. cases to be heard by Fla. Sup. Ct. and may set precedent

“By severely limiting the fees available to a claimant’s counsel … and imposing no limits on fees paid by an employer/carrier to defend a claim, the statute denies equal protection to injured employees.?
 March 3, 2008  Ledger.com
AUBURNDALE | Business owners, hang on to your wallets. Workers’ compensation rates may go back to the bad old days before the Florida Legislature overhauled the Florida Workers’ Compensation Act in 2003. At that time, workers’ compensation insurance premiums were the second-highest in the nation.
Since the overhaul, they have fallen to 45th, according to the 2007 Workers’ Compensation Annual Report, issued Jan. 1 by the Florida Office of Insurance Regulation.

In October, Florida Insurance Commissioner Kevin McCarty announced an 18.4 percent decrease in workers’ compensation premiums, the fifth consecutive annual decrease, creating an average cumulative drop of 58 percent since the overhaul.

A case now before the Florida Supreme Court could overturn a section of the revised law that strictly limits lawyers’ fees to a percentage of any compensation award. The limit applies to the total amount the lawyer may collect, not just the amount that the insurance company must pay if it loses the case. The claimant may not make up the difference.

“This is a huge case,” says William Large, president of the Florida Justice Reform Institute, an organization spawned by the Florida Chamber of Commerce. “A case of this magnitude gets to the Supreme Court once in about every five years.”

A major problem with the workers’ comp system before 2003 had been the ability of a claimant’s attorneys to collect fees that amounted to several times the value of the claimant’s award. A section of the law set a formula for attorneys’ fees based on a percentage of the amount of the claim, but permitted the Office of the Judges of Compensation Claims – which determines the amount of any award – to deviate from the formula if a compensation claims judge found the statutory guideline to be “manifestly unfair.”

In 2003, the legislature removed that discretionary power from the OJCC; attorneys’ fees had to be based on a percentage of the award. The law took effect Oct. 1, 2003.

On Oct. 31, 2003 Emma Murray was injured on the job and her employer’s carrier contested her claim for workers’ compensation, alleging a pre-existing condition. A JCC hearing found in Murray’s favor and awarded her $3,244.21 for lost time, medical expenses, interest and penalties.

Murray’s attorney then filed a petition to deviate from the percentage formula and asked for fees based on 84.4 hours at $200 per hour, or more than $16,000. Instead, the JCC awarded him $648.84, or 20 percent of the amount won by Murray.

The attorney argued that the percentage-based fee would equate to an hourly fee of $8.11, a rate to which no attorney would agree. Attorneys for other claimants and carriers supported the attorney’s claim. Even the claims judge said 80 hours at $200/hour would have been reasonable under the old statute but he lacked the jurisdiction “to address the claimant’s constitutional challenge” and denied the petition.

Murray, claiming a right to pay her attorney the higher fee, appealed to the First District Court of Appeals, lost and was denied a rehearing on Jan. 12, 2007. She appealed to the Florida Supreme Court and, in a move that “stunned the workers’ compensation insurance industry,” according to WorkersCompensation.com, the high court agreed to hear the case.

Most of the points raised in her appeal turn on arcane legal issues but some give pause for thought. Among those:

Murray claims that even if the legislature has the right to regulate the amount of legal fees that can be “shifted” to the insurance carrier, it does not have the right to limit how much she pays. An Amici Curiae (“Friends of the Court”) brief from the Florida Justice Reform Institute and several trade associations asks if she is demanding the right to pay $16,000 to gain $3,244.21, leaving her with a debt of more than $12,000.

An amicus brief filed by Florida Workers’ Advocates, which identifies itself as “a statewide organization composed of attorneys who represent the interests of injured employees in workers’ compensation proceedings,” points out that “Section 440.34, Fla. Stat. (2003) creates a distinction between employees and employer/carriers as litigants in workers’ compensation proceedings. By severely limiting the fees available to a claimant’s counsel … and imposing no limits on fees paid by an employer/carrier to defend a claim, the statute denies equal protection to injured employees. There is no rational basis for this discriminatory classification.”

Another claim by Murray is that the limit on lawyer’s fees restricts her access to the courts. The FJRI brief cites a flat declaration by the First District Court of Appeal in 2000 that a claimant “has no constitutional right to counsel in a workers’ compensation proceeding.” The brief also points out numerous ways that the state provides free assistance in presentation of workers’ compensation claims, including the statutory Employee Assistance and Ombudsman Office.

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