A coalition of businesses wants lawmakers to revisit the issue

By Kim MacQueen
Associate Editor

Workers’ compensation attorneys are celebrating a landmark Supreme Court decision that overturns a Florida law severely limiting attorneys’ fees for claimants in workers’ comp cases.

The 2003 Workers’ Compensation Act stipulates that all legal fees for attorneys representing injured workers be capped at a percentage of the benefits awarded to the client, and makes it a felony for the client to pay more. Conversely, fees to defense attorneys representing insurance companies face no such cap.

When Emma Murray, a health- care worker who sustained injuries lifting a patient, underwent a total hysterectomy, her workers’ compensation provider declined coverage, citing a pre-existing condition. Murray hired attorney Brian Sutter to represent her before a judge of compensation claims, who awarded her $3,200 in benefits. Sutter, who had spent more than 80 hours on her case, was awarded just under $700, or roughly $8 per hour. Mariner Health/ACE USA paid its own defense counsel approximately $16,000 to fight the claim.

“The law had a devastating impact on our ability to represent injured workers,” said Paul Anderson of Tallahassee, who serves on The Florida Bar Workers’ Compensation Law Section Executive Council and as an executive officer for the Florida Justice Association. He said while workers’ compensation claims made up 100 percent of his practice before the 2003 law went into effect, that percentage was down to less than 50 by this year.

“We’ve had to take cases with an eye toward, ‘Can we afford to do this?’” Anderson said. “The Supreme Court decision allows us to re-engage in the practice of representing injured workers.”

In its unanimous October 23 decision to overturn Murray v. Mariner Health/ACE USA, the court ruled that language in the 2003 law regarding plaintiff attorneys’ fees is ambiguous, and that “we have determined that reasonable attorney fees for claimants, when not otherwise defined in the workers’ compensation statute, are to be determined using the factors of Rule 4-1.5(b) of the Rules Regulating The Florida Bar.”

The court ordered Mariner Health to pay Murray’s attorney $16,000, or $200 per hour, for work on her case.

“If the defense attorney is paid an hourly fee and there is no restriction on that, then how is it reasonable to confine payment for the claimant attorney?” asked Christopher Smith, also a section member and president of Florida Workers Advocates.

Smith and Anderson both noted that the law created an unfair playing field; it also “really created no incentive whatsoever for the insurance company to voluntarily pay the benefit in the first place. If they know that it doesn’t matter how long it’s denied, if they can litigate and litigate and litigate and delay and delay and delay . . . what’s the point in ever paying it?” Smith said.

Florida Bar Workers’ Compensation Law Section Chair-elect Richard Chait lauded the Supreme Court’s decision.

“This is one of the most important cases that has ever come down from the court for us as a section,” Chait said. “We as an executive council must remain grounded and vigilant in our efforts to protect the litigants and their access to court.”

Florida business interests reacted quickly to Murray, which they argue will result in increased insurance costs and result in a crisis.

“We did this 2003 law because Florida was at the top of the list, in terms of cost for workers’ comp insurance, of the country,” said Barney Bishop, president of Associated Industries of Florida. “Since the law, insurance rates have gone down, and we have saved employers $3 billion. So the key issue here is that we’ve made businesses in Florida competitive again.”

AIF is part of a coalition of business organizations vowing to fight increased insurance rates in the Legislature, either in the regular session in Spring 2009 or a special Fall 2008 session.

“This is just another example of plaintiffs’ trial lawyers attempting to bleed more attorney fees from Florida employers using our state’s workers’ compensation system,” noted Florida Chamber of Commerce Vice President of Government Affairs David Daniel in a prepared statement. “Unless corrected, this decision means employers will face higher workers’ compensation rates and an added financial burden to the cost of doing business in our state.”

Chait responded that even before the 2003 caps, claimant’s attorneys’ fees represented less than 6 percent of the overall cost of the workers’ compensation system.
Additionally, he said, “The 2003 law was designed to be self-executing — on paper there is no reason an injured worker ever has to hire me. When cases are denied, an injured worker must file a Petition for Benefits that provides the insurance company with required and attached documentation, and that petition is approved by a judge of compensation claims — and that petition has to adhere to very stringent standards or it will be dismissed. Then the insurance company has 30 days from the time they open the envelope to pay the requested benefit, and if they do there is no reason they would ever have to pay an attorney’s fee.”

But Chait, Smith, and Anderson all testified to the fact that filing requirements are so rigorous under the 2003 law — often requiring doctor’s examinations and recommendations that injured workers must pay for themselves in advance — that it is nearly impossible for many of them to navigate the workers’ comp system alone. Insurance rates have gone down, they argue, on the backs of those workers.

“The rates are reduced because injured workers aren’t getting the benefits they would be receiving otherwise. Insurance companies aren’t paying the benefits because there has been no one to hold their feet to the fire,” Anderson said. “We’re finding that many of them are turning to public assistance. They can’t get the help they need to fill out workers’ comp petitions, but there is help available in the form of state-funded assistance to fill out Medicaid forms. The insurance companies are just shifting the burden to the taxpayers of Florida.”