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Claimant attorneys may accept fees from clients in WC cases

Senior Editor Regular News

Claimant attorneys may accept fees from clients in WC cases

Senior Editor

While the Supreme Court was striking down a fee schedule in the workers’ compensation law for underpaying claimants’ lawyers, the First District Court of Appeal was tossing another provision of the same statute for preventing injured workers or third parties from directly paying claimants’ attorneys.

On April 20, a three-judge panel struck down a section of the law, enacted in 2009 by the Legislature, that made it a misdemeanor for a claimant’s attorney to accept any compensation except what was specified in the workers’ comp law. The court said that violated the worker’s First Amendment rights and right to contract, among other violations.

That decision came eight days before the Supreme Court issued its ruling on the rate schedule for determining fees for successful claimants’ attorneys. The Supreme Court, in a footnote, took notice of the First DCA ruling and added that specific issue was not before it. (See story, page 1.)

Tampa attorney Michael J. Winer who represented claimant, police officer Martha Miles, in the First DCA case (and was co-counsel in the Supreme Court case) said the law places workers with relatively minor injuries at a disadvantage, especially if the employer/carrier vigorously contests the claim.

“This case is hugely significant. Because workers’ compensation is the only area of law where the lawyer and client can’t reach an arm’s length transaction to pay a reasonable fee for services,” Winer said. “The decision corrected a significant imbalance of power. The workers’ compensation carrier can pay its lawyers what it pays. The claimants can’t do that. Lawyers were turning down cases.”

The case involved a police officer who claimed she was sickened when exposed on the job to chemicals related to methamphetamine production. She filed a second claim after being exposed another time to “an intense smell” that interfered with an investigation she was pursuing. The officer filed workers’ comp claims in both instances and both were denied by the employer/carrier (E/C).

The officer then sought to pursue a claim before a judge of compensation claims and signed a retainer with a law firm where her union agreed to pay the first $1,500 of the fee and after 15 hours the officer would pay an hourly rate. The retainer acknowledged that arrangement was contrary to the workers’ compensation law and the officer signed a waiver from the fee restrictions in the law.

The E/C challenged the retainer and the claimant’s attorney argued he would be unable to pursue the case without the retainer because of the difficulty in pursuing such cases and because “exposure” cases required a clear and convincing standard of proof. The judge nonetheless rejected the retainer. The lawyer withdrew and the officer pursued the case on her own, but ultimately lost. The claimant also provided affidavits from several law firms indicating they would not take such a case under the fee structure in the state statute.

Judge Bradley Thomas wrote the opinion for the First DCA panel and found the law violates the First and 14th amendments’ right to hire an attorney as well as a person’s right to enter into a contract.

“[S]ix attorneys averred they would not be able to take this case on a contingency basis under the current statutory scheme, where a fee is paid only if the prosecution of the claim is successful. The. . . evidence persuasively supports Claimant’s argument that sections 440.105 and 440.34 thwart her First Amendment rights, which can be adequately exercised only by obtaining legal representation,” Thomas wrote. “.. . . [T]he interest in regulating attorney’s fees under the guise of protecting the amount of benefits secured by an injured worker against unreasonable attorney’s fee payments, or of protecting the body of workers’ compensation benefits from depletion, was not and could not be implicated if securing any benefits was effectively prevented by Claimant’s inability to secure counsel.”

He also noted that a claimant would be better off if he or she prevailed even if the state-mandated fees didn’t cover the out-of-pocket costs because the claimant would receive some benefits and would not be liable to a claim for costs by the other side.

Thomas found, in addition, the law did not meet the strict scrutiny standards for regulating First Amendment rights and improperly infringed on the right to contract. He said that restriction could result in public harm as an injured worker unable to collect benefits through the workers’ compensation system might be forced to turn to publicly financed governmental benefits instead.

“Finally, application of the statutes to this scenario is arbitrary and capricious, because only the attorney’s fees paid to claimants’ attorneys are regulated, and E/Cs are free to contract for legal services without limitation,” Thomas wrote.

He went on to note that the Florida Supreme Court allows citizens to waive their rights under a constitutional amendment, passed several years ago with the support of the medical community, limiting contingency fees in malpractice cases.

“Logically, then, if a person can waive constitutional rights, a person can also waive statutory rights such as those in section 440.34, Florida Statutes,” Thomas said. “Likewise here, we see no reason why a workers’ compensation claimant should not be able to waive a limitation on claimant attorney’s fees and agree to pay her attorney with her own (or someone else’s) funds subject to a JCC’s finding that the fee is reasonable.”

Winer said the decision will help workers with union support or with some resources of their own to pursue such cases. He said employers and carriers still know aggressively defending a case where only a small amount of benefits is at stake will discourage many injured workers.

“To a guy injured on the job making minimum wage, a couple thousand bucks makes a difference,” he said. “[The decision] solves the problem for the person who may have the ability to pay; it solves the problem for someone who has a union or someone else willing to pay. It doesn’t solve it for other workers who don’t have that ability. Lawyers can’t take those cases. You know you’re working for a fee that will be only a couple hundred bucks but you know you’re going to have to put in 50 to 60 hours. It puts lawyers in an ethical conflict with their clients.”

Asked about appealing the decision, Kylie Mason, press secretary for Attorney General Pam Bondi, referred to the AG Office’s petition to intervene in the case at the First DCA. That petition cited the constitutional challenge to a state statute as justification for intervening and asked the court to wait until the Supreme Court decided Castellanos v. Next Door Company, which questions the constitutionality of the attorney fee structure in the workers’ comp law and which the court did decide eight days later.

“We are considering our options at this time,” Mason said, after the First DCA ruling.

The ruling came in Miles v. City of Edgewater, case no. 1D15-0165.

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