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96 | INFLUENCE WINTER 2016 Even so, a nearly $38,000 fee for winning about $823 in benefits doesn’t sit right with business and insurance leaders. In the view of the courts, the legislative intent for the cap is flawed. Pariente says it was to eliminate excessive fees, which may not have been the initial goal. The original intent was to remove incentives for lawyers to file unreasonable and arguably frivolous claims just to create attorney’s fees because the system allowed a judge of compensation claims to award fees with no relationship to benefits secured. Attorneys simply filed claims to play an economic game when the only support may be the lawyers’ thoughts (e.g., the claimant needs to see a psychiatrist even though no evidence supports that) — cheaper to pay the claim and litigate — economic roulette. Lawyers benefited by insurers denying claims — that’s the game and that’s why claim costs in Florida were 40 percent above the national average. Furthermore, since Castellanos, insurers report the reopening of old claims, increased attorney involvement and higher hourly fees, plus more challenges involving minor disputes, says the NCCI. The fear is that, attorney fees aside, the ruling encourages employers and insurers to OK unwarranted benefits to stave off litigation, driving up insurance costs. Bill Herrle, Florida director for the National Federation of Independent Business, serves on a separate workers’ compensation task force organized by Associated Industries of Florida. He said responsible business owners want to pay what they owe to injured workers — no less, but certainly no more. “We all agree that we need to have some cap on attorney fees,” Herrle said of himself and his colleagues on the AIF task force. “There is a broad consensus that usual and customary attorney fees will, over a couple of years, break the system. We’ll see double-digit increases like we saw this year for several years into the future,” he said. Before HB 50-A, Florida had the highest contingency cases, workers’ compensation or otherwise. The bill does not expressly say the fees don’t have to be reasonable. In Castellanos (delivered April 28) and Westphal v. City of St. Petersburg (June 9), the Supreme Court ruled Florida’s workers’ compensation system had become so heavily weighted against workers, it violated their access to the courts, and therefore the Constitution. “The workers’ compensation system has become increasingly complex to the detriment of the claimant, who depends on the assistance of a competent attorney to navigate the thicket,” Justice Barbara Pariente wrote for a 5-2 majority in striking down the fee cap. The court noted the plaintiff’s attorney in Castellanos needed more than 107 billable hours to secure $822.70 in benefits that his client had been unfairly denied, in the view of a judge of compensation claims. Under the fee cap, he was entitled to less than $165 — an hourly rate of about $1.53. Yet his work was both “reasonable and necessary,” the claims judge concluded. However, some of the facts suggest the case was not merely over $822 in benefits. Overlooked by some was the fact the claimant was at fault for a fight on the job in which he was injured, not covered under the workers’ compensation statute. Subsequent litigation was over much more significant issues; but as an unfortunate luck of the draw, the only benefits in question were $822. On the other hand, if the situation warranted $300,000, or could be turned into that amount, the same litigation would have garnered a fee of more than $30,000. Calling the case for what it is — the claimant now has a potentially lifetime open claim. “The Legislature has created an irrebuttable presumption that every fee calculated in accordance with the fee schedule will be reasonable to compensate the attorney for his or her services,” Pariente wrote. “The $1.53 hourly rate in this case clearly demonstrates that not to be true.” But the Legislature did not create such a presumption; the concept was infused by the court. While the decision entitled the attorney to bill at his usual fee of $350 per hour, or $37,520, there is no usual, customary rate in workers’ compensation cases — an idea perpetuated by attorneys. In reality, all actions are taken on contingency. In Westphal, too, the court documented a history of diminished rights for employees. Temporary total disability eligibility, at issue in the case, had been reduced from about six-and-a-half years to five to two, the court noted. Employers and insurers enjoy the exclusive right to choose a treating physician (which always has been the case in Florida). Since 1970, workers cannot opt out and go to court, making it harder to prove the injury was the major contributing cause of disability. Workers face medical copayments of only $10 for any visits after the injured worker reached the point of maximum improvement from medical treatment for injuries, but not before then. The court majority saw the trend as unfair. “There must eventually come a tipping point, where the diminution of benefits becomes so substantial as to constitute a denial of benefits — thus creating a constitutional violation,” Pariente wrote for the five-justice majority in that case. She called the system “fundamentally and manifestly unjust.” What is important to note is that Pariente’s comments are a non-binding opinion; the court has never found the overall workers’ compensation statute unconstitutional, with a single exception of the violation of the single subject rule. The Westphal ruling struck down a two-year cap on temporary permanent disability payments — paid while the worker still seems likely to recover enough to eventually return to work. If that time runs out before that happens, the employee can lose financial support while still unable to earn a living. The court has yet to find the overall statute unconstitutional, either in Castellanos or Westphal. “The statute cuts off a severely injured worker from disability benefits at a critical time, when the worker cannot return to work and is totally disabled, but the worker’s doctors — chosen by the employer — deem that the worker may still continue to medically improve,” she wrote. And that, she continued, is no “reasonable alternative to tort litigation.” The Castellanos court pointed to an additional inequity: During the 2002-03 fiscal year, plaintiffs and defense attorneys in these cases split total fees roughly 50:50. By 2012-13, the split was approximately 36:64. Furthermore, the schedule still can produce excessive plaintiff’s fees, the court said. “The fee schedule does nothing to adjust fees downward when the recovery is high, even if the time required to obtain significant benefits was relatively minor and the resulting fee is actually excessive,” Pariente wrote. policy note { WORKERS’ COMP Simpson PHOTO: Mark Wallheiser Photography


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