Florida High Court Eases Curbs On Comp Attorney Pay

Yesterday, the Florida Supreme Court gave state compensation claims judges greater latitude in awarding attorney’s fees to claimants by striking down strict limits on potential awards.

In the case of in Murray v. Mariners Health/ACE USA, the court found that the use of strict guidelines as outlined in the state statue would have awarded the claimants attorney’s a total of $684.84 for their work on the case, which averaged out to $8.11 an hour for roughly 80 hours of work.

The attorneys challenged the award, arguing that the going rate for lawyers in the area for cases of that nature would be roughly $200 per hour. In its decision, the Supreme Court sided with the attorneys and awarded a fee of $16,000, almost five times the amount received by the claimant.

In its ruling the court traced the history of attorneys’ fees provisions in statute, showing a statement of the right to “reasonable” attorneys’ fees and the creation of a formula to determine fees with latitude allowed to judges to adjust those fees as warranted, as well as the subsequent removal of discretion by state lawmakers in 2003.

“The Legislature did not indicate why it made the changes in respect to the determination of the amount of a claimant’s attorney fees in the history of the statute we have traced or in the 2003 revisions to the subsections,” the court said in an opinion written by Justice Charles Wells.

The court also ruled that a strict use of the formula would create “absurd” outcomes. If the provision calling for “reasonable” fees were controlled by the provision setting the formula, the “reasonable” provision “would be rendered meaningless and absurd because the application of the formula in all cases would result in inadequate fees in some cases and excessive fees in other cases,” the court said.

“Inadequate fees and excessive fees are not reasonable attorney fees,” the court noted.

William Stander, assistant vice president and regional manager of the Property Casualty Insurers Association of America, which filed an amicus brief in the case, noted that the legislation passed in 2003 contributed to a 60 percent decrease in rates in the state, a trend he warned the decision may reverse.

“Eliminating hourly attorneys’ fees, a key cost driver, was an integral component to the 2003 legislation,” Mr. Stander said. “Today’s Florida Supreme Court decision will naturally drive more litigation back into the system and drain more money from employers’ pockets.”

That sentiment was echoed by Tamela Perdue, chair of the Workers’ Compensation Coalition for Business & Insurance Industry.

“Florida’s workers’ compensation system diverted a crisis with landmark reforms in 2003, which eliminated unaffordable rates, widespread fraud and poor compliance with insurance requirements, while providing reasonably priced workers’ compensation insurance that covered more employees than ever before,” she said. “Unfortunately, today’s Supreme Court decision has put us right back into another potential crisis.”

In the ruling, the court offered a pre-emptive defense against such complaints, noting the arguments made in briefs of the abuse of hourly rate awards.

“We agree that delays and the enhancement of attorney fees should be controlled,” the court said. However, the ruling argued that state law does mandate “reasonable” fees.

“The judges who hear these claims and determine the amount of the attorney fees … must be vigilant to award only reasonable and necessary fees,” the court said. “Further, we expect the appellate courts to review the factors in cases presented to the courts so that only reasonable and necessary fees are awarded.”
According to the American Insurance Association the decision will “severely undermine the positive impact of 2003’s landmark workers’ compensation reforms…” that “ rescued what was a failing workers’ comp system,” said Cecil Pearce, AIA vice president, southeast region.