By Florida law, unsuccessful parties in court cases are held responsible for the litigation and related costs of the prevailing party—and a recent ruling by Florida’s First District Court of Appeals raises questions about whether that statute might deny injured workers their right to bring suit in Workers’ Compensation cases. The ruling may also have implications for insurers seeking to collect from those unsuccessful claimants.
On Oct. 5, the First District Court of Appeals called on the Florida State Legislature to consider just such a matter after the former ruled in Frederick v. Monroe County Sch. Bd.
In that case, the claimant, Gina Frederick, voluntarily dismissed her claim for permanent total-disability benefits when an expert medical advisor testified that she was not permanently disabled. Because the insurance carrier technically won the case, Frederick was required to pay the defendant’s litigation costs—but the court deemed the assessment and related consequences unfair.
Underlying the court’s action may be the belief that imposing such costs could ultimately deny potential claimants access to courts: A claimant’s inability to pay his or her employer’s legal fees, if they lose in court, would discourage them from filing additional claims.
Additionally, in Florida Workers’ Comp cases (as in many states), claims are made for specific medical or indemnity benefits. Regardless of whether a benefit claimed is eventually denied or provided, additional benefits related to that same accident can be requested in the future; these benefits can be claimed in aggregate or individually and can take place throughout the life of a claim.
For example, if a worker hurt his right knee at work, lost time on the job and alleges he was not compensated properly for it, he could file one claim for those past-due wages (indemnity) and a separate claim for treatment of back pain due to his accident (medical). At trial, a judge of compensation claims would rule on each issue on its own merit. The judge could find that one benefit is due to the claimant and not the other.
Assume the worker lost one or both of the prior issues at trial (past-due wages or treatment of the back), and now must pay the litigation costs to his employer or the insurer. Before the worker pays, his left knee starts to hurt, and he files a new claim for related medical treatment.
If he still hasn’t paid the court costs that stemmed from his first claim, one might conclude that he shouldn’t be entitled to more benefits—at least until he pays what he owes. In that case, the worker may have been denied his constitutional right under state law to access the courts.
It’s easy to see why Workers’ Comp issues in Florida might be intertwined with the state’s constitutional protections. Beyond the obvious disparities between the financial resources of employees versus those of their employers and the employer’s insurers, the construction of the state’s statute appears somewhat arbitrary.
In Frederick, the court seems to ask the legislature to develop criteria for determining that a claim has merit or technically is brought in “good faith.” In such cases, if the claimant loses, he or she would be excused from paying litigation costs of the other party. However, that seems far easier said than done.
Even if the state legislature doesn’t consider this particular case, workers filing claims still have access to bring suit under the current statute. Even if they cannot afford to pay the costs if they lose, the statute technically prevents them from being denied the right to file claims in the future.
In practice, when insurers and employers prevail in litigation involving employees, the award of their litigation costs is only as good as their ability to collect it.
In fact, carriers rarely see those court costs actually paid by a claimant, and they realize claimants often lack the resources to pay. But in cases where claimants clearly have been unreasonable, such as when there’s strong evidence contrary to their position, prevailing carriers may appear justified in seeking to recover their defense costs.
Given the action by the appeals court, insurers may need to adjust their strategies for collecting from unsuccessful claimants. Because cost issues won’t prevent workers alleging they have occupational injuries or illnesses from filing future claims, the best course of action for insurers may be to pursue the recovery of costs near the end of the claim or at the point when compensability ultimately is decided. That way, insurers may save the ongoing expenses of trying to recover costs on a piecemeal basis.