Fla. Bill On WC Attorney Fee Cap Seen Facing Tough Battle

A bill designed to re-institute Florida's caps on fees for attorneys representing injured workers is in for a tough fight in the Legislature, an insurance association representative predicted.

On Oct. 23, 2008 the Florida Supreme Court ruled that the fee schedule, part of the state's 2003 reforms to its workers' compensation system, was ambiguous and could result in inequitable payments that were either inadequate or excessive.

The law was challenged in the Florida Supreme Court in the case Murray v. Mariners Health/ACE USA.

The bill seeking to restore the fee schedule and clear up conflicts in the law (HB 311) was filed on Jan. 13 by Rep. Priscilla Taylor, D-West Palm Beach.

The fee schedule would cap attorney fees at 20 percent of the first $5,000 of the amount of the benefits secured, 15 percent of the next $5,000, and 10 percent of the remaining amount.

Sam Miller, executive vice president of the Florida Insurance Council, said the attorney fee cap was one of the most controversial parts of the 2003 reforms and was opposed by the workers' compensation bar and injured worker advocates. He added that opposition to a bill seeking to re-institute that provision will be "fierce."

He also said it remains to be seen what bill the Legislature will vote on. While Rep. Taylor filed HB 311, Mr. Miller said it will ultimately be a committee bill. Rep. Taylor, Mr. Miller noted, is an insurance agent and is the ranking Democrat on the House Insurance Committee, so her ideas will likely be given consideration, "but let's see what bill is actually taken up by the committee."

Mr. Miller said the reform is necessary, as capping attorney fees has been a major factor in workers' comp rates dropping 60 percent since 2003. "Absent a fix," Mr. Miller said, rates will go back up.

Commenting that the fee cap was one of the most important pieces of the 2003 reforms, Mr. Miller pointed out that the National Council on Compensation Insurance (NCCI), the state's statistical agent, immediately recommended an 18 percent rate increase for insurers after the Murray decision.

The Florida Supreme Court had stated that while legislative intent "is the polestar that guides a court's inquiry in statutory construction...," the court "must resort to traditional rules of statutory construction in an effort to determine legislative intent" when a statute is unclear or ambiguous.

To that end, the court found that the fee cap schedule in question, which was outlined in subsection (1) of the relevant statute, conflicted with subsection (3) of the same statute, which authorizes reasonable attorney fees.

In the case before it, the court noted that the attorney fees of $684.84 initially awarded equates to an hourly rate of $8.11. The court stated, "It is obvious, as demonstrated by the present case, that applying the formula in all cases will not result in the determination of reasonable attorney fees in all cases. In some circumstances, applying the formula will result in inadequate fees, and in some circumstances, applying the formula will result in excessive fees."

Mr. Miller said he does not believe the fee schedule resulted in unfair fees for attorneys, noting that the percentage of workers' comp cases with attorney involvement was higher than the national average. He also said the number of injured employees representing themselves has remained flat to slightly lower since the 2003 reforms. If fees were unfair, he said, a larger percentage of injured workers would be representing themselves.