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Sharp spike in work comp cases following state Supreme Court judgment

John Breslin Aug. 22, 2016, 10:25am

TALLAHASSEE - Florida’s workers’ compensation claims office have seen a sharp spike in cases filed following a landmark state Supreme Court ruling that barred capping attorney fees.

Following the April ruling, the number of petitions for benefit rose by 24 percent in May compared to the same month the last year, and 21 percent in June, increases significantly larger than previous months.

A proposed 19.6 percent rise in workers’ compensation insurance premiums is largely due to the judgment, which scrapped the fee schedule for attorneys, in place since 2003.

The Supreme Court judgment described the cap on fees as unconstitutional because they could be so “unreasonably low” workers were unable to find lawyers to represent them.

Business interests are concerned about the ruling's impact, as seen in a survey commissioned by the Florida chapter of the National Federation of Independent Business (NFIB) and the Sick of Lawsuits (SOL) project. It found that 92 percent of small business owners say lawsuits are a serious problem, and a key factor holding them back from growing their business.

In a recent op-ed in the Tallahassee Democrat, Bill Herrie, executive director of the NFIB in Florida, and Julie Griffiths, outreach director for SOL and Citizens Against Lawsuit Abuse, said that litigation in workers’ compensation has increased 44 percent this year alone.

They cited figures from the Office of Judges of Compensation Claims (OJCC), the statutory body responsible for the adjudication and mediation of disputed claims.

But the office’s Deputy Chief Judge David Langham, in a recent blog post, said the number of petitions for benefit - several of which can be linked to a single claim - are estimated to have increased just over 12 percent year on year, and new cases by four percent.

The proposed increase in insurance premiums for workers’ compensation insurance was discussed Tuesday at a public meeting in Tallahassee. The increase was proposed by the National Council on Compensation Insurance, a national body linked to the insurance industry that many states use to help calculate and propose rates.

The state’s Office of Insurance Regulation will ultimately decide whether to accept the proposed rate, or set a different one.

William Large, president of Florida Justice Reform, an advocacy group that campaigns for civil justice reforms, believes the NCCI’s proposed rate increase is “quite modest.”

“The more likely increase is 35.4 percent in the overall claims costs for workers’ compensation insurance,” said Large, citing an independent report his organization commissioned to calculate the fallout from the Supreme Court’s Castellanos judgment. 

“Premiums in Florida will probably go up an additional $930 million for insured employers, and $360 million for the self insured,” Large told theFlorida Record. 

Many large employers self insure, essentially covering the costs of workers’ compensation within their own organizations.

Large estimates, based on the report his organization commissioned, that the combined cost to the state of Florida’s employers will be $1.3 billion per year.

“This will lead to a decrease in average employment growth and will translate into a loss of over 105,000 of jobs, and an average loss of $340 per year, per employee,” he warned.

In his recent blog post, Judge Langham, of the OJCC, wrote that if the significant monthly increases seen in May and June persist “there will be a significant impact” on the office.

“If 20 percent increases remain consistent over the next 12 months, the total petition volume for fiscal 2017 could be over 80,000,” Langham wrote.

The Supreme Court in April ruled against a 2003 law limiting lawyer fees. The suit centered on an attorney who was paid the equivalent of $1.53 an hour for work on a case, a rate described as “absurdly low” by the court.

Plaintiff lawyers in workers’ compensation cases further argue that insurance companies are often to blame for litigation because they unreasonably deny benefits to claimants

In their joint op-ed piece on the wider issue of litigation against employers, Herrie and Griffiths argued that personal injury lawyers are “suing local businesses at unprecedented levels.”

“Florida has earned a reputation as a state where trial lawyer influence and lawsuit abuse run rampant,” they wrote.

Citing their survey, they stated 53 percent of small-business owners report they have been threatened with a lawsuit, and 37 percent say that they have actually been a defendant in one.