Court Calls $1.53 an Hour Lawyer Fee Unconstitutional, ‘Absurd’

By Brendan Farrington
Associated Press – April 28, 2016

TALLAHASSEE — The Florida Supreme Court struck down a law limiting lawyer fees in workers’ compensation cases on Thursday, saying the $1.53 hourly rate a lawyer was paid to help an injured worker was “absurdly low.”

The 5-2 decision is expected to help injured workers who have struggled to get lawyers to help them because the fee system created by then-Gov. Jeb Bush in 2003 makes their cases not worth representing. The case involved a man who successfully sued a Miami door manufacturer over an on-the-job injury. His lawyer was paid $164.54 for more than 100 hours of work.

But the ruling is a blow to business groups that have long argued legal fees drive up the costs of workers-compensation insurance. The fee issue will bounce back to the Legislature, where it could spark a fierce debate.

In its ruling, the court said the fee limits are unconstitutional because they resulted in a system where people can’t find lawyers to represent them at unreasonably low rates. The law based lawyer fees on a percentage of the amount of money won in a claim, so if an injured worker had a $5,000 claim, lawyers knew that they could receive no more than $1,000.

So while the $5,000 could be important to someone earning $10 an hour and trying to pay bills, lawyers don’t want to take cases where their fee is driving down to the equivalent of $10 an hour or less, said Michael Winer, who chairs the Workers Compensation Section of The Florida Bar.

“People who were injured on the job and stuck in the workers’ comp system lost the ability to pay lawyers,” he said. “I have had very difficult discussions with a lot of injured workers who had valid claims, and said, `Look, the juice here, unfortunately, just isn’t worth the squeeze. I might have to spend 50 to 70 hours on your case.”‘

It also led to insurance companies denying legitimate claims knowing that injured workers wouldn’t be able to fight the decision, Winer said.

“They deny the claim, and if the claimant can’t get a lawyer, he goes away and he makes it somebody else’s problem. That problem might be Medicaid’s problem, that problem might be a county hospital that never gets reimbursed,” Winer said. “It’s the grand passing of the buck.”

But the ruling drew quick rebukes from the Florida Chamber of Commerce, Associated Industries of Florida and the business-backed Florida Justice Reform Institute, all of which raised the specter of increased insurance rates.

“Most people have probably forgotten how runaway workers’ compensation costs nearly caused Florida’s economy to seize up and stop before the 2003 reforms. Well, now we’re about to remember,” said William Large, president of the Florida Justice Reform Institute, a group created by the Florida Chamber of Commerce.

The law was a high priority for Bush, who made it part of a special legislative session. He said at the time that the rising cost of workers’ compensation insurance was making it unaffordable and in some cases unavailable.

The decision could lead to higher workers compensation rates, Florida Insurance Commissioner Kevin McCarty said in an emailed statement.

“Limiting attorney’s fees has been an important factor in reducing workers’ compensation rates. A legislative remedy will be required to prevent significant increases in rates and we look forward to working with all parties affected to bring about a sensible solution,” McCarty said.

Gov. Rick Scott’s office said it is reviewing the decision.

Justice Barbara Pariente, writing for the court’s majority, said the 2009 law is a violation of due-process rights under the Florida Constitution and the U.S. Constitution because it prevents challenges to the “reasonableness” of attorney’s fees awarded in workers-compensation cases.

“This case, and many others like it, demonstrate that despite the stated goal, oftentimes the worker experiences delay and resistance either by the employer or the [insurance] carrier,” wrote Pariente. “Without the likelihood of an adequate attorney’s fee award, there is little disincentive for a carrier to deny benefits or to raise multiple defenses, as was done here.”

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