Businesses want to re-establish limits on attorney fees

Miami Herald--March 2, 2009

BY BEATRICE E. GARCIA

A debate over workers’ compensation insurance will pit attorneys and workers’ rights advocates against business and insurers.

The argument is the result of a Florida Supreme Court decision in October relating to the amount of fees lawyers can earn on workers’ comp cases. The ruling found that a lawyer representing an injured employee has a right to earn a ”reasonable” rate for his work.

Sounds simple, but insurers and businesses say the ruling undoes changes to the law six years ago, including caps on lawyer fees, that helped bring rates down more than 60 percent.

Attorneys and workers advocates argue that the 2003 cap on lawyer fees limited the ability of some injured workers to find an attorney willing to take a case, which is usually done on contingency.

Businesses, convinced that attorney fees were the main reason for escalating insurance rates, want legislation restoring the order they favor.

”Absent a change, rates will begin to climb,” says David Daniel, director of government relations for the Florida Chamber of Commerce. The chamber has made the workers’ comp law one of the top issues on its legislative agenda this year.

$8 AN HOUR

In the case that went to the state’s highest court, lawyer Brian Sutter was paid about $8 an hour for the 80 hours he spent working on the case of an injured nurse under the 2003 law’s formula. The attorney for her employer was paid $150 an hour.

Sutter argued the fee disparity left workers with an unconstitutional disadvantage. The Supreme Court ruled that the law was unclear since it referred to ”reasonable” fees while also laying out a fee structure.

A bill introduced by Rep. Anitere Flores, R-Miami-Dade, would strike the word ”reasonable” from the law while retaining the same fee schedule for attorneys. A companion bill has been filed by Sen. Garrett S. Richter, a Republican from Naples who chairs the Senate Banking and Insurance committee.

Sen. Dan Gelber, D-Miami, has introduced another workers comp bill that would allow injured employers to chose their own attorney and fees wouldn’t be limited. That’s would reverse the current law.

Paul Anderson, an executive officer with the Florida Justice Association, which represents trial lawyers, had been negotiating with Tamela Perdue, chairwoman of the Workers’ Compensation Coalition for Business & Industry. The groups were trying to reach a compromise that could be used to draft a bill that could win speedy approval.

TALKS BREAK OFF

But the talks broke off last week, said Anderson.

He said the trial bar, several workers’ advocate groups and several unions continue to work with legislators on a bill with a rate structure that would compensate attorneys when taking on these cases.

Before the 2003 reforms, Florida had some of the highest workers’ comp insurance rates in the country. Many insurers were reluctant to write policies in the state.

Since the law was changed, costs have dropped dramatically.

Taking the court decision into consideration, the Office of Insurance Regulation approved a 6.4 percent increase in workers’ comp rates for this year. The National Council on Compensation Insurance had filed for an 8.9 percent hike.

OIR said the approved rate increase will add about $172 million in insurance costs for Florida employers. But, in combination with the 18.6 percent rate decrease that took effect Jan. 1, the net savings to Florida employers is still $438 million.

‘Although it is still somewhat early to know for sure what the full impact of the Supreme Court’s decision on workers’ compensation rates will be, I felt it was necessary to approve this modest increase,” said Commissioner McCarty.