Florida Supreme Court Rules on Workers' Compensation Cases
This week represented a great deal of movement on the Florida Workers' Compensation front. As mentioned on the Compass yesterday, there was a significant Florida Supreme Court ruling that will undoubtedly increase workers' compensation rates in the state.The Florida Association of Professional Employer Organizations ("FAPEO") has allowed the Compass to post this very important briefing from FAPEO's Deputy General Counsel, Torben Madson. As Torben concisely concludes below:"This significance of this case is that claimant attorneys will now be able to claim hourly fees which will likely increase litigation and create higher average workers’ compensation claim costs."
The past week has been a very interesting one on the workers’ compensation front. First there was the 1st DCA ruling in the Miles case and now the Florida Supreme Court has issued opinions on the Castellanos and Stahl cases. In the Castellanos case the court reviewed the constitutionality of the fee schedule in FS 440.34. In that case the Claimant was injured at work and had to go to trial on the compensability of his claim. The claimant prevailed at trial and filed a motion for attorney’s fees, seeking an hourly fee of $350 at trial but the Judge of Compensation Claims (JCC) ruled that section 440.34 limited attorney’s fees to a sliding scale based on the amount of benefits obtained and thus awarded an attorney fee that amounted to only $1.53 per hour for 107.2 hours of work. The case was appealed to the 1st DCA on the attorney fee issue.
The case was submitted to the Florida Supreme Court by the 1st DCA as a case of great importance with the question that the Supreme Court interpreted as challenging the constitutionality of FS 440.34. In their opinion the Supreme Court acknowledged the complexity of the workers’ compensation system to the detriment of claimants who rely on” the assistance of a competent attorney to navigate the thicket” and that the JCC had concluded that it was “highly unlikely that [Castellanos] could have succeeded and obtained the favorable results he did without the assistance of capable counsel.” The Supreme Court decided the constitutional issue in this case solely on the basis of the constitutional rights of the claimant under due process and determined that” …the statute establishes a conclusive irrebuttable presumption that the formula will produce an adequate fee in every case. This is clearly not true, and the inability of any injured worker to challenge the reasonableness of the fee award in his or her individual case is a facial constitutional due process issue.”
In a 5-2 decision the court held that the fee schedule in section 440.34 is unconstitutional and thus the statute reverts back to the immediate predecessor statute. The court did go on to send an interesting message about the ruling when they wrote “We emphasize, however, that the fee schedule remains the starting point, and that the revival of the predecessor statute does not mean that claimants’ attorneys will receive a windfall. Only where the claimant can demonstrate, based on the standard this Court articulated long ago in Lee Engineering, that the fee schedule results in an unreasonable fee—such as in a case like this—will the claimant’s attorney be entitled to a fee that deviates from the fee schedule”.
This significance of this case is that claimant attorneys will now be able to claim hourly fees which will likely increase litigation and create higher average workers’ compensation claim costs. On a bright note the Supreme Court did discharge jurisdiction in the Stahl v. Hialeah Hospital which challenged the constitutionality of workers’ compensation as the exclusive remedy.
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The PEO Compass is a friendly convergence of professionals and friends in the PEO industry sharing insights, ideas and intelligence to make us all better.All writers specialize in Professional Employer Organization (PEO) business services such as Workers Compensation, Mergers & Acquisitions, Data Management, Employment Practices Liability (EPLI), Cyber Liability Insurance, Health Insurance, Occupational Accident Insurance, Business Insurance, Client Company, Casualty Insurance, Disability Insurance and more.To contact a PEO expert, please visit Libertate Insurance Services, LLC and RiskMD.