State Supreme Court strikes down workers’ comp fee schedule

The mandatory attorney’s fee schedule for workers’ compensation cases are unconstitutional both under state and federal law, the court found

Insurance News

By Lyle Adriano

The Florida Supreme Court ruled Thursday that a provision in state workers’ compensation law that limited attorney’s fees was unconstitutional, and had the stipulation removed accordingly.

Some business groups have criticized the ruling, asserting that legal fees raise the cost of workers’ compensation insurance and could destabilize the state’s economy.

The case before the Court involved one Marvin Castellanos—a Miami native who sustained head, neck and shoulder injuries while working for door and door frame maker Next Door Company.

Despite his company’s defense, Castellanos managed to win and receive benefits of $822.70. His lawyer, however, only received a fee of $164.54.
Castellanos’ lawyer sought a fee of $36,817.50, having spent 107 hours working on the case.

Under the provision, lawyers who successfully represent injured workers are paid 20% of the first $5,000 in benefits obtained, with 15% more based on the next $5,000 in benefits.

Justice Barbara Pariente remarked that the law violates workers’ due process rights under the state and U.S. Constitution, as it prevents challenges to the “reasonableness” of legal fees in workers-compensation cases.

“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,” Pariente stated. “Virtually since its inception, the right of a claimant to obtain a reasonable prevailing party attorney’s fee has been central to the workers’ compensation law.”

Pariente reasoned that by replacing the previous reasonable standard with a sliding scale of legal fees, “the Legislature has thus eliminated any consideration of reasonableness.”

Outgoing insurance commissioner Kevin McCarty said that until the Legislature acts, Florida will base attorney’s fees on the “reasonable” standard defined in the 2008 case, Murray vs. Mariner Health.

“Limiting attorney’s fees has been an important factor in reducing workers’ compensation rates,” said McCarty. “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.”
 

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