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Friday, Aug 17, 2018
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Editorial: Balancing the playing field for workers’ compensation

For the longest time, injured workers in Florida were basically at the mercy of the whims of employers to treat them fairly. A 2003 law aimed at reducing the cost of workers’ compensation coverage for businesses had the desired impact, but it also discouraged attorneys from getting involved in workers’ comp cases and resulted in a drop in the number of claims. Then the Florida Supreme Court ruled in two 2016 cases on behalf of workers’ rights, causing the pendulum to swing back in the direction of employees and resulting in significant rate increases for employers. The Florida Legislature is again proposing reforms, but it needs a more prudent and equitable approach.

Clearly, this is an area that needs to be monitored closely. Between spurious claims and the potential for excessive attorney fees, a poorly run workers’ compensation system could have an adverse impact on the state’s economy. For example, after the state Supreme Court rulings, the premiums for businesses seeking workers’ compensation insurance jumped 14.5 percent in 2016-17.

The Florida House got behind legislation last year that would have limited hourly rates attorneys can charge in workers’ compensation cases, but the bill died in the Senate. That bill was fueled by concern over the increase in insurance premiums, but it’s important to note that circumstances have already changed. State Insurance Commissioner David Altmaier questioned whether the data backed up the need for such a drastic rate hike, and ordered premiums to be decreased by 9.8 percent in 2018.

Now legislators must take care not to overreact and do more harm than good. The state’s idea of reform in 2003 was to severely limit fees for claimants’ attorneys, which made it more difficult for workers to find lawyers willing to take on cases. In 2012-13, attorney fees for claimants ($210 million) and businesses ($216 million) were essentially the same. By 2015-16, claimants’ attorney fees had dropped 35 percent to $136 million. Meanwhile, businesses paid attorneys $242 million, an increase of 12 percent. That kind of disparity smacks of an uneven playing field.

In a 5-2 opinion in April 2016, the Supreme Court found a 2009 state law limiting attorneys’ fees was unconstitutional because it prevented challenges to the "reasonableness" of attorneys’ fees awarded in workers’ compensation cases. The ruling stemmed from a case in which an attorney was awarded the equivalent of $1.53 an hour representing an injured door manufacturing employee in Miami. The court said the cap on attorneys’ fees, which had the effect of discouraging more people from filing claims, violated workers’ right to due process.

In another 5-2 opinion in June 2016, the Supreme Court found the time limit on temporary benefits for injured workers is unconstitutional. The ruling came in the case of St. Petersburg veteran firefighter Bradley Westphal, who suffered a severe back injury during a house fire. He couldn’t return to work, and his temporary benefits ran out after the law’s two-year maximum. But doctors also would not approve Westphal for permanent disability. The court properly found that left Westphal in a "statutory gap" and voided the limit on temporary benefits.

While court rulings were appropriate, in the first full year after the rulings attorney fees for claimants rose to nearly $186 million, according to the Office of the Judges of Compensation Claims annual report. That’s not necessarily a reason to applaud, but it speaks to the need for workers to have someone represent them in disputes.

Artificially capping attorney fees was not a productive answer for workers in the past decade. The House passed legislation, HB 7009, Friday that would cap attorney fees insurers must pay lawyers of injured workers when the workers win. Lawmakers should be wary of going down that same rabbit hole again. The solution is not stacking the deck for one side or the other. If they want to talk about real reform in workers’ compensation, legislators will come up with a plan that protects both employees and employers, and lessens the need for lawyers.

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