Compromise for workers
Palm Beach Post Editorial
Sunday, March 22, 2009
Knowing how hard the budget will be, state legislators this year are holding hearings on even fewer of the bills that members have filed. But sailing through the House is one major bill that would make it harder for injured workers to collect wrongly denied benefits.
House Bill 903 is the top priority of the Florida Chamber of Commerce and other business groups. It would overturn last October’s Florida Supreme Court ruling that critics believe would force a sharp rise in workers compensation insurance rates after six years of decreases. Naturally, backers of HB 903 cite the economy as reason to pass it. But compromise is the better option.
In 2003, depending on whom you asked, Florida businesses were paying the highest or second-highest rates in the country to cover claims for on-the-job injuries. A key piece of workers compensation insurance reform that year attempted to restrict what judges could award in fees for lawyers who successfully challenged a denial of benefits.
But as the case before the high court showed, the fee system can be faulty. A nursing home worker, Emma Murray, was injured lifting a patient and had to undergo a hysterectomy. The nursing home’s carrier refused to pay. In 2005, a compensation claims judge ordered the carrier to pay $3,244.21 in benefits. Even though Ms. Murray’s lawyer spent roughly 80 hours on the case, the judge awarded just $648.84 in fees – $8.11 per hour – based on the statutory fee schedule of 20 percent for the first $5,000 in benefits.
Ms. Murray challenged the award, arguing that the law also allows for "reasonable" fees. The judge had called the $648.84 "manifestly unfair." The high court agreed, with Justice Charles Wells noting that injured workers who had wrongly been denied benefits would be stuck because lawyers didn’t take cases because they were going to lose money. Justice Wells noted that the insurance company paid its lawyer $16,050.
HB 903 would remove "reasonable" and require that judges stick to the fee schedule – 20 percent for the first $5,000, 15 percent for the next $5,000 and 10 percent for anything more. It has passed two committees and will get a full House vote this week. The Senate version, SB 2072, has had no hearings.
Tammy Perdue, general counsel for Associated Industries of Florida, points out that the state approved a 6.4 percent increase in workers comp rates for 2009 just after the Murray decision. But combined with an earlier decrease of more than 18 percent, companies still are paying less this year. She calls the $8.11-per-hour award "an outlier," and argues that most lawyers get reasonable fees.
The state’s trial lawyers make points to support Justice Wells. Since 2003, there have been fewer cases litigated, and it’s hard to imagine that insurers have become more compassionate. As for predictions of much higher rates, Insurance Commissioner Kevin McCarty said in January that he was "cautiously optimistic" about a compromise that would keep coverage affordable "while also protecting injured workers by ensuring their access to courts, medical care and other necessary benefits."
That fair compromise could be a more generous fee schedule that fairly compensates lawyers and eliminates the hourly-rate awards that businesses don’t like. Apparently, the House is in no mood to compromise, even though the police and fire unions oppose HB 903. The Senate will have to work out a system that doesn’t stack the deck against workers.