Workers’ comp fee cap debated
April 15, 2009
By JIM SAUNDERS
Tallahassee Bureau Chief
TALLAHASSEE — With Florida businesses getting hit by some of the highest rates in the country, lawmakers in 2003 passed a controversial overhaul of the state’s workers’ compensation insurance system.
The plan worked for businesses: Rates steadily dropped for years.
But after the Florida Supreme Court rejected a key part of the measure in October, lawmakers are again embroiled in a debate about the system that is designed to take care of workers who get injured on the job.
The ruling wiped out strict limits on fees that attorneys can receive for representing workers in legal disputes about benefits. Without such limits, businesses argue workers’ compensation premiums will soar.
"Employers right now are trying to scrape (together) every penny they can just to keep people on the payroll," said Jim Cameron, a vice president of The Chamber, Daytona Beach/Halifax area. "This is just another expense that employers cannot afford at this time."
But advocates and attorneys for injured workers say the fee limits make it harder for people to get legal representation to help fight for benefits.
Deltona resident Steve Clelland, who is president of the Orlando firefighters union, said injuries are "part of our job." He said workers need to be able to find attorneys who will represent them, particularly when the disputes involve serious injuries.
"When you cost an insurance company a lot of money, you’re in for a fight," Clelland said.
The House has already approved a proposal that would change wording in the 2003 law and reinstate the fee limits. An important vote on the proposal is scheduled today in the Senate Judiciary Committee, which has been largely split on the issue.
Committee chairman Lee Constantine, R-Altamonte Springs, this month admonished lobbyists on both sides of the issue to reach a compromise. But they have not reached an agreement, setting up today’s vote.
In the workers’ compensation system, insurers or businesses can be forced to pay the attorneys’ fees when injured workers win legal cases.
Along with limiting such fees, the 2003 law made wide-ranging changes that dealt with issues such as eligibility for benefits. Since the law passed, insurance rates have dropped by a cumulative average of more than 60 percent, according to regulators.
But that trend stopped after the Supreme Court issued its ruling in October. Regulators approved a 6.4 percent rate increase that took effect April 1, adding about $172 million in projected insurance costs for businesses.
Business groups contend higher legal fees drive up costs in the workers’ compensation system and that the 6.4 percent increase is only the first in a series of hikes unless fees are limited.
The 2003 limits created a formula for attorneys’ fees, with totals based on the amount of benefits awarded by judges. The Supreme Court case dealt with an injured nursing home worker in Charlotte County who was awarded $3,244 in benefits and whose attorney received $648.84 in fees — or $8.11 an hour.
Justices pointed to what they described as an "ambiguity" in the law, which included the formula but also indicated attorneys are entitled to reasonable fees. The Supreme Court said the attorney in the Charlotte County case should have received $16,000, based on his amount of work.
The House bill, which passed 84-35, would solve the situation by eliminating the part of the law dealing with "reasonable" fees. Rep. Dwayne Taylor, D-Daytona Beach, was the only Volusia or Flagler County lawmaker who voted against the bill.
Taylor said Tuesday he opposed the bill largely because fees are not limited for the attorneys who represent insurance companies in workers’ compensation cases. In the Charlotte County case, that totaled about $16,000.
"I wanted a measure that would sort of equalize the playing field," Taylor said.
But bill supporters, such as Rep. Pat Patterson, R-DeLand, said it is important to hold down workers’ compensation insurance rates during difficult economic times. He said the proposal would particularly help the construction industry.
Eric Olsen, owner of Olsen Custom Homes and Olsen Commercial Construction in Daytona Beach, said people will go out of business or try to get around buying workers’ compensation insurance if it becomes too expensive.
But even if the Senate goes along with the House on the proposal, opponents vow more legal challenges and say they think the law will be found unconstitutional — an argument that bill supporters dispute. The Supreme Court did not rule on constitutional grounds in October.
"We are setting up this bill for the Supreme Court to tee off on us," Rep. Darren Soto, D-Orlando, said during a House debate.