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Senate President Considers Workers Compensation Reform

Senate President Considers Workers Compensation Reform

New Senate President Bill Galvano has signaled that the Senate might take up workers’ compensation reform notwithstanding that rates have decreased in the last two years. Galvano reasons that the recent downward trend in workers’ compensation rates might not be sustainable, and in fact might be followed by future rate increases, due to the Florida Supreme Court’s decisions in the Castellanos and Westphal cases. Castellanos struck a cap on attorneys’ fees, while Westphal invalidated a cap on temporary disability benefits.

“I don’t want to be in a situation where they spike and then we are running to fix it at that point,” Galvano told reporters last week. “I’d rather look at the system and make any changes that are necessary while we have the luxury of not having high rates.”

It remains to be seen whether there is enough momentum in the Senate and in the House to move forward with reforms to the workers’ comp system in an environment of declining rates. Rising rates and/or market disruption more commonly are the forces that prompt legislative action. This is typically because absent immediate problems in the market, competing interests in the workers’ comp area produce a stalemate. These interests include employers, insurers, healthcare providers and trial lawyers.