ATTORNEYS FEES IN FLORIDA WORKERS COMPENSATION CASES:

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1 ATTORNEYS FEES IN FLORIDA WORKERS COMPENSATION CASES: A HISTORICAL ANALYSIS AND COMPREHENSIVE REVIEW OF SIGNIFICANT LEGISLATION, STATUTORY AMENDMENTS AND CASE LAW INTERPRETING SAME Rafael Gonzalez Barrs, Williamson, Stolberg, Townsend & Gonzalez, P.A. Tampa, Florida 10/16/03 Rafael Gonzalez, born in Havana, Cuba, in 1964, graduated from Miami Senior High School in He obtained a Bachelor s of Science degree from the University of Florida in 1987 and Jurisprudence Doctorate degree from the Florida State University in Rafael is a partner in the firm of Barrs, Williamson, Stolberg, Townsend and Gonzalez, P.A. in Tampa, Florida, where he practices worker s compensation and social security disability law. He served as Editor of the News and 440 Report ( ); Chair of the Florida Bar Workers Compensation Section ( ); and Chair of the Academy of Florida Trial Lawyers Worker s Compensation Section ( ). Rafael presently serves as President of the FSU College of Law Alumni Association and as Chair Elect of the Florida Bar Practice Management and Development Section. Rafael also served as a member of the Human Relation Board ( ) at the invitation of the Hillsborough County Commission and was appointed in 2003 to the Florida Rehabilitation Council by Governor Jeb Bush. He has published numerous articles and book chapters, and lectures frequently, on the relationship between Florida s worker s compensation law and the federal social security disability system. He appears regularly and testifies as an expert in the areas of worker s compensation and social security law before the Social Security Administration and Judges of Compensation Claims. Rafael has also lobbied, authored several studies for, and testified before the Florida Senate and House of Representatives on legislative proposals affecting Florida s worker s compensation law. He is AV rated by Martindale Hubbell, listed in Who s Who in America Law (2000-present); listed in the Best Lawyers in America (2002-present); and listed amongst Tampa Bay s Best Lawyers by Tampa Bay Magazine since Rafael and Lisa have been married since 1988 and have 2 boys, Alejandro and Andres. When they are not at Disney World, you can find them in Tallahassee cheering on their beloved Seminoles!

2 I. Introduction (From RG) II. The Act of 1935: The Original Attorney Fee Provision. The Act of 1935 provided for claimant paid only fees. The Original Act provided that no claims for legal services or for any other legal services or for any other services rendered in respect of a claim or award for compensation to or on account of any person would be valid unless approved by the Commission, or if the proceedings for review of the order of the Commission in respect of such claim or award are had before any court, unless approved by such court. III. born. The 1941 Amendments: 21 Days and Employer/Carrier Paid Attorney Fees are With industrialization, a population boom, growing commerce and a significant rise in work related injuries and claims, the Legislature became increasingly aware that there was no legal mechanism in place for an employer or carrier to accept responsibility for occupationally based injuries and diseases and the attorney fees incurred in procuring such services and benefits. As a result, in 1941 the section was amended so that if the employer or carrier filed a notice of controversy or declined to pay a claim on or before the twenty-first day after they had notice of same, or otherwise resisted unsuccessfully the payment of compensation, and the injured worker employed an attorney at law in the successful prosecution of his claim, there would, in addition to the award for compensation, be awarded a reasonable attorney s fee to be approved by the Commission which shall be paid direct to the attorney for the claimant in a lump sum. The Act was also amended so that if any proceedings were had for review of any claim, award or compensation order before any court, the court could allow or increase the attorney s fees, in its discretion, which fees would be in addition to the compensation paid the claimant and would be paid as the court directed. The concepts enunciated in the 1941 amendments still today remain a significant part of Florida s worker s compensation attorney fee scheme. IV. The 1977 Amendments: The Birth of Statutory Fees and Lee Engineering s Prodigy. With the liberalization of laws in our state and around the nation, the business community called for major changes in the manner in which attorney fees were figured and calculated in Florida. Hence, the first substantive amendment to the attorney s fee statute since 1941 occurred in The 1977 Legislature, in CH , amended the Act to provide for a percentage of fees subject to adjustment by Judge utilizing a criteria derived from Lee Engineering & Construction Co. v. Fellows, 209 So2d 454(Fla 1968).

3 As amended, Section , Fla. Stat. provided that if the employer or carrier filed a notice of controversy or declined to pay a claim on or before the 21st day after they have notice of same, or otherwise resisted unsuccessfully the payment of compensation, and the claimant employed an attorney at law in the successful prosecution of the claim, there shall, in addition to the award for compensation, be awarded a reasonable attorney s fee of 25 percent of the first $5,000 of the amount of the benefits secured, 20 percent of the next $5,000 of the benefits secured, and 15 percent of the remaining amount of the benefits secured, to be approved by the Judge of Industrial Claims, which fee may be paid direct to the attorney for the claimant in a lump sum. However, the Judge of Industrial Claims could consider several factors in each case and therefore allowed to increase or decrease the attorney s fee, if in his judgment; the circumstances of the particular case warrant such action. These factors included the time and labor required; the novelty and difficulty of the questions involved; the skill requisite to perform the legal service properly; the likelihood that the acceptance of the particular employment would preclude employment of the lawyer by others or cause antagonisms with other clients; the fee customarily charged in the locality for similar legal services; the amount involved in the controversy and the benefits resulting to the claimant; the time limitation imposed by the claimant or the circumstances; the nature and length of the professional relationship with the claimant; the experience, reputation, and ability of the lawyer or lawyers performing the services and the contingency or certainty of a fee. V. The 1979 Amendments: Replacing 21 Days with Bad Faith. The 1979 Amendments to section did away with the 21 day pay-or-owe attorney fee provision. Instead, Chapters and , Laws of Florida, replaced the 21 day standard with the proposition that a claimant would be responsible for the payment of his own attorney s fee, except that a claimant would be entitled to recover a reasonable attorney s fee from a carrier or employer if he successfully asserts a claim for medical benefits only, if the claimant has not filed or is not entitled to file at such time a claim for disability, permanent impairment, wage-loss, or death benefits, arising out of the same accident; or in cases where the Deputy Commissioner issues an order finding that a carrier has acted in bad faith with regard to handling an injured worker s claim and the injured worker has suffered economic loss. Bad faith was defined as conduct by the carrier in the handling of a claim which amounts to fraud, malice, oppression, or willful, wanton or reckless disregard of the rights of the claimant. Or in a proceeding where a carrier or employer denies that an injury occurred for which compensation benefits are payable and the claimant prevails on the issue of compensability.

4 VI. The 1989 Amendments: Back to 21 Days. The bad faith experiment did not work. There was no specific measurement of when an employer or carrier would be ordered to pay a fee. Attorney fee litigation was rampant. As a result, in 1989, the Florida Legislature amended section , removing the 1979 bad faith provisions and instead returned to the old 21 day standard. The statute was changed so that a claimant would be responsible for the payment of his own attorney s fees, except that a claimant shall be entitled to recover a reasonable attorney s fee from a carrier or employer if he successfully asserts a claim for medical benefits only, if the claimant had not filed or is not entitled to file at such a time a claim for disability, permanent impairment, wage-loss, or death benefits, arising out of the same accident; or in any case which the employer or carrier failed or refused to pay a claim filed with the division on or before the 21st day after receiving notice of the claim, and the injured person had employed an attorney in the successful prosecution of his claim; or in a proceeding in which a carrier or employer denies that an injury occurred for which compensation benefits are payable, and the claimant prevails on the issue of compensability; or in cases where the claimant successfully prevails in proceedings filed under Section or Section VII. The 1994 Amendments: Reduction in Statutory Fees and New 14 Day Rule. However, by 1992, industry began to voice concerns that attorney s fees in Florida workers compensation cases were out of control; that unless a reduction in fees did not become a part of the law, Florida employers and carriers would not be able to compete with other states for the nation s commerce. As a result, in 1993, the Florida Legislature amended Chapter 440 so that only after filing a Request for Assistance and a 30 day time period within which to resolve any then outstanding issues, a claimant could then file a Petition for Benefits, invoking entitlement to attorney s fees at the expense of the employer or carrier. Section was specifically amended so that any attorney s fee approved by a Judge of Compensation Claims for services rendered to a claimant must equal 20 percent of the first $5,000 of the amount of the benefits secured, 15 percent of the next $5,000 of the amount of the benefits secured, 10 percent of the remaining amount of the benefits secured to be provided during the first 10 years after the date the claim is filed, and 5 percent of the benefits secured after 10 years. In awarding a reasonable claimant s attorney s fees, the Judge of Compensation Claims shall consider only those benefits to the claimant that the attorney is responsible for securing. The amount, statutory basis, and type of benefits obtained through legal representation shall be listed on all attorney s fees awarded by the Judge of Compensation Claims. The term benefits secured means benefits obtained as a result of the claimant s attorney s legal services rendered in connection with the claim for benefits. However, such term does not include future medical benefits to be provided on any date more than 5 years after the date the claim is filed.

5 VIII. The 2002 Amendments: Replacing 14 Day Rule with 30 Days. As had been the case since 1978, worker s compensation was again at the very top of the list of those issues that the Florida Legislature dealt with during the 2002 Legislative Session. Although the Florida Legislature ended its regular session on March 22, and thereafter two special sessions were called by the Governor to cover the areas of redistricting, budget, and cabinet reorganization as well as education, by the end of session, several workers compensation bills had been passed by both chambers and signed into law by Governor Bush. The most talked about of these legislative measures was Chapter, Laws of Florida. The new law provided significant changes to the workers compensation system designed to expedite the dispute resolution process, and reduce costs for the overall administration of the worker s compensation system. Changes included the elimination of the mandatory requests for assistance process; mandating that mediation conferences be held within 90 days of the filing of a Petition for Benefits; that final hearings be held within 210 days after receipt of the Petition for Benefits and authorization of the use of private mediation at the carrier s expense should such public mediation not be able to be scheduled within the appropriate time period. The 2002 Legislature also changed the number of days an employer/carrier had to respond to a request for benefits before they became responsible for payment of claimant s counsel attorney s fee. The new law called for attorney s fees not attaching until 30 days after the date the employer/carrier receives the Petition for Benefits. IX. The 2003 Amendments: Further Reduction in Statutory Fees and the Elimination of Hourly Fees. This process, which has now been in place for more than 20 years, has worked well. It provides a mechanism that very specifically indicates when a claimant will have to pay the attorney's fee as compared to when an employer/carrier will owe the attorney's fee. It also allows for the very standard attorney's fee as well as the ability for Judge of Compensation Claims to deviate from such a "statutory fee" and instead take into consideration some of the factors mentioned in the statutes. The courts have time and time again approved this attorney fee system. In the case of Davis v. Keeto, Inc., at 463 So.2d 368 (Florida 1st DCA 1985), the court, in approving a greater than statutory fee for benefits that were denied by the employer/carrier and obtained by the claimant's attorney as awarded by the Judge of Compensation Claims, indicated that without adequate representation, which necessarily requires a reasonable attorney's fee for the time involved, injured workers/claimants would be "helpless as a turtle on its back".

6 That same sentiment was echoed some 12 years later by the court in the case of Johnson v. Ocala Geriatric Center at 695 So.2d 802 (Florida 1st DCA 1997), where both the Judge of Compensation Claims and the District Court agreed that if concessions and steps are not taken to shorten the litigation process by the injured worker, or the employer/carrier, and such steps are not taken into consideration when attorney's fees are determined, then the message sent to everyone involved in the worker s compensation system is that once representation has been had by both sides, each side should behave in a thoroughly adversarial manner without regard for the needs of the injured employee or the interest of the employer/carrier, let alone Florida's workers' compensation system. The evidence is overwhelming. Not only are settlements in worker s compensation cases down by more than 50%, but attorney involvement is below the national average. When you add to these numbers, the fact that attorney's fees, as a percent of the total benefits paid out in all worker s compensation cases have decreased from an 8% in 1993 to 1% in 1998, it is quite evident that there is no attorney fee crisis in Florida's worker s compensation system. These are not studies done by attorney groups or claimant lawyer groups or labor groups. These are State of Florida, Division of Worker Compensation studies, which indicate that in 1990, the average attorney's fee in a worker s compensation case equaled $7,642. By 1994, it had dropped down to $5,009. And, as a result of the 1994 statutory amendments to Chapter 440 of Florida Statutes, by 1998, the average attorney's fee in a worker s compensation case in the state of Florida had decreased to $2,287. The new law continues the use of the current contingency fee schedule in awarding attorney s fees. Fees for benefits secured are limited to 20 percent of the first $5,000 of benefits secured, 10 percent of the remaining amount of benefits secured to be provided during the first 10 years after the claim is filed, and 5 percent of the benefits secured after 10 years. As an alternative to a contingency fee, the JCC may approve an attorney s fee not to exceed $1,500, only once per accident, based on a maximum hourly rate of $150 per hour if the JCC determines that the fee schedule, based on benefits secured, and fails to fairly compensate the attorney for a disputed medical only claim. There is no other provision for the payment of hourly fees. If there is a written offer to settle issues, including attorney s fees, at least 30 days prior to the hearing date for purposes of calculating the amount of attorney s fees to be taxed against the carrier or employer, the term benefits secured would include only that amount awarded to the claimant above the amount specified in the offer. X. Conclusion.

7 (From RG) g:/rgonz/legislativearticles/attorneyfees/attyfees.wpd

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