Tallahassee Update

Rep. Rick Kriseman (D-53) is a member of the Florida House of Representatives and an attorney with Saunders & Walker PA
The worker’s comp law in Florida was last changed in 2003. Prior to the change, Florida’s workers’ compensation insurance rates consistently ranked as the most expensive or second most expensive in the country. The changes in the 2003 legislation made several changes, the most controversial of which was the change to the provision governing attorney’s fees in workers’ compensation. The 2003 legislation retained a contingency fee schedule for attorney’s fees, but removed a listing of factors a judge of compensation claims (JCC) was required to consider, thus allowing the judge to increase or decrease the amount of the award. Some of the most important factors removed were the time and labor required, the difficulty of the case, customary charges, and the lawyer’s experience, reputation, and ability.
In October 2008, the Florida Supreme Court heard the case of Murray v. Mariner Health and ACE USA. The Murray case involved a claim for benefits that had been denied by the insurance company. At the conclusion of the trial, the Court ruled in favor of the claimant, Ms. Murray, finding that the carrier had denied Ms. Murray benefits she was legally entitled to receive.
Because the carrier had wrongfully denied benefits, the carrier was responsible for paying Ms. Murray’s attorney’s fees. Although Florida law at the time called for payment of a “reasonable fee”, the judge applied a statutory percentage formula, which resulted in the attorney receiving a fee of $648.84 for more than 80 hours of work (which breaks down to $8.11 per hour). The judge also commented that had he been allowed to use what was the reasonable local hourly rate in calculating a fee, the total would have been in excess of $16,000.00.
On appeal, the Florida Supreme Court ruled that the attorney’s fee schedule (which caused the award of $648.80 to Ms. Murray’s attorney), when read together with a provision that awards “a reasonable attorney’s fee” to the prevailing party, creates an ambiguity as to whether the fee schedule is the sole basis for determining a reasonable attorney’s fee. As such, the Supreme Court struck down that provision of the statute regarding “reasonable fees”.
House Bill 903, filed by Rep. Anitere Flores, attempts to address the impact of the Murray decision on workers Compensation by clarifying that awards of attorney’s fees, except in certain medical only cases, are to be calculated based solely on the fee schedule, not on any of the other factor’s previously described. The bill further states that an attorney who attempts to negotiate a rate different from that provided under law is subject to criminal prosecution.
Those supporting this change state that without this change, worker’s comp rates will once again begin to rise, placing a large financial burden on both small and large businesses. In support of this argument, they point to the decreases in rates which occurred after the 2003 legislation went into effect.
Those opposed to HB 903 state that rates were high in Florida prior to the 2003 legislation, not because of attorney’s fees, which, they point out, are only awarded when a carrier is found to have unlawfully refused to pay benefits due, but instead because carriers are allowed to include in their base rate attorney’s fees that they paid to both their own attorneys and to the Claimant’s attorneys. Neither medical malpractice carriers, property and casualty carriers or automobile insurance carriers are permitted to charge back attorney’s fees to their insureds. Only workers comp carriers are currently permitted to do this.
A second, and more important reason cited for high workers comp rates is because of the recommendations of the organization that submits requests for rate increases to the State on behalf of carriers, NCCI. NCCI, the National Council on Compensation Insurance, in their own words, is “the largest provider of workers compensation and employee injury data and statistics in the nation. NCCI analyzes industry trends, prepares workers compensation insurance rate recommendations, determines the cost of proposed legislation, and provides a variety of services and tools to maintain a healthy workers compensation system. ”
This organization helps the Florida Office of Insurance Regulation determine what rates are appropriate for workers comp carriers.
It should be noted that most of NCCI’s Board of Directors all work for insurance companies, many of whom sell workers comp insurance (including John T. Leonard, Maine Employers’ Mutual Insurance Company, Robert A. Lindemann, Zurich North America, Gary J. Thompson, The Hartford, Susan Doyle, Liberty Mutual Group, Bruce G. Kelley, EMC Insurance Companies, Craig L. Nodtvedt, Alaska National Insurance Company, and James C. Roberts, American International Group (AIG).
According to Steven Alexander, head of the State’s Office of Consumer Advocate, NCCI has recommended rates which overcharge businesses in the State of Florida by more than 25% over the past 10 years. He has recommended that NCCI be banned from filing rate increase requests on behalf of individual carriers, as he believes a conflict of interest exists in this current arrangement.
Yesterday, this bill was heard on second reading on the floor of the house. At the time it was heard, an amendment to the bill was offered by Rep. J.C. Plana. The primary changes offered in the amendment were that 1) it returned the attorney fee scale to the same level as it was prior to 2003 or a fee equal to fee paid by the carrier to it’s own attorney, which was greater; 2) it permitted claimants the opportunity to contract with their own attorney a fee in excess of the sliding scale provided under law; and 3) it denied carriers the opportunity to include fees paid to claimant’s attorneys and defense attorneys in their rate base calculations.
The sponsor of the amendment asserted that his amendment would best protect the rights of injured employees while helping to keep worker comp rates lower. Unfortunately, only 44 other members of the legislature (including me) agreed with Rep. Planas, and as such, his amendment failed.
Those of us who supported this amendment fear that should HB 903 pass the full legislature and be signed into law, access to the Court will be denied injured workers as they will face difficulty finding attorney’s willing to handle their claim if the amount in question is minimal. Additionally, many of us fear that there will be no incentive for a workers comp carrier to settle minor claims, as they know the claimant will have a difficult time retaining an attorney to represent their interests. As I expect this bill to pas the House next week, unless something in this bill changes prior to our next vote, for the sake of all workers in this State, I hope either the Senate or Governor do not let this bill become law.