Removal of 'Reasonable' Creates a Ghost Town in Work Comp Court

Monday, May 6, 2013 | 0

When I first began practicing law in the mid-1990s, I was one of many young attorneys, aged 28-35, who had embarked upon a career in workers’ compensation law. In those days, the Office of the Judges of Compensation Claims was a very busy place. The St. Petersburg District Office had two judges and two mediators. On any given day, there would be 10 to 15 mediations taking place and several hearings. Today, the place is a ghost town with a single judge and a single mediator.

Why is it so empty? I can promise you that it is not because workers’ compensation insurance companies have suddenly become reasonable and begun to pay for the medical care and disability benefits that injured workers are entitled to under the Florida Workers’ Compensation Law. It is because the state Legislature has so limited an injured worker's right to hire an attorney, that injured workers are hard-pressed to find a lawyer who is willing to represent them and take their case in front of a judge.

The Florida Workers’ Compensation Law has always limited the way in which an injured worker's attorney is compensated. A claimants' attorney (as the lawyers who represent injured workers are known in workers’ comp circles), must ALWAYS have his/her fees approved by a judge. Failure to do so is a crime. If you are an injured worker, the law prohibits you from paying a lawyer by the hour and it severely limits the contingency fee percentage you may pay your lawyer. Perhaps this would be fair if the workers’ compensation insurance carriers were restricted in the same manner, but they are not. They can hire any lawyer they want and pay them as much as they want. Seem fair? Seem like a level playing field? Hardly.

In a sense, it is like using Medicaid for your health insurance. For those Floridians who cannot afford health insurance, Medicaid may be available. While there are some good physicians who still accept Medicaid patients, many of the best physicians do not. This is because the reimbursements are so low that it can actually cost a physician to see a patient who is on Medicaid. Similarly, in the workers’ compensation system, many very good attorneys have stopped representing injured workers, and those that still do must be very careful to watch how much time they spend on cases, or they will simply go out of business.

How and when did this happen? In 2009, the state Legislature removed a single word from the Florida Workers’ Compensation Law. That word was “reasonable.” F.S. 440.34 is the statute that limits the attorneys’ fees payable to a claimants’ attorney. Effective July 1, 2009, those fees are no longer required to be “reasonable,” and they are limited to a very low percentage. So, injured workers’ attorneys only get paid IF they win, and only get a small percentage of the value of the benefit they have secured for their client. To compound the problem, since injured workers rarely can afford to pay for the costs of presenting their case to a judge, claimants’ attorneys are also forced to advance thousands of dollars in costs to get the evidence they need to win the case for their client. So you may have a case where you spend $2,500 in costs, but you only get paid $500 for a fee and you have to spend 30 hours to win. Would you risk $2,500 of your own money to MAYBE get paid $500 after you spent 30 hours of time? You would be better off investing the money and spending no time at all.

Here is an example of a recent case I handled: my client was denied temporary disability benefits for a period of two weeks. To her, the money they refused to pay was very important. It would put food on her table. I demanded that the insurance carrier pay the benefits. I sent letters and emails. I called. They did not respond. I gathered the medical records to support my client’s claim and I filed a petition for benefits for this two-week period. I responded to discovery requests from the defense attorney. I prepared for and attended my client's deposition. I attended a mediation. I prepared a pretrial stipulation. Three weeks before trial, the workers’ compensation carrier relented and agreed to pay her the benefits we sought in the petition. She was paid a total of $2,086.55. I was forced, by the unreasonable and baseless denial of the insurance carrier, to spend over 20 hours of time securing my client’s disability benefits. Under the 2009 Florida Workers’ Compensation Law, my attorney’s fee (which no longer has to be reasonable) is a whopping $417.31, or $20.87 per hour (it costs well over $100 per hour to run my office before I get paid). Prior to the 2009 changes in the law, I could petition the court to get paid a “reasonable” fee based upon my hourly rate. Not anymore. Result: I have to limit the number of such cases I take.

There have been literally thousands of such cases across the State of Florida since 2009, many with hourly attorneys’ fees under the minimum wage.

In Jennifer Kaufman v. Community Inclusions, Inc./Guarantee Insurance Co., the claimant's attorney successfully prosecuted claims against the employer/insurance carrier. For his services, which consumed 100.3 hours, he received a whopping court-awarded fee of $648.41, or $6.48 per hour. (The fee was awarded by Judge E. Douglas Spangler, Jr. To Judge Spangler's credit, he wrote in his Final Compensation Order that the attorney deserved a fee in excess of $25,000, but that his hands were tied by the workers' compensation attorney's fee statute, 440.34. Judge Spangler also expressed dismay that the employer and carrier were allowed to pay their own defense attorney $14,720.) The First District Court of Appeal upheld the small award.

This reality has been driving good lawyers out of the workers’ compensation system and keeping new, young lawyers away. The result: fewer claimants’ attorneys who are willing to represent injured workers and fight for the benefits to which they are entitled. Without these lawyers, unrepresented injured workers have no chance.

Imagine you are injured on the job. The insurance company denies your claim. You cannot find a lawyer. You cannot work. To make the point, let’s assume you know everything you need to know regarding the Florida Workers’ Compensation Law and the Rules of Procedure for Workers’ Compensation Adjudications (which would be no small feat). You realize that in order to challenge the “insurance doctor” that the carrier sent you to, you must have your own “independent medical examiner." This is the doctor who will review all of your medical records, do a physical examination of you and write a report that you can submit to the judge. So, you figure out which doctor to see, you collect all of your medical records, you deliver them to the doctor, you prepare to ask the doctor all the right questions so that you can win your case and you still have to pay the doctor $1,500 for the evaluation, which you simply cannot afford. So, you don’t get the IME, but without your IME, you cannot win.

The costs of the case are a small problem, but if you have no money, you are done. Game over. That is even assuming you can navigate the complex law and rules of procedure in most workers’ compensation claims.

There is currently a case pending before the First District Court of Appeal that deals with an injured worker who wanted to pay a lawyer by the hour to defend him in a hearing on costs the insurance carrier was asking him to pay. The Judge of Compensation Claims refused to allow the injured worker to pay his attorney an hourly fee, citing the law that prohibits an injured worker from doing so. In this particular case, the injured worker was unable to find a lawyer who would represent him on a contingent fee basis. Without the ability to pay the lawyer by the hour, he was forced to represent himself. So, he went to a hearing before the judge and lost. Now he owes the workers’ compensation carrier over $17,000. Do you think the workers’ compensation carrier was represented by a lawyer at that hearing? You bet they were!

There is only one beneficiary of a workers’ compensation system without claimants’ attorneys. Can you guess who that might be? Here’s a clue: it ain’t the injured worker. A system where lawyers are routinely paid less than their office staff is a system that will soon be without lawyers.

This is exactly why the workers’ compensation insurance industry has spent so much money in Tallahassee lobbying. They like shooting ducks in a barrel. This new law has made it so difficult for injured workers to find good representation that the courtrooms across the state are beginning to grow cobwebs and tumbleweeds, which is just fine as far as the insurance industry is concerned. How did Dick the Butcher put it in Shakespeare’s Henry VI? “First thing we do, let’s kill all the lawyers!” Well, they can’t kill us, so instead they banish reasonableness from the workers’ compensation law, hoping to turn the courtrooms of the Offices of the Judges of Compensation Claims into ghost towns. It is working.

Scott Marshall is a partner with the Marshall & Anzalone law firm in Palm Harbor, Fla. This column originally appeared at the Clearwater Legal Examiner and is reprinted with permission.