Murray v. Mariner Health/ ACE USA

Thursday, July 10, 2008 | 0

By McConnaughhay, Duffy, Coonrod, Pope & Weaver

In the 2003 reforms, lawmakers eliminated all claimant attorney hourly fees with one exception, that being a $150 hourly fee up to a maximum of $1,500 for one medical claim per accident.

It was the legislative intent as confirmed by subsequent case law to base such fees on a statutory fee schedule based on benefits paid to injured workers, which calls for claimant attorneys to receive 20% of the first $5,000 in benefits, 15 percent of the following $5,000, and 10% of the remaining benefits awarded in the 10-year period following the date of accident. As a means to further bolster that the fee provisions were followed, lawmakers specifically stated that judges of compensation claims couldn’t approve fees higher than what was spelled out in the law.

In i>Emma Murray v. Mariner Health/ ACE USA (SC07-244), a Judge of Compensation Claims found that an on-the-job
accident resulted in Murray needing surgery and that she also qualified for wage-loss benefits. Those medical and indemnity benefits were determined tobe in the amount of $3,224.21. Murray’s lawyer spent 84.4 hours on the case, which under the current contingency fee schedule equaled a total fee of $648.84 or $8.11 per hour. By comparison, the employer/carrier’s attorney spent 135 hours on the case and was paid $16,050, which equaled $125 per hour.

Based on this factual scenario, claimant attorneys put forward a number of constitutional objections including that the legislature interfered with the rights of injured workers to due process in the legal system. They also maintained that the statute as written doesn’t stop JCCs from approving higher fees.

If the Supreme Court rules in favor of the claimant attorneys, the decision has several important ramifications. It would not affect cases with dates of accident post Oct. 1, 2003, if the case was settled including all applicable attorney fees. However, it would affect all post Oct. 1 cases that are still open.

There is anecdotal evidence to suggest that claimant attorneys have held back claims for attorney fees in hopes of a favorable ruling. The court’s ruling is expected to lead to a flurry of legal activity.

A favorable claimant attorney fee ruling creates a problematic issue of how to calculate rates going forward, assuming that both attorney fees and overall awards increase. When the legislature enacted the 2003 reforms, the estimated first year savings of the law changes was a minus 14%, of which only 2% was attributed to the changes in the attorney fees statute. In subsequent years, however, it is statistically difficult to say how the changes in attorneys fees have quantifiably affected costs by changing the business practices of attorneys, carriers, and third-party administrators.

For example, over the last three years, claims’ frequency in Florida has dropped between 8% and 12.6%. While that is in keeping with national trends, some portion of those trends is attributable to the limits on attorneys fees.

The National Council on Compensation is likely to make a supplemental rate filing immediately following the court’s decision that would solely focus on the impact of the ruling on the system. There is some suggestion that the filing would be separate from the
annual rate filing that is made in late August. NCCI will not price the effects of this case on workers’ compensation costs until the court rules. The court’s ruling and the additional cost it could add to the system could also translate into a legislative battle next year to rewrite the attorneys fee statutory provisions.

McConnaughhay, Duffy, Coonrod, Pope & Weaver is a defense law firm with offices in nine Florida cities.