Statewide business associations would like lawmakers to limit what injured workers can pay their attorneys, but a new state report shows it’s not injured workers driving legal costs in the system.
The amount of money injured workers spent on plaintiffs’ attorneys during fiscal year 2021-2022 decreased by nearly 1.9% over the prior year, while insurance company defense fees increased by nearly 5.6%, according to the report released by the Office of the Judges of Compensation Claims.
In all, $504,243,763 was paid in legal fees in a system that is supposed to be self-executing. That’s a 2% increase over the $494,505,716 spent on plaintiffs’ attorneys and defense attorneys in fiscal year 2020-21.
Slightly more than 53% of the overall attorneys’ fees that year were to defense attorneys.
Workers’ compensation is a no-fault system meant to protect workers and employers. It is supposed to provide workers who are injured on the job access to medical benefits they need to be made whole. In exchange for providing those benefits, employers generally cannot be sued in court for causing injuries.
The system is set up to avoid lawsuits, but disputes about benefits often lead to legal fights. When they do arise, Florida relies on the OJCC to help settle claims.
For more than a decade, plaintiffs’ fees in Florida’s workers’ compensation system were capped at 20% of the first $5,000 in benefits secured, 15% of the next $5,000, and 10% of the rest to be provided during the first decade. There were no restrictions on what insurers can spend defending workers’ compensation cases. The Florida Supreme Court in 2016 issued a 5-2 decision in Castellanos v. Next Door Company that resulted in the elimination of the strict fee caps on attorney’s fees injured workers accrue.
Following the ruling, along with another tossing a two-year ban on benefits, regulators approved a 14.5% rate increase. Since then, workers compensation premiums have decreased in Florida for six consecutive years. And rates are being reduced by an average of 8.4% effective Jan. 1, 2023.
But the makeup of the Florida Supreme Court has shifted. Four of the five justices who struck down the fee caps are no longer on the court and their replacements are decidedly more conservative, winning praise from groups such as the Florida Justice Reform Institute. Meanwhile both justices who dissented on the opinion remain on the court.
The more conservative shift has whet the appetite of business interests to have the caps, or a version thereof, reinstated.
Florida Chamber of Commerce Vice President of Government Affairs Carolyn Johnson told Florida Politics at the time she is hopeful rates continue to decrease in the future despite “cost drivers” like “uncapped attorney fees.”
It’s not clear though how willing the Florida Legislature is to reinstate some kind of cap on fees.
The Legislature agreed during a Special Session to eliminate a law allowing homeowners who successfully sued their insurance company to receive their attorney’s fees.
Homeowners insurance continues to be a priority for lawmakers as they look toward the 2023 Legislative Session. But Florida Senate President Kathleen Passidomo said the Senate still will have time to consider other insurance issues like workers’ compensation, “letters of protection” and personal injury protection.
“Stay tuned,” she told Florida Politics last week.
Passidomo said she spent an entire day speaking to members about their priorities. “Especially new members … boy do they have some ideas. I was like ‘Oh my God, stay tuned,'” Passidomo said. “We’re here to work. They have ideas and we’re going to file bills and we are going to see what they come up with.”
The lengthy 300-page OJCC report provides insights into the entire workers’ compensation system, not just attorneys’ fees. For example, judges presiding over compensation claims authorized worker benefits in excess of $1 billion in FY 21-22.
The report also shows the number of workers’ compensation cases in FY 21-22 was up from the previous year, but the overall number of petitions filed is still below the levels right before the COVID-19 pandemic.
There were nearly 31,000 cases filed — a nearly 3.8% increase from the previous year — and nearly 72,000 petitions overall, which was a 3% increase. (Sometimes an injured worker can file multiple petitions connected to a single incident.)