By Andrew D. Spence
The Florida Supreme Court recently made a decision concerning a problem that has plagued the injured workers’ ability to obtain all benefits owed under Florida’s workers’ compensation laws, under Florida Statutes 440.01-440.60. This decision, as reported by attorney Andrew Spence, affects nearly all injured workers’ in the State of Florida, encouraging pursuit of benefits even when the value of the benefit at issue is minuscule. To do so, Florida’s Supreme Court struck down the irrebuttable fee schedule in Florida Statute 440.34.
In 2009, the legislature amended the laws governing attorney’s fees in workers’ compensation cases, eliminating a single word, “reasonable,” when determining the attorney’s fee when successfully obtaining benefits for injured workers. For example, post 2009, if the injured worker was owed $100.00 for lost wages due to his or her work place injury, the Employee’s attorney would be entitled to an attorney’s fee of $20.00 if the benefit was successfully obtained, even if the issue litigated all the way through a trial, no matter the number of hours invested in the fight for the $100.00. In this example, if the Employee’s attorney invested 50 hours to prepare for and attend trial, the statutory rate of pay for the Employee’s attorney if successful would be $0.40 per hour. To add insult to injury, in a loser pay system, the Employee would owe the insurance company and/or Employer the cost of said trial if the Employee did not prevail at trial. So, you can see the obvious problem in weighing the risk versus the reward for successfully obtaining the $100.00. Accordingly, this problematic issue was examined by the Florida Supreme Court in Marvin Castellanos v. Next Door Company, et al., case no. SC 13-2082 (2016).
In Castellanos, the Employee’s attorney successfully obtained benefits for his client, defeating numerous defenses raised by the insurance company and Employer, and the attorney’s fee amounted to $1.53 per hour for the 107.2 hours performed to successfully obtain the benefits at issue. The Court found that the conclusive, irrebuttable statutory presumption regarding attorney’s fees in the 2009 statute was unconstitutional. In doing so, the Court reasoned that without the right to an attorney with a reasonable fee, the workers’ compensation law did not provide the intended self-executing delivery of benefits to injured workers. Additionally, Insurance companies were intrinsically encouraged to raise multiple defenses, causing injured workers difficulty hiring an attorney to pursue benefits on their behalf.
Now, due to the decision in Castellanos, attorneys who successfully obtain benefits for an injured worker are again entitled to a reasonable attorney fee, encouraging attorneys to pursuit of benefits no matter what the value of the benefit is. Attorneys helping injured workers are no longer bound by the law that, at times, prevented pursuit of low value disputes. Further, insurance companies have more of an incentive to provide benefits when proper because the failure to do so results in a penalty of owing reasonable attorney’s fees, which at times far outweighs the benefits sought. We hope this change in the law will reduce the wrongful denial of benefit and insurance companies will be more likely provide benefits under the workers’ compensation laws.