New Workers’ Comp Data Shows Skyrocketing Fees

Attorney fees in workers’ compensation cases are drastically increasing, according to newly released data from the Office of Judges of Compensation Claims (the Office).

Deputy Chief Judge David Langham presented the new findings during the Florida Chamber’s Capitol Days in Tallahassee.

Just as predicted after the Florida Supreme Court’s ruling in Castellanos v. Next Door Company, the 2016-2017 annual report by the Office shows that attorney fees for injured workers increased by 36 percent over the previous year, totaling $186 million.  This amount is the highest in claimant attorney fees that have been paid in over a decade.

Hourly attorney fees jumped by nearly 200 percent- from $25.8 million prior to the court decision to $75 million after.  The statutory attorney fee during the same time frame decreased 31 percent.

Adding to the figure is $254 million paid in the defense of workers’ compensation claims.  Florida is one of the few states where the employer/carrier pays both defense and injured worker’ attorney fees.

The Florida Supreme Court issued the Castellanos decision in April 2016, which declared the current attorney fee structure unconstitutional.  This resulted in a 14.5 percent, or $1.5 billion, increase on Florida job creators.  Prior to the Castellanos decision, workers’ comp premiums had decreased by nearly 60 percent after the legislature passed Florida Chamber-backed reforms in 2003 to first address attorney fees.

The Florida House is expected to pass its workers’ comp bill, HB 7009 by Rep. Danny Burgess, later this week. The Senate has not filed major workers’ comp reforms for this session.

 

Get Involved:

Help us create a solution that brings certainty back to employers and workers and join the Workers’ Comp Task Force today!

Workers’ Comp Rate Increase to Stay in Effect During Appeal

Yesterday evening, the First District Court of Appeals ruled that the 14.5 percent rate increase will continue to be in effect while the Office of Insurance Regulation (OIR) and National Council on Compensation Insurance (NCCI) appeal a case from the Leon Circuit Court last month. This case, brought forward by a trial lawyer, argued that the rate-making process violated Florida’s Sunshine Law. The DCA also granted NCCI’s motion to expedite the case, and set the following timeline:

  • January 11, 2017
    OIR and NCCI must file arguments on the merits of the case
  • January 23, 2017
    James Fee, the trial attorney who brought forward the case, must respond to OIR and NCCI’s filing, and
  • February 2, 2017
    Final briefs must be filed.

What This Means for Florida Businesses:

The Leon Circuit Court in its decision invalidated the rate increase, but the District Court of Appeals allowed the rate to take effect on December 1 for all new and renewal policies. This case is a red herring, meant to distract from the real problem- increased attorney fees as a result of the Castellanos v. Next Door Company Florida Supreme Court decision. In fact, claimant attorney fees are up over 20 percent since the Supreme Court’s decision in April.

 

What’s Next:

Today, the Florida Chamber will testify before the Florida Senate’s Banking & Insurance Committee to fight for a workers’ comp system that works. Share your story with us by contacting cjohnson@flchamber.com today.

Learn how the Florida Chamber of Commerce Workers’ Comp Task Force is working on a legislative solution to the $1.5 billion increase to Florida’s business community.

Keep Florida’s Workers’ Comp Working

Florida’s business climate is in jeopardy due to recent Florida Supreme Court decisions that could result in a nearly 20 percent workers’ comp rate increase for Florida job creators. This significant increase could mean the difference between hiring a new employee, increasing employee benefits, or paying higher workers’ comp premiums. Business growth requires workers’ compensation premiums to be fair and not inflated by unnecessary costs. An improved business climate overall will allow Floridians to get back to work and reduce the cost of living for families and small businesses. Lowering the cost of business in our state is what will continue to attract and retain the top industries and professionals, and allow existing businesses to grow.

Keeping our workers’ comp system fair and not inflated by trial lawyer tactics and other unnecessary costs will help lower the cost of doing business in Florida. The Florida Chamber has led the effort to help lower workers’ comp rates by nearly 60 percent in the last 10 years. Workers’ comp rates are now spiraling in the wrong direction, due to cases ruled by the Florida Supreme Court (Castellanos v. Next Door Company and Westphal v. City of St. Petersburg). Workers’ comp rates are proposed to increase by 19.6 percent on October 1. The Castellanos case threw out the current cap on attorneys’ fees and, in this particular instance, the attorney was seeking $38,000 in fees for securing $800 in benefits for the injured worker. Plaintiff attorney maneuvers like we’re seeing with workers’ compensation are reflective of a larger lawsuit abuse problem in Florida. In fact, a national survey released in shows Florida’s lawsuit climate worsening – ranking at an all-time low 44 out of 50 states, or in the bottom 10. And that’s important, because 75 percent of companies surveyed say a state’s lawsuit environment is likely to impact important business decisions at their company, such as where to locate or whether or not to expand.

With rates going up significantly, the Florida Chamber is leading the effort to mitigate the Florida Supreme Court’s decision before the Legislature. To secure Florida’s future, we must keep Florida’s workers’ comp system working. How would increased workers’ comp rates impact your business? Let us know by contacting Carolyn Johnson.

 

> DOWNLOAD Our Workers’ Compensation One Pager

> JOIN the Florida Chamber’s Workers’ Compensation Task Force

Florida Supreme Court Ruling Bad for Businesses and Jobs

Florida Chamber of Commerce to Lead Efforts to Keep Workers’ Comp Working &
Ensure the Voices of Job Creators Are Heard

 “As Florida’s leading advocate fighting to keep workers’ comp working, the potential impact of the high court’s ruling could threaten Florida’s improving business climate. The Florida Chamber remains laser focused on ensuring workers’ comp rates are fair, and we will lead the effort before lawmakers and in the halls of justice to ensure the voices of job creators are heard.”

– Mark Wilson, President and CEO, Florida Chamber of Commerce

TALLAHASSEE, FL (April 28, 2016) – Florida’s high court today ruled against job creators in a case that could threaten Florida’s improving business climate and force workers’ compensation rates to increase, the Florida Chamber of Commerce announced today.

Even though business’ workers’ comp rates have continued to decrease, today’s Florida Supreme Court ruling in the Castellanos v. Next Door Company case could potentially push rates toward the near record levels of the early 2000s – levels that forced many Florida businesses to stop hiring and to go out-of-business. Justices ruled that the current attorney fee provision for workers’ comp cases is unconstitutional.

“As Florida’s leading advocate fighting to keep workers’ comp working, the potential impact of the high court’s ruling could threaten Florida’s improving business climate,” said Mark Wilson, President and CEO of the Florida Chamber of Commerce.

NCCI, the state’s ratemaking agency, will be looking at the impact to workers’ comp rates as a result of today’s decision. The last time the Florida Supreme Court threw out the attorneys’ fee provision, in the Emma Murray case in 2008, rates increased by over six percent.

Just as it led efforts for more than 10 years to help lower rates by almost 60 percent, and fully anticipating an anti-jobs outcome by Florida’s activist court, the Florida Chamber – which filed an Amicus Brief in this case – has already begun leading the charge to once again keep workers’ comp working.

In a letter to Governor Rick Scott, President Andy Gardiner and Speaker Steve Crisafulli, Florida Chamber President Mark Wilson wrote:

“…we have created a short-term task force that has already begun the process of preparing for a legislative response and remedy should the court decide against the legislature and small businesses.”

The Florida Chamber Workers’ Comp Task Force is co-chaired by Debbie Harvey, Chair of the Florida Chamber’s Small Business Council, and Steve Knopik, Immediate Past Chair of the Florida Chamber Board of Directors.

“The Florida Chamber remains laser focused on ensuring workers’ comp rates are fair, and we will lead the effort before lawmakers and in the halls of justice to ensure the voices of job creators are heard,” said Wilson. Click here to read a guest editorial, published in the Pensacola News Journal, on this issue by Wilson.

While the Florida Chamber is disappointed in today’s Castellanos ruling, we applaud their decision to discharge jurisdiction in the Stahl v. Hialeah Hospital. This case had oral arguments earlier this month.

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The Florida Chamber of Commerce is the voice of business and the state’s largest federation of employers, chambers of commerce and associations, aggressively representing small and large businesses from every industry and every region. The Florida Chamber works within all branches of government to affect those changes set forth in the annual Florida Business Agenda, and which are seen as critical to secure Florida’s future. The Florida Chamber works closely with its Political Operations and the Florida Chamber Foundation. Visit www.FloridaChamber.com for more information.