Florida Chamber of Commerce Testimony To Office of Insurance Regulation Regarding Workers’ Compensation Rate Hearing

August 16, 2016

Thank you Commissioner Altmaier. And thank you to the Office of Insurance Regulation and Insurance Consumer Advocate Sha’Ron James for your open door policy on an issue that will substantially impact Florida’s competitiveness as well as the job creators that depend on it.

At the Florida Chamber, we believe that putting job creators and injured workers first is the right thing to do to keep Florida’s workers’ compensation system working.

Unfortunately, the Florida Supreme Court’s ruling in the Castellanos case is not about safety or protecting workers. The effect of the decision is to raise costs for no other reason than so plaintiff trial lawyers can raise fees.

In fact, in the Castellanos case, the plaintiff argued that the plaintiff trial lawyer should receive $38,000 in attorney fees for a case in which the injured worker was awarded only $800. That’s $800 for the injured worker, and $38,000 for the trial lawyer.

As we predicted, trial lawyers are back, suing even more. What we’ve seen since May is an increase in lawsuits – a result of the Castellanos and Westphal rulings that allow plaintiff trial lawyers to reach back into the past and seek higher fees on old cases.

So, how much is this going to cost?

NCCI tells us that the increase in lawsuits by trial lawyers, combined with the 19.6 percent workers’ comp rate increase, will cost Florida businesses potentially $1 BILLION or more in unfunded liability. That’s a lucrative deal for personal injury trial lawyers, but a raw deal for injured workers who won’t gain a dime, and may even be out of work longer.

Thirteen years ago, Florida had the highest rates in the United States. We were losing our competitiveness.

The Florida Chamber joined with then Governor Bush to help pass reforms that – over the course of the last 13 years – dropped workers’ comp rates by nearly 60 percent. That put Florida on par with other states, and also helped injured workers get back to work 10 days faster after experiencing an injury on the job.

That will all change as a result of the court’s decision. In fact, the proposed increase would mean Florida will have the highest rates in the Southeast.

Today I want to shed light on how this is going to impact Florida. The Florida Chamber has been talking to employers across Florida.

In fact, the Florida Chamber’s Workers Comp Task Force has already met more than half a dozen times to hear from large and small businesses, trade associations, and local chambers of commerce and workers comp experts.

Take, for example, Ron John Surf Shop. CEO Debbie Harvey, who co-chairs the Florida Chamber’s Workers’ Comp Task Force, says a 20 percent increase in workers’ comp rates means Ron Jon will no longer be able to add a new, mid-level employee to their team next year.

I wish I could tell you this is an outlier story, but it is not. Unfortunately, that’s the impact an increase of this magnitude could have on businesses – making them choose between hiring new employees or paying higher workers’ comp premiums.

This increase is particularly troublesome, and causing uncertainty. Especially considering many small businesses haven’t budgeted for dramatically higher workers’ comp fees.

Florida businesses care about their injured workers and want to make them whole. That’s how the system was designed to work.

But now, thanks to the Supreme Court and especially thanks to plaintiff trial lawyers, it’s ok to collect fees nearly 50 times as much as the injured workers judgement.

I remember when Florida had the highest rates in the country, and my fear is with this increase, we’ll have the highest rates in the Southeast. And rates could potentially spiral out of control again.

One thing is for certain, this will have a negative impact on Florida’s business climate.

It will likely impact Florida’s 60 consecutive months of job growth.

And perhaps most disturbing, is that this will be a self-inflicted wound that advantages trial lawyers instead of workers.

I encourage OIR to be 100 percent actuarially honest about what these massive fees the trial lawyers are pushing will do to the system. The more honest you are about what these cost are going to be, the more clear it will be that immediate action by the Florida Legislature will be necessary.

The Florida Chamber and the Florida Chamber’s Workers’ Comp Task Force look forward to working with OIR, the Division of Workers’ Compensation, and the Florida Legislature on developing a remedy to the Supreme Court’s decision.

On behalf of the Florida Chamber of Commerce and job creators in Florida, thank you.

Justices Hear Arguments Over Potentially Costly Solar Amendment

Florida Chamber Urges Supreme Court to Reject Ambiguous Amendment

Fresh from advocating for Florida families and job creators, the Florida Chamber of Commerce has returned from today’s Florida Supreme Court hearings, where Justices heard debate on a proposed amendment that could increase energy cost. A group behind Limits or Prevents Barriers to Local Solar Electricity Supply defended their proposed amendment before the Florida Supreme Court.

“As a large and growing state, Florida needs a diverse energy portfolio that includes solar energy, however, the proposed constitutional amendment mandates major changes in existing law, using language that is unclear and misleading,” said Attorney General Pam Bondi in June.

The latest Florida Chamber Political Institute (FCPI) poll shows that Floridians support solar energy, but they do not support a proposed solar amendment that could drive up energy costs. Only 41 percent of likely Florida voters support this proposal – falling far short of passage.

The Florida Chamber filed an Amicus Brief with the Florida Supreme Court opposing this amendment. As noted in the brief prepared by former Florida Supreme Court Justice Raoul Cantero, the Florida Chamber believes:

  • The solar initiative violates the single-subject requirement, and
  • The title and summary of the amendment are deceptive and misleading to Florida voters.

The Florida Chamber has a long-standing tradition of opposing amendments that can be addressed legislatively or through the state’s budget, an opinion former Florida Supreme Court Justice Raoul Cantero shares in regards to this amendment.

“The proposed solar amendment would put into the Florida Constitution policy requirements that could be accomplished through the Legislative process. Voters should only be asked to amend the state Constitution if the proposed amendment clearly covers a single subject, which this proposed amendment does not,” said former Florida Supreme Court Justice Raoul Cantero.

David Hart, Florida Chamber Executive Vice President, in interviews with members of Florida’s Capitol Press Corps, told reporters that Floridians support solar. However, as Hart explained, “they just don’t support this one.”

With 30 proposed constitutional amendments attempting to make their way onto the ballot and into Florida’s Constitution, voters will be looking closely at those that might increase their utility costs.

Add Your Voice:

Sign the Florida Chamber’s resolution opposing this bad solar amendment. Contact Greg Blose at gblose@flchamber.com to obtain the resolution.

Supreme Court Decision Further Harms Florida’s Economy/Job Growth

Florida Chamber Encourages a Legislative Fix to Bring Certainty Back to Employers and Workers 

TALLAHASSEE, FL. (June 9 , 2016) – Florida job creators were dealt another blow today as Florida’s high court, for the second time in less than two months, ruled against businesses in a case that causes even greater uncertainty in Florida’s workers’ compensation system, the Florida Chamber of Commerce said today. Today’s ruling comes just two weeks after NCCI announced a 17.1 percent recommended workers’ comp rate increase.

Today’s ruling in the Westphal v. City of St. Petersburg case declared the current system for temporary total disability (104 weeks) unconstitutional. The result of this case, compounded with the recent negative ruling in the Castellanos v. Next Door Company case, likely puts Florida’s workers’ comp rates back on the path toward the record level rates of the early 2000s.

“With job creators already facing a 17.1 percent workers’ comp rate increase, today’s ruling causes even more uncertainty, and is a further sign that Florida’s workers’ comp system is under attack,” said Mark Wilson, President and CEO of the Florida Chamber of Commerce. “A legislative solution for both cases will help bring certainty back to Florida’s job creators and injured workers that Florida’s workers’ comp system is working.”

In the last 13 years, the Florida Chamber has led efforts to help lower workers’ comp rates by nearly 60 percent. Those efforts continue today, as the Florida Chamber’s Workers’ Compensation Task Force has been engaging Florida’s highest elected leaders since last year, preparing them for this outcome and working with top legal minds to develop the right solution. In addition to task force meetings, six regional membership meetings (with more to come) have already taken place, and our local chamber federation is actively engaged – assessing the impact it will have on local businesses, and joining efforts toward solutions.

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Established in 1916 as Florida’s first statewide business advocacy organization, 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 crucial to secure Florida’s future. The Florida Chamber works closely with its Florida Political Operations and the Florida Chamber Foundation. Visit www.FLChamber.com for more information.
136 South Bronough Street, Tallahassee, FL 32301

Florida Chamber Expert Panel Discusses Possible Ramification

All eyes are on the Florida Supreme Court as they deliberate taking action on two cases that could significantly impact Florida’s workers’ compensation rates.

Keeping workers’ comp rates fair and not inflated by trial lawyer tactics is a top priority of the Florida Chamber of Commerce. On behalf of Florida’s business community, the Florida Chamber led efforts to help lower workers’ comp rates by more than 50 percent over the last 10 years.

The Florida Chamber is laser focused on both cases before the state’s high court and we are actively engaged, having filed an Amicus Brief in both cases. Recently, during the Florida Chamber’s Insurance Summit, a panel of workers’ comp experts shared their thoughts on both cases.

The panel discussed how these cases challenge the gap between temporary and total permanent disability, the legality of caps on attorneys’ fees, and whether workers’ comp should serve as an exclusive remedy. A decision against the business community in any one of these cases could have a significant impact on workers’ comp rates.

The Florida Chamber is committed to keeping you apprised of the outcome of these cases, and will share the high court’s ruling as soon as the opinion is released.

Florida Chamber Fights for Workers’ Comp Attorney Fee Caps in Supreme Court

When the Florida Supreme Court heard oral arguments today in a high profile workers’ comp case (Castellanos v. Next Door Company,) a Florida Chamber of Commerce and Florida Justice Reform Institute joint amicus brief served as a defense tool in a battle to maintain caps on attorneys’ fees in workers’ comp cases.

Former Justice Raoul Cantero, arguing on behalf of employer Next Door Company, cited the Florida Chamber/Justice Reform Institute joint amicus brief to refute arguments the petitioners made regarding the reasonability of attorneys’ fee caps.

Florida Chamber Executive Vice President David Hart, and I attended the proceedings on behalf of Florida’s employers.

This is the third workers’ comp case currently before the Florida Supreme Court challenging the constitutionality of the workers’ comp system. Another case is pending before the Third District Court of Appeal.

The Florida Chamber and our partners at the Florida Justice Reform Institute have filed an amicus curiae brief on each of these cases. These cases challenge the gap between temporary and total permanent disability, whether bad faith applies in workers’ comp and whether workers’ comp should serve as an exclusive remedy.

A decision against the business community in any one of these cases could have a significant impact on workers’ comp rates.

Oral arguments have been completed on each of the three cases before the Florida Supreme Court, and it is not clear on when the Supreme Court will make a decision. The Florida Chamber is committed to fighting on behalf of Florida employers. We are actively involved and monitoring these cases closely and are ready to take action when a decision is made.

Are Workers’ Comp Issues Impacting Your Business?

We want to hear from you. Share your workers’ comp story by emailing me at cjohnson@flchamber.com.