Fla. Court Overturns WC Attorney Fee Limits

In a decision that will reportedly severely undermine the positive impact of 2003’s landmark workers’ compensation reforms, the Florida Supreme Court today overturned the law that had eliminated hourly attorney fees, according to the American Insurance Association (AIA).

“The 2003 legislative reforms rescued what was a failing workers’ comp system,” said Cecil Pearce, AIA vice president, southeast region. “It was failing for workers, employers and insurers. Today’s decision in Murray v. Mariners Health/ACE USA is an unfortunate setback for a workers’ comp system that has seen significant improvement since 2003, including rate reductions of over 50 percent for Florida businesses.”

The 2003 reforms addressed a number of issues, including extensive fraud and noncompliance with workers’ comp coverage requirements, and steadily increasing system costs. A key driver of claim costs prior to the reforms was hourly attorney fees, which made the cost of litigated claims 40 percent higher in Florida than in any other state because of the increased litigation. The 2003 reforms linked attorney fees to the value of benefits secured through a fee percentage schedule, eliminating the ability of claimant attorneys to bill by the hour. With that law now overturned, it is reportedly expected that an increase in workers’ comp premiums will be inevitable.

“AIA will be working with a coalition of Florida businesses and insurers to encourage the Legislature to address the court’s concerns as expressed in the Murray decision, and put the workers’ compensation system back on track,” said Pearce. “The increase in claim costs caused by hourly attorney fees is bad news for Florida’s already struggling economy. Restoring the attorney fee reform provision will be a top priority.”