With limited resources at their disposal, court systems nationwide endeavor to operate with judicial economy. This is one reason why the settlement of cases is encouraged.
Presently, Florida has twenty-nine judges of workers’ compensation claims (JCC) statewide to handle a workforce of some 10 million people. Each JCC’s docket is bursting at the seams. It could be worse.
Prior to the decision in Miles v. City of Edgewater Police Dept/Preferred Governmental Claims Solutions, 190 So. 3d 171 (Fla. 1st DCA 2016), it was a crime in Florida for an attorney to accept a fee from a claimant in a workers’ compensation case that was not approved by a Judge of Compensation Claims (JCC) in accordance with the fee formula contained in section 440.34(1), Florida Statutes. Section 440.105(3)(c), Florida Statutes. The crime was punishable by up to one year in prison (s. 775.082) and a fine (s. 775.082). Any lawyer violating 440.105(3)(c) could also expect to be suspended or disbarred.
In Miles, the JCC rejected an attorney/client contract in which the client, an injured worker, and her union agreed to pay a workers’ compensation lawyer a fee in excess of the amount allowed under 440.34. Because it would have been a financial hardship for the lawyer to handle the case under the formula set forth in 440.34, she withdrew from the case. Unable to find a lawyer to take her case, the injured worker proceeded Pro Se. Her claims were denied by the JCC.
Claimant argued on appeal that Florida Statutes 440.105 and 440.34 violated the First Amendment of the Constitution of the United States and the fundamental right to contract. The First District Court of Appeal agreed.
In conclusion, the restrictions in sections 440.105 and 440.34, when applied to a claimant’s ability to retain counsel under a contract that calls for the payment of a reasonable fee by a claimant (or someone on his or her behalf), are unconstitutional violations of a claimant’s rights to free speech, free association, and petition — and are not permissible time, place, or manner restrictions on those rights. Likewise, those provisions also represent unconstitutional violations of a claimant’s right to form contracts — and are not permissible police power restrictions on those rights. Miles at 184.
Before Miles changed the Claimant-paid fee landscape, the statutory fee was considered presumptively correct. Alderman v. Florida Plastering, 805 So.2d 1097 (Fla. 1st DCA 2002). The statutory fee at the time Miles was decided was
- 20% of the first $5,000
- 15% of the next $5,000
- 10% on all amounts above $10,000
Since Miles, the standard contingency fee rate has settled in at 25% to 33-1/3%.
It is time-consuming, costly, and risky to represent injured workers on a contingency fee basis. Being limited to the statutory fee made it difficult for lawyers to undertake the responsibility. Like in the Miles case, this led to many injured workers being left to fend for themselves.
Just one week after Miles was decided, the Florida Supreme Court ruled in another attorney’s fee case. Whereas Miles concerned claimant-paid attorney’s fees, Castellanos v. Next Door Company, 192 So.3d 431 (Fla. 2016) addressed carrier-paid attorney’s fees. The Supreme Court framed the certified question as follows:
WHETHER SECTION 440.34, FLORIDA STATUTES (2009), WHICH MANDATES A CONCLUSIVE FEE SCHEDULE FOR AWARDING ATTORNEY’S FEES TO THE CLAIMANT IN A WORKERS’ COMPENSATION CASE, IS UNCONSTITUTIONAL AS A DENIAL OF DUE PROCESS UNDER THE FLORIDA AND UNITED STATES CONSTITUTIONS.
Under the portion of the statute addressed by the Court, insurance carriers were responsible for paying fees to Claimant’s attorneys for successfully prosecuting claims. The rub is that the statute limited the fee to the percentages outlined in 440.34(1). Castellanos involved a challenge to the limitation. The facts of the case, as outlined by the Court, demonstrate the statute’s crippling outrageousness:
The Petitioner, Marvin Castellanos, was injured during the course of his employment with the Respondent, Next Door Company. Through the assistance of an attorney, Castellanos prevailed in his workers’ compensation claim, after the attorney successfully refuted numerous defenses raised by the employer and its insurance carrier. However, because section 440.34 limits a claimant’s ability to recover attorney’s fees to a sliding scale based on the amount of workers’ compensation benefits obtained, the fee awarded to Castellanos’ attorney amounted to only $1.53 per hour for 107.2 hours of work determined by the Judge of Compensation Claims (JCC) to be “reasonable and necessary” in litigating this complex case.
The Court decided the certified question as follows:
This case asks us to evaluate the constitutionality of the mandatory fee schedule in section 440.34, Florida Statutes (2009), which eliminates the requirement of a reasonable attorney’s fee to the successful claimant. Considering that the right of a claimant to obtain a reasonable attorney’s fee has been a critical feature of the workers’ compensation law, we conclude that the mandatory fee schedule in section 440.34, which creates an irrebuttable presumption that precludes any consideration of whether the fee award is reasonable to compensate the attorney, is unconstitutional under both the Florida and United States Constitutions as a violation of due process. See art. I, § 9, Fla. Const.; U.S. Const. amend. XIV, § 1.
Hence, in a one-week period of time two very different, monumental attorney’s fee court decisions were handed down.
A little history is in order at this point. In 2002, Florida’s Republican legislature passed legislation believing it would protect workers’ compensation insurance carriers against having to pay reasonable fees to claimants’ attorneys after losing in court. The legislation was signed into law by Florida Governor Jeb Bush. Bush and the legislature did not like that claimants could afford to go toe-to-toe against carriers in court to recover benefits. The idea was to neuter claimants’ lawyers by making it impossible to get paid fairly for their services. In a matter of statutory interpretation, in 2008 the Florida Supreme Court decided that because the word “reasonable” remained in the statute, carriers were required to pay reasonable fees. See Murray v Mariners Health, 994 So.2d 1051 (Fla. 2008). Not to be outdone, the next legislative session Republican legislators removed the word “reasonable” from the statute, laying the foundation for the Castellanos decision.
With the Castellanos decision, carriers feared that claimants’ attorneys would purposely churn cases to generate large carrier-paid fees. The Miles decision has kept this from happening. No longer constrained by the unreasonably low statutory fee, claimants’ attorneys can be compensated fairly by managing cases to the point of being ripe for settlement. It is no longer necessary for workers’ compensation lawyers to engage in combat in every case to make a living.
This is not to say that tough litigation is never required. In our adversarial system, it is sometimes necessary to have matters decided by judges of compensation claims. However, because of Miles, a large percentage of cases that would otherwise be hotly contested are now resolved amicably by the parties.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.
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