In 2003 the Florida Legislature extensively amended the workers’ compensation statute with SB-50A. The amendment which received the greatest attention and most controversy was the amendment to Florida Statute 440.34 that limited attorney fees for benefits secured to a strict contingency fee schedule. As an alternative to the contingency fee schedule, a Judge of Compensation Claims may, for medical only cases, approve an attorney’s fee not to exceed $1,500.00 only once per accident, based on a maximum rate of $150.00 per hour if the Judge of Compensation determines that the fee schedule, based upon benefits secured, fails to fairly compensate the attorney.

As noted by the First District Court of Appeal, the attorney fees paid to claimant’s counsel are “no longer based on services rendered, but instead is based on the value of the benefits secured”. Wood v. Florida Rock Industries, 929 So.2d 542, 543 (Fla. 1st DCA 2006), Rev. Den. 935 So.2d 1221 ( Fla. 2006). This amendment did not occur in a vacuum. Florida was in the midst of a workers’ compensation crisis driven in part by an hourly attorney fee paid by the Employer/Carrier that encouraged litigation over any and all benefits. In 2003, Florida workers’ compensation insurance rates were among the most expensive in the United States . Since 2003 Florida has seen a cumulative drop in its workers’ compensation rates of over 60%.

Last year, five years after the amendment became law, the Florida Supreme Court issued its opinion in Emma Murray v. Mariner Health, 994 So.2d 1051 (2008). The ruling did not address the constitutionality of the 2003 attorney fee amendments but did hold:

…based upon the plain language of the statute, that when a claimant is entitled to recover attorney fees from a carrier or employer as provided by section 440.34(3)(a),(b),(c) or (d), the claimant is entitled to recover “a reasonable attorney’s fee.” See §440.34(3), Fla. Stat.(2003). Section 440.34(3), does not define “reasonable attorney’s fee,” and an ambiguity results when subsection (1) and subsection (3) are read together. Accordingly, we have determined that reasonable attorney fees for claimants, when not otherwise defined in the workers’ compensation statute, are to be determined using the factors of rule 4-1.5(b) of the Rules Regulating the Florida Bar. See Lee Eng’g & Constr. Co. v. Fellows, 209 So.2d 454, 458 ( Fla. 1968) (applying Canon 12 of the Canons of Professional Ethics, the predecessor to rule 4-1.5(b)).

Based on the Murray decision, Florida’s Office of Insurance Regulation (OIR) approved a 6.4% rate increase in workers’ compensation rates which became effective April 1, 2009.

On May 29, 2009 Governor Charlie Crist signed into law HB 903. The law was in response to the Florida Supreme Court’s ruling, and provided the fee awarded by the Judge of Compensation Claims cannot exceed the strict scheduled fees set forth in Florida Statute § 440.34. This was done by removing the word “reasonable” in Florida Statute § 440.34(1). The law becomes effective July 1, 2009. It has been suggested by some observers that the law is unconstitutional and will be struck down by Florida ’s Supreme Court. Opponents of the legislation allege it somehow impairs a claimant’s ability to secure counsel and their access to the courts, as well as causing due process and equal protection violations.

No litigant in a workers’ compensation case has a constitutional right to counsel. If a denial of access to courts is to be the basis for a future constitutional challenge, the aggrieved claimant must prove the legislature abolished a prior common law right without providing a reasonable alternative. See, Kluger v. White, 281 So.2d 1 ( Fla. 1973). Neither claimants, nor their attorneys, had any common law right to receive an attorney’s fee based upon any specific method prior to Florida adopting its workers’ compensation statute in 1935. There was even a short period until 1941 where an injured employee was solely responsible for paying their own attorney fee.

The only conceivable way an equal protection challenge will be successful is if claimant’s counsel can establish there is no rational basis whatsoever for the statutory classification. See Florida High Sch. Activities Ass’n, Inc. v. Thomas, 434 So. 2d 306 ( Fla. 1983). A workers’ compensation claimant is not part of a suspect classification, so therefore “the statute need only bear a reasonable relationship to the legitimate state interest. Some irregularity or impression will not render a statute invalid.” Acton v. Ft. Lauderdale Hospital, 440 So.2d 1282, 1284 ( Fla. 1983). In at least two other Florida statutory schemes claimant lawyers are limited to a strict percentage of recovery. Claims brought against the State of Florida and eminent domain proceedings. Both set forth a fixed cap on a percentage based contingent fee recovery.

In a prior workers’ compensation case involving a due process challenge, the First District Court of Appeal held that such rights are only violated when a party is denied a meaningful, full, and fair opportunity to be heard and present evidence and testimony. Rucker v. City of Ocala, 684 So.2d 836, 841 (Fla. 1st DCA 1997). While there may be anecdotal evidence of claimants unable to find counsel the statistics show otherwise. The Office of the Judge of Compensation Claims is statutorily required to prepare an annual report on the status of the system. Those reports do show a decrease in the number of Petitions For Benefits filed since the 2003 statutory changes. However, recent Petition filings exceed the filings in the late 1990s when hourly attorney fees were available to claimant lawyers. Additionally, the Office of the Judge of Compensation Claims reports that the percentage of pro-se claimants as a percentage of Petitions filed with the Department of Administrative Hearings decreased from the eight percent (8.26%) prior to 2003 to over six percent (6.30%) in 2006-2007. Looking at how Florida compares to other States is also telling. According to NCCI the amount of attorney involvement in workers’ compensation claims in Florida was 20%, which exceeds the national average of 16%.

While a constitutional challenge to Florida Statute § 440.34(3) is a certainty, significant obstacles are present. If the challenge is successful and employer/carrier paid hourly attorney fees are reinstituted it is unlikely in the foreseeable future that the Legislature will have the political will to pass a bill again doing away with hourly attorney fees. Even if such a bill could be passed, Florida will have a different Governor regardless of political party. As all this unfolds it will be interesting to watch. The ultimate impact on all stakeholders will be profound. Certainly it is hoped by all that a challenge to the attorney fee statute will not take five years as with Emma Murray.

© Copyright 2009 Matthew Bender & Company, Inc., a member of the LexisNexis Group. All rights reserved. This article was excerpted from Dubreuil's Florida Workers' Compensation Handbook, 2009 Edition (to be published August 2009).