Q- Why don’t sharks eat lawyers?
A- Professional Courtesy.
Yes, a bad lawyer joke folks. Love or hate them – they are here to
stay as part of our “culture”. Lawyers, sharks….. as
summer time comes to close with a solar eclipse on the horizon, a movie
scene, and line from a classic Steven Spielberg movie of the 1970’s,
Jaws, comes to mind:
While aboard a small fishing vessel, a trio of hunters in search of the
man-eating predator (i.e. “Jaws) finally get a full view of the
toothy villain, a shark who only happens to resemble a bus with a jaw
full of bone-crushing daggers for teeth and also who happens to have a
taste for human flesh….
Within moments after observing the massive toothy beast., police chief
Martin Brody calmly tells World War II veteran Quint, “You’re
gonna’ need a bigger boat”, cigarette still dangling from his lip.
This line captures the film’s combination of shock, terror, with
a tinge of humor at the situation. A mixture of emotions not unlike emotions
perhaps felt when contemplating the possible impact of the most recent
2016 Florida Supreme Court decisions on fees upon the workers’ compensation
industry as a whole.
With an increase once again in carrier paid fees (i.e. hourly fees which
are to be based on benefits actually secured by the injured worker’s
attorney on behalf of the claimant) and Miles fees (claimant paid fees
paid by the claimant to his/her own attorney), are we heading towards
a frenzy with no regards to our moral codes in keeping an eye on the fundamental
purpose underlying the WC system of a “self-executing system”
intended to provide injured workers’ with the expedited delivery
of workers’ compensation benefits? Or are we going to need a bigger boat?
Florida employers are facing a $1.5 billion rate increase in workers’
compensation premiums in the aftermath of the well known 2016 Florida
Supreme Court decisions of Castellanos v. Next Door Company; Westphal
v. City of St. Petersburg; and Miles v. City of Edgewater Police Department.
Before 2013, Florida was known as one of most expensive states in the
U.S. for purchasing workers’ compensation coverage. If the system
returns to the ways of the past, the cost of coverage will no doubt continue
to increase. What will be the practical effect of claimant paid fees under
Miles in combination with Castellanos and what will be the effect of settlements
as a whole on the industry?
At the present time it would seem that most of the injured workers’
attorneys are under the belief that Miles applies to every case across
the board regardless of facts, and are now ensuring they enter into a
retainer agreement with every new client for 25% of fees on settlements,
thus in excess of the statutory guidelines but within the Florida Bar
Guidelines and factors set forth in Lee Engineering. (The 1st DCA in Miles
held that any fee agreement must nonetheless, like all fees for Florida
attorneys, comport with the Lee Engineering factors and as codified in
Rule 4-1.5(b), of the rules regulating the Florida Bar).
As per the statutory language of 440.34(1), Fla. Stat., a “fee…
may not be paid unless approved the judge of compensation claims”
and thus this provision imposes a duty on the JCC to review fees paid
on behalf of or by a claimant. Thus, there is statutory authority given
to the JCC’s to ensure retainer agreements are in compliance with
the law. Arguably, the retainer agreement alone should not automatically
require a JCC to find that a fee is reasonable. Counsel should be prepared
to present sufficient credible evidence which is in accordance with the
Florida Bar rules and Lee Engineering factors.
At the present time, however, there does not seem to be any clear consensus
as to whether the JCCs are under an obligation to review and approve fees
based on the statute and Miles and the appropriate procedures in connection
with same. Another issue to consider is the impact Miles fees could have
on cases involving fee liens from prior multiple attorneys who also have
25% retainer agreements.
In the meantime, it is reasonable to conclude that settlements, on the
whole, will require larger sums, in order to provide injured workers with
enough net cash in their pockets, and could result in claims lingering
around for longer than necessary…..
In sum, at this point it still seems too early to determine the impact
the court’s decisions will have on Florida’s business climate
and what are some alternative possible solutions to most appropriately
address the need for a self-executing workers’ compensation system,
i.e. one that provides injured workers with a quick and efficient delivery
of benefits as well as provide for “reasonable” attorneys’
fees in appropriate factual situations (i.e. when claimant’s attorneys
appropriately secure benefits i.e. properly “earned” by counsel),
without the potential for abuses from within the pool of fee hungry sharks….