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….