Florida: Insurance group urging lawmakers to address reinstated attorney's fees

An insurance group is hoping Florida lawmakers address the potential impact of a controversial state Supreme Court decision during the Legislature's annual 60-day session.

Last October, in Murray v. Mariner Health Inc., the Florida Supreme Court eliminated the statutory caps on attorney's fees that were imposed under the 2003 legislative workers' compensation reforms and provided for a return to the "reasonable fee" standard for attorneys handling claims. Insurance Commissioner Kevin McCarty predicted that the ruling would stall the recent pattern of rate decreases in the state and announced that Florida employers would see an average increase of 6.4 percent in their comp rates in April. The rate hike was slightly lower than the 8.9 percent rate increase recommended by the National Council on Compensation Insurance, which also indicated that the ruling would have a significant impact on workers' comp costs.

William Stander, assistant vice president and regional manager for the Property Casualty Insurers Association of America, said the decision overturned the positive reforms delivered in S. 50A by reinstating hourly attorney's fees, which he said are considered to be the biggest cost drivers in the workers' comp system.

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"Unless addressed this year, the reintroduction of hourly attorney's fees into the workers' compensation system will increase litigation and raise costs," he said. "Especially in these difficult times, Florida's employers can't afford higher rates."

Stander said the organization will continue to work with the Workers' Compensation Coalition for Business & Insurance Industry, a collective of employers and business groups in the state, to urge the Florida Legislature to once again prohibit hourly attorney's fees. In addition, some lawmakers have crafted proposals to address the issue, including:

H.R. 903. Sponsored by Rep. Anitere Flores, R-Miami, the bill would revise the amount of attorney's fees that may be paid and clarify amounts claimants are eligible to recover from a carrier or employer. Attorney's fees would be subject to approval of a workers' comp claims judge or court in accordance with statutory guidelines. The proposed legislation is expected to be addressed soon by the Insurance, Business & Financial Affairs Policy Committee.

S. 2072. A companion bill was introduced in the Senate by Sen. Garrett Richter, R-Naples. Richter's proposal would clarify requirements for the payment of attorney's fees and costs under a retainer agreement and specify the amount of attorney's fees which a claimant is entitled to recover from a carrier or employer. The bill has been referred to the Senate Banking and Insurance Committee.

March 23, 2009

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