Judge erred in awarding attorney's fees based on customary hourly rate

Because the presumptive attorney's fee authorized by Florida law is a contingent fee based on the value of the benefits obtained, judges of compensation claims should not place undue reliance on the customary hourly rate when departing from the statutory formula.

Case name: Smith v. Gulf Coast Hospital, et al., No. 1D09-5161 (Fla. Ct. App. 03/31/10).

Ruling: The Florida District Court of Appeal reversed a judge of compensation claims' decision awarding the claimant attorney's fees based on the customary hourly rate in the area rather than the fee schedule set forth in Fla. Stat. Section 440.34(1)(1999). It returned the case, directing the JCC to apply the statutory fee schedule.

Sub-subcontractor's employee not entitled to coverage from contractor (02/25/13)
NFL seeks to seal the deal against players filing in California (04/19/12)
Company's failure to pay premium results in liability for worker's injury (12/19/11)
Longshoreman's removal from work list doesn't establish pretext (04/16/12)
Medicaid's payment, write-off erase employer's liability to worker (03/12/12)

What it means: Because the presumptive attorney's fee authorized by Florida law is a contingent fee based on the value of the benefits obtained, judges of compensation claims should not place undue reliance on the customary hourly rate when departing from the statutory formula.

Summary: The JCC awarded the claimant attorney's fees based on the customary hourly rate charged in the area rather than according to the fee schedule set forth in Fla. Stat. Section 440.34(1)(1999). In determining the amount of the award, the JCC found that following the statutory schedule would produce a fee of $35,367.55, or approximately $643 per hour. Because such a fee would result in an hourly rate higher than what is typically awarded in the area, the JCC determined that the presumptive statutory fee was inappropriate. Instead, she awarded $200 per hour for 35 hours, or $7,000. Concluding that the JCC abused her discretion in using the customary hourly rate in the area rather than applying the fee schedule, the DCA reversed and returned the case with directions to apply the schedule to the award.

The court relied on its previous decision in Alderman v. Florida Plastering, in which the JCC also awarded a fee substantially lower than the presumptive fee established by applying the statutory fee schedule. The Alderman court reversed the JCC, reasoning that because the presumptive attorney's fee authorized by statute is a contingent fee based on the value of the benefits obtained, the JCC placed undue reliance on the customary hourly rate in departing from the statutory formula. Furthermore, the Alderman court stated that although a JCC may properly consider the fee customarily charged in the locality for similar legal work, "it is unlikely that this factor could provide the sole basis for a departure, particularly if the customary fee is based on an hourly rate."

Read more at the WORKERSCOMP Forum^TM homepage.

June 24, 2010

Newsletter Sign-up