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FLORIDA’S WORKERS COMPENSATION ATTORNEY’S FEE STATUTE UPHELD

Septembe 5, 2006

Recently, the Florida Supreme Court rejected the request of a review from the First District Court of Appeal with regard to claimants attorney fee’s in workers’ compensation cases.  Below is a synopsis of the courts decision.
This is another significant victory from our General Counsel firm – Stiles, Taylor & Grace!  Despite an amicus brief filed by the Academy of Florida Trial Lawyers, employers won a very important decision that will have a lasting impact on the legislation passed in 2003 which reformed our workers’ compensation system in Florida.  AIF and our General Counsel law firm will continue to be vigilant in order to secure our legislative priorities.

On August 21, 2006, the Florida Supreme Court rejected a request that it review the First District Court of Appeal ruling in Lundy v. Four Seasons Ocean Grand Palm Beach, 31 FLW D1663 (Fla. 1st DCA June 20, 2006).  The First District Court of Appeal had referred its ruling to the Florida Supreme Court as a question of great public importance. 

“This is a major victory for employers and carriers in the State of Florida,” according to Mary Ann Stiles.  “It was always our belief that the Legislature’s decision to directly relate claimant’s attorneys’ fee to the benefits obtained was constitutional and brought Florida into line with most other states.”

The First District Court of Appeal in Lundy v. Four Seasons held the legislative changes to Section 440.34 Florida Statutes clearly defined a specific percentage fee to the benefits achieved as “reasonable” and the attorney fee provisions were constitutional.  The case involved two very basic issues:

(1)                  Should the statute be interpreted to allow a workers compensation judge (JCC) to award an attorney’s fee that exceeds the mandated percentage of benefit secured?

(2)                  Do the statutory provisions violate the separation of powers doctrine, the due process clause, the equal protection clause, the right to counsel, and the right to freely contract as provided in the Florida Constitution?

The First District addressed the first issue by reaffirming its decision in Wood v. Fla. Rock Industries 929 So. 2d 542, (Fla.1st DCA 2006) in which it held the statute defined what is a ‘reasonable fee’ by setting forth the formula for determining the amount of fees to be paid.

As to the constitutional issues, the First District held the claimant had not met her burden in that “statute is presumed to be valid; and every presumption is to be indulged in favor of the validity of that statute.”  The court held that the “legislature did not encroach upon the powers of the judiciary” as “workers’ compensation is a creature of statute. . .” and, the “legislature may limit the amount of fees . . . because the state has a legitimate interest in regulating attorney’s fees in workers’ compensation cases.”  Finally that the legislature “is charged with setting forth the criteria it deems will further the purpose of workers’ compensation law and will result in a reasonable fee.”

The equal protection or the due process clauses were not violated and therefore after discussion, the court ruled the statute “does not deny a claimant equal protection, due process, or the right to be represented by counsel.”

The court also held that the statute “does not offend the right to freely contract.”  In that “the worker is able to retain a substantial portion of the awarded benefits so as to prevent the burden of support for that worker being cast upon society.” This at least is a recognition that the attorney fee statute being challenged does not relate just to fees paid by the employer/carrier but also when fees are paid by the claimant.

Finally, regarding the issue of whether section 440.34(1) denied claimants access to courts, the panel of judges that considered the case noted that the statute had not been shown to deny access.”  In this case, the claimant had counsel before the JCC and before the appellate court.  Therefore, the claimant could not have prevailed on an argument that she was unable to retain counsel. 

Lundy was a closely watched and heavily litigated challenge because it challenged the statute upon both the statute’s provisions and the alleged constitutional deficiencies of limiting attorney’s fee to a percentage of the benefits obtained for the claimant.  In addition to the briefs filed by the parties, amicus curiae briefs were filed by the Academy of Florida Trial Lawyers challenging the statute and amicus curiae briefs were filed by Associated Industries of Florida, Inc., and the Florida Insurance Council supporting the statute’s validity,” said Rayford Taylor.

This challenge arose following the adoption in 2003 of various statutory reforms to Florida’s Workers Compensation Act, one of which dealt with the method by which a claimant’s counsel calculates the attorney’s fee from the claimant or the employer/carrier.  The reforms were lead by an employer and insurer coalition for which Mary Ann Stiles was the principal and lead lobbyist.

Once various statutory and constitutional challenges were filed to the attorney’s fee provision, Rayford H. Taylor and Mary Ann Stiles have been counsel of record in at least four separate appellate cases.  Stiles, Taylor & Grace will continue to defend the statute’s validity and its operation.

For more information about the Lundy decision or other cases challenging the attorney fee reform, please feel free to contact Mary Ann Stiles at mastiles@stileslawfirm.com or (813) 251-2880, or Rayford H. Taylor at rtaylor@stileslawfirm.com or (404) 287-2390.