Proposed Workers'
Compensation Reform Act of 2001
LITIGATION
ATTORNEYS’ FEES
Current Situation
The law now allows a claimant’s attorney to charge
hourly rates, which results in inequitable outcomes for the injured
worker because the attorney has no incentive to pursue quick resolution
of a claim through settlement. By keeping the claim open as long as
possible, the attorney can build up his hours, bringing him a larger
fee.
Recommendation
This legislative proposal eliminates the ability of
claimants’ attorneys to charge hourly rates. It also returns the law
to its original intent, which was to have claimants pay 100 percent of
their attorneys’ fees. The First District Court of Appeal effectively
eliminated this provision through case law. The legislation also limits
appellate hourly rates to $125 an hour up to a maximum of $5,000, with
appeals to be heard before a newly created Workers’ Compensation
Appeals Commission.
REDUCING LITIGATION
Current Situation
The calculation of an injured employee’s average
weekly wage, which is used to calculate his compensation rate, has
become a matter of substantial litigation because the parties can never
agree on the meaning of the term "average weekly wage."
Another source for substantial litigation involves medical issues of
under $5,000.
Recommendation
The legislation would help eliminate the costs of
this unnecessary litigation. Judges of compensation claims would be
required to review pay records submitted by the employee and the
employer/carrier and then determine the correct average weekly wage
without the involvement of attorneys.
Judges would hear disputes over medical issues that
involve payment of $5,000 or less without attorney involvement.
COMBINING THE REQUEST FOR ASSISTANCE
AND THE PETITION FOR BENEFITS
Current Situation
When an injured employee believes he is eligible for
benefits he is not receiving, he must file a request for assistance with
the state Employee Assistance Office. The insurance carrier has 30 days
to resolve the issue in question, after which time it incurs
responsibility for the claimant’s attorney’s fees. After the 30
days, if the matter is not settled to the employee’s satisfaction, he
may file a petition for benefits. The law, however, does not require
that the insurance carrier receive a copy of the request for assistance.
Often, the 30 days will pass before the carrier finds out that there is
an issue in question, thus the carrier does not have the ability to work
toward resolution of the problem until the situation reaches the point
where the carrier may become liable for payment of attorney’s fees.
Recommendation
This legislation combines the petition for benefits and the request
for assistance into one document and requires that the carrier receive a
copy of it when it is filed, giving the carrier 30 days to resolve any
problems before the litigation process begins. This should help reduce
attorney involvement and costs. The legislation also changes the name of
the "Notice of Denial" form, the document by which the carrier
responds to the petition for benefits, to "Response to
Petition."
PARTIAL DISMISSAL OF A PETITION
Current Situation
In many cases, claimants’ attorneys currently file
numerous petitions for benefits for the same injury before any of the
petitions are resolved. They argue that they must do so because filing
all of the petitions in one document may result in the dismissal of all
claims if just one issue is not ripe. They must then start the process
all over again, which delays the delivery of benefits to the injured
workers. The practical result of this is that the number of hours billed
by attorneys for the claimant and the carrier are unnecessarily boosted,
as much of the work done is duplicative.
Recommendation
This legislation would allow for partial dismissal of a petition, so
that all the issues that are ripe can be addressed at that time.
ELIMINATE ALLEN V. TYRONE SQUARE 6 AMC THEATERS
Current Situation
The statutes provide that attorneys’ fees do not
attach until 30 days after the filing of a request for assistance and 14
days a petition for benefits has been filed. The First District,
however, created an exception to this provision in its ruling in Allen
v. Tyrone Square 6 AMC Theaters. In this case, the appeals court
held that the request for assistance and a petition for benefits need
not be filed for attorney’s fees to attach if the issue in question
involves medical benefits only. In this case, what constitutes notice to
the carrier is subjective. Case law also has not clarified what
constitutes a reasonable time to respond to one of these subjective
"requests" prior to incurring attorneys’ fees.
Recommendation
This legislation would eliminate this exception
imposed by the appeals court.
