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In the long-awaited opinion in Castellanos v. Next Door Co. (Fla. Apr. 28, 2016),EDWARDS-SMALL_002511 the Florida Supreme Court held in a 5-2 decision that Florida’s Worker’s Compensation Statutes, which set a mandatory fee schedule for claimants’ attorneys, are facially unconstitutional.

Most recently amended in 2009, Florida’s Worker’s Compensation statutes mandate a sliding scale for fee awards to a claimant’s attorney: 20% of the first $5,000 of benefits secured, 15% of the next $5,000 of benefits secured, 10% of the remaining amount of benefits secured within 10 years of the claim, and 5% of benefits secured after 10 years. The statute forbade, under penalty of criminal prosecution, a claimant’s lawyer from receiving any compensation for his or her services other than that awarded under the mandatory sliding scale.

The 2009 amendments replaced long-standing statutory language allowing a Judge of Compensation Claims (JCC) to award a “reasonable fee” to a prevailing claimant. Thus, in the Castellanos case, although the claim was complex and vigorously opposed by the employer and its insurance carrier, the amount of benefits secured was only $822.70. The claimant’s attorney was awarded a fee of only $164.54 under the mandatory fee scale, despite reasonably spending 107.2 hours on the defense of the case. The claimant attorney’s fee award was a mere $1.53 per hour worked. The JCC and the First District Court of Appeal both expressed concern about the inadequacy of the fee award, but were bound by precedent to uphold the award.

In declaring the mandatory fee scale unconstitutional, the Florida Supreme Court began its analysis by noting the historical purpose of the worker’s compensation system to provide “simple, expedious” relief to the injured worker in exchange for surrendering the right to bring tort lawsuits for workplace injuries. However, the supreme court has found that in the eighty years since the first worker’s compensation statutes, worker’s compensation laws have become so complex that it is nearly impossible for a claimant to successfully litigate a claim without attorney assistance.

Although the method for calculating fees has changed frequently as the statutes were amended over the years, Florida’s worker’s compensation laws had long allowed the award of reasonable attorneys fees to successful claimants. The 2009 amendments to the worker’s compensation statutes eliminated language allowing a claimant to recover a reasonable fee, thus only allowing fee awards as mandated by the statutory sliding scale.

The Florida Supreme Court held that removing the ability to award a claimant a reasonable attorney’s fee violated the due process requirements of the Florida and United States constitutions. The statute prevents courts from altering a claimant’s fee award, even if there is a finding that the attorney’s fee award is either grossly inadequate or grossly excessive. Thus, the supreme court reasoned, the statute improperly created a conclusive and irrebuttable presumption that attorney’s fees awarded under the statute were reasonable, regardless of the facts of an individual case.

The legislature’s concern about excessive attorney’s fee awards was held to not be a reasonable basis to justify the mandatory fee scale. Rather, the supreme court held that Rule Regulating the Florida Bar 4-1.5(b)(1)(A) provided adequate protection against excessive attorney’s fees. Furthermore, the mandatory fee scale did not protect against excessive fees, because excessive fees could easily result in cases with large recovery amounts. Finally, the fee scale did not provide any penalty to the employer or insurance carrier for wrongfully delaying or denying benefits to injured workers.

Because the supreme court declared the attorney fee provisions in the 2009 amendments to the worker’s compensation statutes unconstitutional, the supreme court revived the previous version of the statute. Thus, although the statutory fee schedule remains the starting point for awarding a claimant’s fee award, a claimant may now present evidence that the application of the fee schedule will result in an unreasonable award. Therefore, a claimant can be awarded fees that deviate from the scale only if the claimant can first prove that the scale results in an unreasonable fee.

Scott J. Edwards is an appellate and civil litigation attorney in Boca Raton, Florida, with a practice focused on personal injury, commercial litigation, technology law, and insurance law.  He can be reached at scott@scottjedwards.com or 561-609-0760.  Click here to learn more about Scott Edwards’ appellate law services.

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