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If Workers’ Compensations Insurance Companies Had Their Way . . . .

As we’ve noted before, workers’ compensation insurance companies – not employers – almost invariably exercise total control over the claims of injured workers. These companies DO NOT have the best interests of injured employees at heart. (Indeed, the companies don’t even have a heart!) In their endless quest for higher profits the companies continue to do their best to unbalance the “grand bargain” that employees and employers reached via the workers’ compensation system.

The common law is the body of law that has arisen through the centuries from decisions of judges. The common law began in medieval England. In those times it was rare for Parliament to meet, and when it did it passed few laws. The king’s judges nevertheless had to decide cases presenting the myriad issues that arise when humans interact with each other. Through their decisions the common law was born.

The common law has different categories. The category called “torts” is the source of law that allows someone (the “plaintiff”) injured by the act of another (the “tortfeasor”) to sue for damages. To prevail, the plaintiff must show that the tortfeasor was negligent.

Legal actions based on tort law are common today. Just think of lawsuits arising from vehicle accidents or medical malpractice claims. A common feature of tort actions is the plaintiff’s representation by a lawyer who is acting on a “contingency basis.” That is, the lawyer’s fee is contingent on winning.

Workers’ compensation is not part of the common law. It is purely a “creature of statute.” There are no plaintiffs or tortfeasors in workers’ compensation. Instead of plaintiffs there are injured workers who have given up the right to sue in exchange for coverage of their medical costs and continued receipt of a portion of their lost wages. Instead of tortfeasors there are employers who do not have to fear large damage awards due to findings of negligent conduct.

Every state legislature has passed its own version of workers’ compensation, and the terms of the “grand bargain” between employees and employers vary from state to state. It is a truism that the law in general is complex. Workers’ compensation law is no exception, and workers’ compensation claimants often need legal counsel (whether they seek it or not). It is common for workers’ compensation acts to include a provision for payment to a lawyer who represents a prevailing claimant. Some states require employers to pay the fee of a prevailing claimant’s lawyer. Others direct the payment from the accrued benefits due the claimant.

It’s fair to say that workers’ compensation insurance companies don’t like it when workers’ compensation claimants have legal counsel. Such claimants are much more likely to prevail. The companies’ solution, at least in Florida, was to gain the passage by the “pro-business” legislature of a law that eviscerated payments to lawyers for claimants.

Florida is one of those states that requires employers to pay the fees of a lawyer for a prevailing workers’ compensation claimant. A news report (link below) describes how the change in the law upset the grand bargain that Florida employees had reached with their employers:

“[A] Miami man, Marvin Castellanos, . . . suffered head, neck and shoulder injuries while working for Next Door Co., a maker of doors and door frames in Miami.

“The company waged an aggressive defense, but Castellanos won and received benefits of $822.70.

“His lawyer, who worked on the case for 107 hours, sought a fee of $36,817.50.

“He received a fee of $164.54, the equivalent of $1.53 per hour under a fee system the Legislature approved in 2009.

“Under that law, attorneys who successfully represent injured workers are paid 20 percent of the first $5,000 in benefits obtained and 15 percent of the next $5,000 in benefits.”

After long years of litigation, the Supreme Court of Florida has now decided that the change in the law violates the constitutions of both Florida and the United States:

“Writing for the majority, Justice Barbara Pariente said the law violates workers’ due process rights under the state and U.S. Constitution because it prevents challenges to the ‘reasonableness’ of legal fees in workers’ compensation cases.

” ‘Without the likelihood of an adequate attorney’s fee award, there is little disincentive for a carrier to deny benefits or to raise multiple defenses, as was done here,’ Pariente wrote. ‘Virtually since its inception, the right of a claimant to obtain a reasonable prevailing party attorney’s fee has been central to the workers’ compensation law.’ ”

“By replacing the former ‘reasonable’ standard with a sliding scale of legal fees, Pariente said, ‘the Legislature has thus eliminated any consideration of reasonableness.’ ”

When it comes to the ongoing assault against workers’ compensation, the decision of Florida’s high court is ray of sunshine in an otherwise gloomy sky for workers’ compensation claimants. Let’s hope that such happy results are more common in the future.

Our enduring advice is that an employee injured at work should always seek legal counsel – and fast!

HammondTownsend is here to serve you.

Here is the link to the article mentioned above:


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