Florida has returned to the era of ER/C paid claimant attorney’s fees & costs. In one word, the reason for the increase in defense litigation expense is – Castellanos! With this Florida Supreme Court 2016 decision – which finds 440.34 as amended in 2003 unconstitutional – we are not only seeing an uptick in the filing of petitions but also an extreme increase in the volume of litigation per file. Gone is the post-2003 handling of files, which progressed without the need for adjuster and employer representative depositions but we are now back to the pre-2003 wrangling over the admissibility of all evidence and Claimant attorney demands for depositions to secure the admissibility of payment ledgers and payroll records. Some Claimant attorneys will no longer proceed with litigation relying on the ER/C’s production of payroll records, personnel file materials, payment ledgers, etc. Instead, many Claimant attorneys now insist on multiple depositions – both the employer and the adjuster – as well as authorized physicians. In addition, Claimant attorneys are now more willing to fund the expense of a Claimant IME -to pursue benefits even after the Claimant has been released at MMI by the one-time change of physician – because with a conflict between the authorized physician and the claimant’s IME – a Court appointed EMA (an expert medical advisor) is assigned as a binding tiebreaker. This is now a gamble Claimant attorneys are willing to take – post Castellanos, because if the EMA agrees with the Claimant’s position, the Claimant attorney is awarded an hourly attorney’s fee – payable by the ER/C. This is the same reason why some Claimant attorneys want to take any and all depositions they can (adjuster, employer and even authorized doctors – rather than just stipulating their records into evidence) – to secure an hourly attorney’s fee.
It has been over 15 years since Claimant attorneys were able to pursue this “gravy train” and now – in 2017 – the gravy train is a “bullet train”! Gone are the days of a quick settlement, even if all evidence is favorable to the ER/C’s position. We are now seeing some Claimant attorneys willing to litigate a claim and attend as many depositions as they can to bolster the number of hours they spend on the file in the hopes of securing a win. Claimant attorneys are willing to fund a total denial case and “roll the dice” at final hearing because if they win, they win big. Taking a case to final hearing, depending on the complexity of the case, on average necessitates many hours of work. Now, with recent JCC decisions the hourly rate payable to a Claimant attorney is notably increased from an average of $250 per hour upwards to $300 per hour. This makes litigation very lucrative for Claimant attorneys. This is why some Claimant Attorneys file a petition “every day” – just to see if they can trip up the ER/C to make one tiny mistake so they can secure a fee. Even in cases where there appear to be no outstanding issues – an indemnity Petition with a payment ledger confirming all TPD due paid – sometimes litigation will continue in hopes that one check was issued late.
Keep in mind, that even with a final hearing order approving the ER/C’s position the claimant still has the right to appeal the decision / Order and, in cases where the claimant is “poor” (indigent) the claimant incurs no cost/expense in filing an appeal or for preparation of the record on appeal. Again, there is no out-of-pocket for the Claimant or the Claimant attorney to continue on with the litigation. Instead, the Claimant attorney hopes to reach the “holy grail” again – a1st DCA Order overruling the JCC’s Order. If this occurs, not only has the ER/C expended costs and defense fees in defending the appeal but now the ER/C is ordered to pay the Claimant attorney an appellate attorney fee plus attorney’s fees and costs for securing the underlying benefits at the JCC level.
In sum, gone are the 15 + years of the award of statutory attorney fees, compensating Claimant attorneys based on the value of the benefits they secured, and back is the era of contentious – and sometimes unnecessary litigation – to bolster hours and the potential fee award. Keep in mind that this back fee award (payable by the ER/C) is on top of any statutory fee still payable to the Claimant attorney out of any lump sum settlement of the claim. In the aftermath of the Castellano’s decision we will likely see an increase in premium rates. This is likely to be addressed by the Florida Legislature. House Bill addressed by the Florida Legislature. House Bill number 7085 proposed capping a Claimant attorney hourly fee to $150 per hour. This would be a big relief for employers; however, the bill died in the house on 5/5/17. Senate Bill 1582 proposes a cap on Claimant hourly fees at $250 per hour. Although this Bill was tabled in 2017 – it is scheduled to be re-addressed when the Legislative Session reopens in January 2018. We all will have to watch with anticipation as to any measures addressed by the Legislature to curtail the increase in Employer’s litigation expense.