October 27, 2008

Attorney Fees in Florida: What is "Reasonable"?

Emma Murray was a certified nursing assistant for Mariner Health Care in Florida. While helping to lift a patient, she suffered a uterine prolapse, which required a hysterectomy. She filed for workers comp, but her claim was denied because the carrier determined that the condition was not work related. Murray appealed. Based upon a favorable independent medical exam, she prevailed. The court awarded her $3,244.21. That's chump change for the comp system, but Murray's award is not the issue. The case before the Florida Supreme Court involved the fee owed to Murray's attorney.

Under the most recent reforms to the Florida comp statute, attorneys are supposed to be paid according to the following schedule:
20 percent of the first $5,000
15 percent of the next $5,000
10 percent of the amount above $10,000

You can see where this is going: based upon Murray's rinky-dink award of $3,244.41, her attorney collects $649. The attorney put in 80 hours, so the hourly rate for the effort is $8.11 - in the same order of magnitude as "would you like fries with that burger?"

The Florida Supremes found some ambiguity in the statute, as there is language awarding "reasonable" fees outside of any specific formula. The court noted that defense attorneys billed for $16,000. If you multiply the 80 hours of work performed by Murray's attorney with the usual and customary fee of $200 per hour, the resulting fee would be about $16,000.

Bottom line: the court ordered the carrier to pay Murray's attorney $16,000 for securing a $3,244 settlement for her client. Naturally, business and insurance people are outraged by the court's ruling and fearful of its implications for the future. Claimaint attorneys, by constrast, have raised their glasses in a toast to the black robed justices.

A World of Gray
Is the ruling bad for workers comp? Will attorney fees drive rates back up? Strict adherence to the above fee standard would have two potentially negative consequences: attorneys would walk away from small cases (bad for claimants) and they would hold out for the largest possible settlements (thereby enhancing their fees). Of course, there is a distinct possibility that some attorneys will aggressively pursue "nuisance" claims, in the sure knowledge that it won't benefit their clients very much, but they will make out like bandits. (I know, analogy in poor taste...)

When it comes to defining "reasonable," reasonable folks will disagree. It's always been that way and always will be. Workers comp is supposed to be no fault and friction free. In the best of all possible worlds, attorneys would not even be needed. But in case you haven't noticed, we are not yet living in the best of all possible worlds.

| 2 Comments

2 Comments

Jon:

"but they will make out like bandits. (I know, analogy in poor taste...)"

I don't think your comments are in bad taste. On the contrary I think they are very restrained and polite considering the scum sucking low life you're discussing.

Charles

The WC system was set up to benefit injured workers. If carriers wrongfully reject a claim, workers should be able to hire an attorney to get what they are owed.

Apparently, it was OK for the carrier to spend $16,000 fighing a claim it should have paid, but the injured worker should be forced to use a cut rate attorney.

If the carriers would spend the time to get the compensibility decision correct, they wouldn't have to pay either sets of lawyers.

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About this Entry

This page contains a single entry by Jon Coppelman published on October 27, 2008 11:42 AM.

Down the Rabbit Hole: The Economic Crisis and Workers Comp was the previous entry in this blog.

Disability Insurer Oversight: Just Ducky? is the next entry in this blog.

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