Rising Attorney Fees Could Lead to Workers’ Comp Reform This Legislative Session

 

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In what could be an indication that workers’ comp reform is on the horizon this session, the House Insurance and Banking Subcommittee yesterday focused on the status of the workers’ comp system and attorney fees.

Office of Judges of Compensation Claims Deputy Chief Judge David Langham presented to the committee that, while the number of new cases and petitions for benefits have remained largely unchanged since 2016, attorney fees have increased dramatically since the Florida Supreme Court’s ruling in Castellanos v. Next Door Company, which resulted in a 14.5 percent, or $1.5 billion, workers’ comp rate increase on Florida job creators.

In the first year post-Castellanos, attorney fees have risen 36 percent, an increase to $186 million – the highest in claimant attorney fees that have been paid in over a decade.

Additionally, hourly attorney fees have increased from roughly $150 an hour in 2014-2015 to over $250 in 2018-2019. Adding to the figure is $254 million paid in the defense of workers’ compensation claims.

Because of decreased frequency and severity in claims, workers’ comp rates in Florida and the majority of the country have decreased over the last two years. Despite these decreases, Florida’s workers’ comp rates are still roughly 10 percent higher than they could be because attorney fees remain uncapped. Attorney fees for trial lawyers are expected to continue to grow by 10 percent in 2019.

The 2020 rate filing will be the first filing to fully encompass post-Castellanos behavior, and it is expected that upward pressure from attorney fees will be reflected in the rate.

Next Steps

1. Interested in being a part of the solution?  Join the Florida Chamber Workers’ Compensation Task Force by contacting Carolyn Johnson at 850-521-1235 or cjohnson@flchamber.com.
2. Register for the Florida Chamber’s annual Legislative Fly-In, where business leaders will engage with elected officials and learn details about the upcoming Legislative Session.