During the 2003 reform debates, employer/carriers pushed to all but eliminate hourly fees on the basis it would reduce overall costs and speed the delivery of benefits to injured workers. For their part, claimant attorneys argued the changes were too restrictive and would penalize injured workers, especially in cases where the dollar amount of the benefits would preclude attorneys from taking their cases. Also, the attorneys said that by not imposing a similar statutory fee cap on defense attorneys, it created an unfair playing field where employer/carriers could force injured workers to settle for smaller settlements.

In a major victory for employer/carriers, lawmakers approved a statutory provision that specifically eliminated the ability of judges to award hourly fees except in the case of one medical-only fee per claim. In those cases, the hourly fee was capped at $150 for a maximum amount of $1,500. In eliminating all other hourly fees, legislators specifically stated that fees should be calculated on a percentage basis. The provision stated that claimant attorneys could receive 20 percent of the first $5,000 of benefits, 15 percent of the second $5,000 of benefits, and 10 percent for any claimant benefits secured in the following 10 years. If any benefits were secured past that point, the attorney would receive five percent.

As a means to further ensure that the fee provisions were followed, lawmakers also put into place several provisions designed to prohibit judges of compensation claims from approving fees higher than what is spelled out in the law. As noted in Chapter 440.34(1), Florida Statutes, “The judge of compensation claims shall not approve a compensation order, a joint stipulation for lump-sum settlement, a stipulation or agreement between a claimant and his or her attorney, or any other agreement related to benefits under this chapter that provides for an attorney's fee in excess of the amount permitted by this section.”

NCCI Findings

NCCI stated that the elimination of hourly fees in favor of the percentage fee schedule has had a favorable impact on claimant attorneys' fees. In accident-year 2004, the average fees for all claims with attorney involvement decreased roughly 30 percent when compared to the fees paid in accident-year 2003. It should be remembered that the majority of the 2003 reforms didn't take effect until October of that year, with other provisions only taking effect on January 1, 2004. In accident-year 2004, the average attorneys' fees were about 20 percent lower when compared to accident years 2000 and 2002.

The change in attorneys' fees has also had some effect on settlements. NCCI reports that the state's average cost for lump-sum permanent partial disability indemnity settlements involving claimant attorneys declined by four percent between accident years 2001 and 2003. That downward trend has continued with the decline increasing to six percent after the enactment of the reforms. The same trends can be seen in the average lump-sum settlements for medical benefits. The average cost of such claims with attorney involvement is roughly 10 percent higher than the average cost of the claims that don't involve attorneys. By comparison, between accident-years 2000 and 2002, the deferential in settlements ranged between 23 percent and 52 percent when attorneys were involved in the case. All told, the average cost per claim with attorney involvement is 47 percent higher than cases that don't involving attorneys. While this may seem high, it brings the state in line with the countrywide average of 44 percent.

While the cost of claimant attorneys' fees are trending downward, the percentage of claims with attorney involvement has remained steady, which partially refutes the claim that the law changes would reduce injured workers' access to legal representation. In accident-year 2004, claimant attorneys were involved in 20.2 percent of indemnity claims, a figure that roughly mirrored the 20.1 percent in accident-year 2003. However, NCCI did note that the number of new claims continues to trend downward, a pattern that began before the 2003 law changes. The council noted that this might be due less to the changes in attorneys' fees and more attributable to other factors such as the change in lost-time claims. Between accident-years 2001 and 2005, the state's lost-time claim frequency declined on average of 5.3 percent. That trend increased to 8.1 percent between 2003 and 2004, and 9.2 percent between 2004 and 2005. It should be noted that the decline in lost-time claims is a national phenomenon, which has developed throughout the 1990s and 2000s.