Florida Supreme Court Overturns Workers' Comp Attorney Fee Limits
Southeast News • October 24, 2008
The Florida Supreme Court announced its final ruling in Murray v. Mariners Health/ACE USA, reinstating hourly attorneys' fees in workers compensation cases.
In response to the announcement, ...
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Subject: Florida workers compensation
Posted On: October 24, 2008, 8:41 am CDT
Posted By: Homer
Comment:
I'm sure there were a lot of happy lawyers down in Florida yesterday, both plaintiff and defense.
Say goodbye to the savings produced by the 2003 reforms. Welcome back to high hourly add-on attorney fees and increased defense costs. It took the Florida Legislature years to figure out that the main cost driver in Florida workers' compensation was these attorney fees. Florida is the only state I know of that gives plaintiff attorneys a financial incentive to create disputes. Before the reforms, it was common to see attorney fees that were higher than the actual benefit received by the injured worker. This does not happen in any other state.
The funny thing is, Florida caps carrier profits and makes them refund excess profits. The Insurance Commissioner recently rejected a NCCI recommendation and ordered a bigger rate cut. Apparently someone forgot to tell the State regulators that the courts can make the 2003 savings go away in an instant.
What happens now? Companies that had to refund excess profits can't get that money back now that their costs on the old claims are going up. All the carriers that reduced their rates because of the savings produced by the 2003 reforms can't go back and charge more premium now that those savings have been erased by the Florida Supreme Court. All those carriers will now take a big financial hit.
No one seems to care if insurance carriers lose money. They should care, because the effect of this will be felt by every business operating in Florida. They will see significantly increased rates. I suspect some carriers will end up going out of business because the premiums they have been charging for the last 5 years are now inadequate for increased losses they are going to have to pay.
Subject: Florida workers compensation
Say goodbye to the savings produced by the 2003 reforms. Welcome back to high hourly add-on attorney fees and increased defense costs. It took the Florida Legislature years to figure out that the main cost driver in Florida workers' compensation was these attorney fees. Florida is the only state I know of that gives plaintiff attorneys a financial incentive to create disputes. Before the reforms, it was common to see attorney fees that were higher than the actual benefit received by the injured worker. This does not happen in any other state.
The funny thing is, Florida caps carrier profits and makes them refund excess profits. The Insurance Commissioner recently rejected a NCCI recommendation and ordered a bigger rate cut. Apparently someone forgot to tell the State regulators that the courts can make the 2003 savings go away in an instant.
What happens now? Companies that had to refund excess profits can't get that money back now that their costs on the old claims are going up. All the carriers that reduced their rates because of the savings produced by the 2003 reforms can't go back and charge more premium now that those savings have been erased by the Florida Supreme Court. All those carriers will now take a big financial hit.
No one seems to care if insurance carriers lose money. They should care, because the effect of this will be felt by every business operating in Florida. They will see significantly increased rates. I suspect some carriers will end up going out of business because the premiums they have been charging for the last 5 years are now inadequate for increased losses they are going to have to pay.