Florida Supreme Court Overturns Workers’ Comp Attorney Fee Limits

October 24, 2008

  • October 24, 2008 at 8:41 am
    Homer says:
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    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.

  • October 24, 2008 at 2:23 am
    Drew P says:
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    Well, it figures. Leave it to litigation attorney’s to know how to pleade their case to the Florida Supreme court. I know for a fact that insurers are petitioning against the recent rate filings and to increase the Workers Compensation rates in Florida for 2009. If you sell insurance you have one thing to look forward to: increased rates and increased premiums. That is, if you can look past companies going out of business because they can’t afford their insurance costs.

    Could you imagine how many Florida Businesses would be out of business if this ruling past 1 year ago? No doubt, many will be having a turn for the worst next year and an increase in Workers Compensation rates will not help.

    Florida just took a turn for the worst.

  • October 26, 2008 at 8:14 am
    Bill says:
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    60% rate reduction in the last 4 years and the housing industry down. I think this should help out agents in the long term with higher rates and commissions. If your a Florida agent and your premiums are down only 20%, your winning now.

  • October 26, 2008 at 8:22 am
    Chuck says:
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    Carriers will not go out of business, as was mentioned before NCCI establishes the rates based on loss averages. It took me years to figure out that businesses will not go out of business as well. Contractors usually or should bid the job with the rates for Workers comp included then add their profit margin on top of the job cost, (cost plus 10% or 15%) So actualy their profit should go up if their job cost are increased and so will agents income. This will tighten the market though and the days of the huge dividends will be over soon.

  • October 27, 2008 at 8:08 am
    TAR says:
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    Bill, this issue is not about agent’s commissions! This issue is about the cost of doing business for small business owners. As small businessowner’s we are also consumers and there is no doubt that the reductions in work comp rates these past four years have helped.
    The fact is the law did exactly what it was designed to do, cap excessive fees a component in helping to reduce Florida’s high work comp rates. If agents are only worried about reduction in our commissions, then go into another business. Commissions will be earned as we write business, so work comp is lower, at least the consumer is getting a break, especially with all the other costs of doing business escalating out of control. It’s about time work comp got under control. But these liberal courts and justices, who are also attorney’s by trade see things another way and it stinks! A very poor decision by the courts and now they will throw work comp back into a tailspin. Seems that Greed wins again!

  • October 27, 2008 at 8:36 am
    Boca Condo King says:
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    A reply to Chuck who thinks that contractors will simply add any increase in comp back into the prices they charge.

    NOT LIKELY, what is likely is more contractors will simply forgo any comp coverage and use one of the many ruses to avoid it. Plus if you look at Caballo Vs Fast Track Roofing, it may pay to just pay in cash.

    Rules are fine, so long as you can get everyone to play by them.

  • October 27, 2008 at 8:36 am
    Super Genius says:
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    TAR, Take it easy on poor Bill. I’m sure he’s just another dumb ‘ole agent who’s only interest is in himself and his myopic view of the world. He’s not accountable to anything or anyone but himself. All he wants is his regular commision check…wherever it comes from. Please don’t make things complicated for him!



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