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Attorney fee ruling in workers comp case raises questions

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In the wake of a Florida appellate court ruling, workers compensation professionals in the state are pondering how to fairly compensate attorneys without inviting additional litigation and increasing claim costs.

Florida's 1st District Court of Appeal in Tallahassee ruled last week in Martha Miles v. City of Edgewater Police Department et al. that the state's workers comp law violates injured workers' “rights to free speech, free association and petition.”

The case argues “it's fundamentally unfair to have one party or one side to the litigation able to contract with their attorneys for a mutually agreeable fee – that's what we do with our clients – while telling the other side, 'You cannot do that. Your fee is limited to this strict guideline,' ” said Steve Coonrod, a partner at McConnaughhay, Coonrod, Pope, Weaver, Stern & Thomas P.A. in Tallahassee, Florida.

Meanwhile, the Florida Supreme Court ruled Thursday in Marvin Castellanos v. Next Door Co. et al. that the state's attorney fee schedule violates due process under state and federal law. The high-profile case is one of three pending before the state Supreme Court.

“I think the Miles argument has a certain common sense appeal to it … Why can't a claimant who has the means to do so hire an attorney for a mutually agreeable amount? Why can't an otherwise competent claimant contract with their own attorney to pay higher than a guideline fee amount?,” Mr. Coonrod said.

Alleging she was exposed to chemicals and an “intense smell” that caused her to be disabled in an unspecified way, the police department in Edgewater, Florida, rejected both of Ms. Miles' claims for benefits, according to court records.

She then signed two retainer agreements with a law firm, the first of which stated the Fraternal Order of Police, a union representing more than 300,000 law enforcement officers nationwide, would pay the law firm a flat fee of $1,500 to represent Ms. Miles. The second said Ms. Miles agreed to pay her attorney an hourly fee for time expended beyond 15 hours.

But a Florida judge of compensation claims said “the job of the (judge of compensation claims) to apply the law as it exists” and ruled the retainer agreements were contrary to the state's workers comp law.

But in its ruling last week, Florida's 1st District Court of Appeal agreed that the attorney fee statutes are unconstitutional “because they impermissibly infringe on a claimant's rights to free speech and to seek redress of grievances.”

The appellate court stated that an injured worker should be able to pay an attorney with his or her own funds – or someone else's – subject to a judge of compensation claims finding that the fee is reasonable.

It's unclear how the case will be interpreted moving forward if the Edgewater Police Department doesn't appeal to the state Supreme Court, said Tammy Perdue, general counsel of Tallahassee-based Associated Industries of Florida, which supports businesses in the state.

Should the appellate court ruling stand, “that could lead to an increased volume of judicial activity – perhaps not litigation, per se, but possibly,” Ms. Perdue said.

The decision also could affect how long claims are open, the number of claims that are filed and the number of petitions filed per accident, Ms. Perdue said.

It will be interesting “to see what kind of cost impact or behavioral changes this case creates,” she said.