Injured workers in Florida might be able to receive both workers compensation benefits and civil liability damages should an appeal filed last week by the Florida attorney general's office fail to overturn a ruling that declared the state's exclusive remedy provision unconstitutional.
That and other litigation challenging workers comp reforms eventually could result in higher comp premiums for employers in the state, experts say.
In the most recent ruling, Judge Jorge E. Cueto of Florida's 11th Judicial Circuit Court ruled last month in Florida Workers' Advocates v. State of Florida that the state's workers comp exclusive remedy is unconstitutional because workers comp reforms have “decimated” comp benefits and “no longer (provide) a reasonable alternative” to allowing workers to sue in civil court.
Exclusive remedy rules in Florida, and in most other states, make workers comp the sole way to recover money for their injuries. Liability lawsuits typically are allowed only in the case of gross negligence by an employer.
In an email response to questions, the state attorney general's office said it will appeal Judge Cueto's ruling to Florida's 3rd District Court of Appeal.
Eddy Canavan, vice president of workers compensation practice and compliance at Sedgwick Claims Management Services Inc. in Riverside, California, said there are hazards in appealing, including the fact that doing so could expand Judge Cueto's ruling from Miami-Dade County, to the entire state of Florida.
“They run the risk that if it's upheld, then it's precedent, and then it's going to cause a lot more issues for employers in Florida in that injured workers would then have two avenues” to recover damages for occupational injuries, Mr. Canavan said.
Should the attorney general lose its appeal, workers “could go ahead and settle their comp claim and then file for a civil claim to recover additional benefits on top of what they were able to receive on their comp claim,” Mr. Canavan said.
What's more, employers could see similar cases challenging workers comp laws and exclusive remedy provisions in other states where injured workers feel that workers comp reforms have stripped them of too many benefits, said Charles Davoli, Baton Rouge, Louisiana-based president of the Workers' Injury Law & Advocacy Group, which is a plaintiff in the Miami-Dade County case.
“Workers comp systems, which are a century old, are in crisis,” Mr. Davoli said. The Miami-Dade case “is what I would term the tip of the (workers comp) 'deform' iceberg,” he said, citing states such as Montana and Georgia as ones that could see legal challenges to limits on workers comp benefits.
Experts say the Miami-Dade court decision is part of a spate of lawsuits challenging Florida's workers comp law. Three cases are being considered by the Florida Supreme Court, and could potentially spike costs for employers.
“What you see in Florida's history is that after any major reform, there are periods where rates are declining, businesses are enjoying lower costs, and then eventually there are court cases that tend to erode some of those reforms and costs start to rise again. So I think that's what we're seeing here in Florida,” said Lori Lovgren, Boca Raton, Florida-based state relations executive for the National Council on Compensation Insurance Inc.
She described suits challenging the state's workers comp law as “ominous in terms of the potential impact on (workers comp) rates.”
Sedgwick's Mr. Canavan said such cases have been appearing in the wake of Florida workers comp reforms over a number of years, such as a series of reforms enacted in 2003 that capped attorney fees, among other changes, and a 1994 reform package that limited temporary total disability benefits to 104 weeks.
Such restrictions have helped lower workers comp costs for employers in Florida, he said.
The state has seen a 56% drop in workers comp prices in the decade since the 2003 reforms, according to a 2013 report by the Florida Office of Insurance Regulation.
However, restrictions meant to alleviate workers comp cost pressures on employers and insurers have created “tension” among claimants seeking fair and timely compensation for their injuries, Mr. Canavan said.
“I think we're at that point where we have this tension going on that's going to have to most likely result in some sort of correction, and that correction could come from (Florida) Supreme Court decisions” as well as further legislative action, he said.
Florida employers are keeping an eye on the Miami-Dade county exclusive remedy case and other challenges to Florida workers comp law, said Harry M. George, workers compensation manager for Palm Beach County, Florida, which has 7,000 employees.
Should the state appellate court agree the exclusive remedy provision is illegal, Mr. George said it would have limited effect on Palm Beach County and other public employers, which benefit from a sovereign immunity clause under Florida law limiting judgments against governmental entities to $200,000 a person.
Still, the case could pose a threat to private-sector employers, Mr. George said.
“The private employers and insurance companies have much more to lose from these decisions,” he said.
Mr. Davoli said his organization does not want to undermine workers comp exclusive remedy rules nationwide. Unlike workers comp, a no-fault system that pays benefits to injured workers and provides immunity for employers, liability lawsuits can take years to litigate and require workers to prove they weren't at fault for their injuries.
Mr. Davoli said he hopes cases like the Miami-Dade decision will prompt Florida and other states to relax benefit caps or increase benefit levels for injured workers.
“It should be a wake-up call. It should be an attention-getter,” he said.