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The Utah Industrial Commission is proposing that an emergency rule change be used to retract the regulation of attorney fees for workers compensation cases by state lawmakers.
This move comes on the heels of the Utah Supreme Court's unanimous ruling in May that the “separation-of-powers doctrine” doesn't permit state lawmakers to regulate attorney fees, deeming it unconstitutional.
The notice of emergency rule is intended to annul Regulation 602-2-4, Utah's rule that implements the statute of paying attorney fees and costs.
The commission's sole authority to regulate attorney fees was contained in Utah Code Section 34A-1-309, the statutory provision that required the Utah Labor Commission to regulate attorney fees in workers compensation cases.
The Industrial Commission said in the state bulletin published Friday that when Utah Code Section 34A-1-309 was deemed unconstitutional, it left the commission no authority to “enforce the remaining provisions of the section.” The notice also said that the commission now lacks the “authority to regulate or enforce the payment of costs.”
It is also impossible for the commission to anticipate whether there will be a cost for injured workers related to this change because it is unclear whether “the Supreme Court's decision will immediately result in attorneys seeking a higher percentage of the injured worker's benefits for attorney fees,” the commission said in the notice.
However, the cost change would be due to the high court's decision and not the deletion of the rule, the notice said.
The Boca Raton, Florida-based National Council on Compensation Insurance Inc., which files rates on behalf of Florida's workers comp insurers and other stakeholders, proposed a 15% rate increase May 27 in response to a recent Florida Supreme Court decision deeming it unconstitutional to cap claimant attorney fees. The increase accounts for the potential impact the court ruling could have.
In ruling that Florida's mandatory cap on attorney fees is unconstitutional, the state Supreme Court has opened the door to higher claims costs, a workers compensation rate increase and additional litigation.