Guest post by Workers’ Compensation Attorney Michael McCabe:
On April 28, 2016, the Florida Supreme Court entered its long-awaited decision in the case of Marvin Castellanos v. Next Door Company, et al. The Court held that the statutory limitations on Workers’ Compensation attorney’s fees created by the Florida Legislature violated the Due Process clause of both the Florida and United States Constitutions. Rather than a limited fee based on a percentage of the benefits actually secured, attorneys representing injured workers may now be awarded an hourly fee for time and effort reasonably spent litigating Workers’ Compensation benefits.
Out with the Old (Formula)
In 2009, the Florida Legislature amended Florida Statutes Section 440.34 to create an irrebuttable presumption that only allowed a judge to award a statutory guideline fee in a Workers’ Compensation case, instead of giving a judge the discretion to award either the statutory guideline fee or an hourly fee. This “guideline” resulted in the following formula that limited the amount an injured worker’s attorney could be paid to:
- a fee based on 20% of the first $5,000 of the amount of benefits secured by the attorney;
- 15% of the next $5,000.00 of the amount of benefits secured;
- 10% of the remaining amount of benefits secured to be provided during the first 10 years after the date the claim is filed; and,
- 5% of the benefits secured after 10 years.
In Castellanos, this statutory formula resulted in an attorney’s fee of $822.70, despite the fact the worker’s attorney reasonably spent 107.2 hours litigating a complex case to secure benefits for his client. This made the effective rate for the attorney $1.53 per hour. The First District Court of Appeal affirmed the result, noting it was constrained to abide by the statutory formula, but it certified the question to the Florida Supreme Court.
In considering the constitutionality of the statutory attorney fee limitation, the Florida Supreme Court addressed:
- whether the Legislature “was reasonably aroused by the possibility of an abuse which it legitimately desired to avoid;”
- whether there was a reasonable basis for a conclusion that the statute would protect against the abuse’s occurrence; and
- whether the expense and other difficulties of individual determinations on attorneys’ fees “justify the inherent imprecision of a conclusive presumption against an award of fees to an injured worker’s attorney,” that would not be limited to the statutory formula.