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One night in September 1998, while working in the flower room of a Fort Lauderdale funeral home, a 42-year-old female employee was beaten, raped and held by an attacker for more than three hours. While the Oakland Park woman’s physical injuries were not severe and healed within a month, the attack left her with a crippling fear that prevented her from leaving home alone, even to see a psychiatrist. Attorney Ramon Malca represented the woman in her workers’ compensation case. The funeral home’s insurance carrier agreed to pay her a $150,000 settlement. Malca, managing partner at Malca & Jacobs in Miami, a firm that focuses on workers’ comp cases, was awarded $22,000 in fees for three years of legal work on the case. But Malca says that if the woman brought the same case to him after Oct. 1 — when a new Florida workers’ comp law takes effect for people who are hurt on the job after that date — he would have to reject the case for financial reasons. “There’d be very little I could do for her,” Malca said. Under the old system, the woman was able to claim that her post-traumatic stress disorder resulting from the attack rendered her permanently and totally disabled and unable to return to work. Under the new law, she would only be eligible for compensation based on her psychiatric condition for six months after her physical injuries healed. That change is included in a sweeping new workers’ comp legislation pushed through in May by Gov. Jeb Bush and Republican lawmakers with the strong support of business and insurance groups. The law will make it harder for many injured workers to win benefits, particularly for psychiatric injuries, and will sharply limit the fees that claimant attorneys can receive. That, in turn, may drive attorneys out of the business of representing clients in the workers’ comp system, claimant attorneys warn. Making workers’ comp cases less attractive for lawyers was an explicit goal of the bill’s supporters, who argued that excessive involvement by attorneys in the workers’ comp system has led to unnecessary litigation and soaring workers’ comp insurance costs for Florida employers. In August, at a convention on workers’ comp in Orlando sponsored by the Florida Workers’ Compensation Institute, a number of practitioners said the new law has forced them to consider whether to leave the workers’ comp field. Others said they will look for ways to sidestep the workers’ comp system and bring injured workers’ claims against employers in circuit court. There are 1,693 members of the workers’ compensation section of the Florida Bar and 242 board-certified workers’ comp attorneys in the state. “I think it’s going to be difficult for any claimant attorney to have a practice devoted exclusively to representing claimants,” said Sean Culliton, founding partner of Anderson Culliton & Sullivan in Tallahassee and vice president of Florida Workers Advocates, a trade group of claimant attorneys. “My firm is branching out into other areas already.” Particularly hard hit will be injured workers like Malca’s client who claim psychiatric damages arising from physical injuries suffered on the job. Even some workers’ comp defense attorneys are concerned about the mental health provisions of the new law. “There are genuine psychiatric injuries out there, whether defense attorneys and judges and insurance companies want to believe it or not,” said Steve Kronenberg, a founding partner at Kelle Kronenberg Gilmartin Fichtel & Wander in Miami. Already, the law has come under heavy attack. To the intense displeasure of business groups, Republican legislative leaders have promised to revisit the measure. Senate President Jim King, R-Jacksonville, has directed the Senate Banking and Insurance Committee in writing to review “possible unintended consequences,” including “how the limitations on attorney fees may affect access to legal representation.” And House Speaker Johnnie Byrd, R-Plant City, who is running for U.S. Senate, has appointed a select committee to examine how the new law will affect injured firefighters and other emergency workers. His so-called homeland security workers’ compensation workgroup holds its first meeting Oct. 22 in Orlando. Mary Ann Stiles, general counsel for Associated Industries of Florida, a lobbying group in Tallahassee that led the push for the overhaul, expressed anger about the move to roll back the law, which her group had sought for many years. She said claimant attorneys are “raising a lot of a hullabaloo for nothing.” WHO’S TO BLAME? Workers’ comp cases can either involve claims only for medical costs or claims for both medical costs and lost wages. Medical-only claims occur when an employee injured on the job requires medical care but is out of work for less than seven days. If an injured employee misses more than seven days, he or she also can file for lost wages. There were 71,812 indemnity/medical claims in Florida last year, reports the Florida Division of Workers’ Compensation; the agency does not collect data on medical-only claims. Nearly 200 insurance carriers write workers’ comp coverage in Florida; they collect about $3 billion annually in premiums from employers, who are required to carry coverage. Yet in Florida as well as nationally, workers’ comp carriers are losing money, according to the National Council on Compensation Insurance. In 2001, the latest year for which data were available, for every premium dollar collected insurance carriers paid out $1.27 in costs in Florida, compared to $1.22 nationally. Those figures don’t take into account investment income earned by insurers. Insurers acknowledge that a significant share of their claims losses are due to higher prices charged by medical providers. More deaths and injuries on the job also played a role. In 2001, there was a 12 percent increase in the number of fatal occupational injuries in Florida, according to the Florida Division of Workers’ Compensation. Florida was third in the nation in occupational fatalities in 2001 with 368 deaths, behind California and Texas. But the insurance industry and business groups led by the Associated Industries of Florida lay most of the blame on claimant attorneys. They say that when attorneys represent claimants in what is supposed to be a pro se system, the cost of cases goes way up. Claimant attorneys reply that workers often don’t get the full benefits they deserve without legal representation. Fort Pierce defense attorney Paul Westcott said the new law was badly needed — even though it could reduce the amount of work for defense lawyers like himself. “Is this something that my profession asked for?” he said. “At the risk of getting daggers in my back and a bomb underneath the hood of my car, I’d have to say yes. Whenever there has been the opportunity for abuse, someone has been there.” Some — though not all — business representatives say the new law will drive down Florida’s workers’ comp insurance premiums and persuade more carriers to offer coverage in the state. The insurance industry estimated that the bill would save employers nearly $400 million a year starting in 2004. After the law was enacted, the Florida Office of Insurance Regulation ordered a 14 percent reduction in workers’ comp insurance rates. And Stiles predicted that employers will enjoy another 4 percent reduction after more small employers are required under the law to carry coverage; that mandatory provision takes effect on Jan. 1. FEE LIMITS The comprehensive provisions of S.B. 50-A, which was approved in special session on a near party-line vote, cover attorney fees, eligibility for and amount of benefits, payment levels for medical providers, and who’s required to carry workers’ comp coverage. Up until now, workers denied compensation by their employers’ workers’ comp insurer often have hired lawyers to appeal their case to a judge of compensation claims (JCC). They generally paid counsel directly out of their compensation awards on a contingency fee schedule set by statute. Fees are 20 percent of the first $5,000 awarded to the claimant, 15 percent of the next $5,000 and 10 percent of any amount beyond that. But the law gave JCCs discretion to modify that payment arrangement. If, for example, the employer denied that the injury was work-related but the judge ruled in the worker’s favor, the judge could order the employer or carrier to pay the claimant’s legal fees over and above the compensation award. The judge also could order the employer or carrier to pay the lawyer a reasonable hourly fee. The judge could set the hourly fee based on the amount of work and complexity of the case. While there is uncertainty about the precise meaning of a number of provisions in the new law, it apparently prohibits JCCs from awarding unlimited hourly attorney fees, thus limiting attorneys to the statutory contingency fee schedule. There is an exception for medical-only cases, allowing a judge to award up to $1,500 in hourly fees in lieu of the statutory fee schedule, but only once per case. Equally alarming to claimant attorneys is a provision that limits the fees that can be collected from the employer or insurance carrier in cases where an offer to settle is made in writing 30 days prior to the hearing date. Under the new law, in those cases the contingency fee must be based on the difference between what the employer or carrier offered in settlement and what was ultimately awarded by the JCC — not based on the total benefits awarded. Miami claimant attorney Mark L. Zientz said that provision rewards insurers for making late settlement offers and punishes claimant attorneys who worked hard to force the carrier to settle. “If you do your job real well and [the carrier] throws in the towel, you get no fees,” he said. “You can’t work for that amount of time and not know whether you even have a shot at being paid.” The law requires res judicata, prompt consideration of all “ripe, due and owing claims.” That is designed to force claimant attorneys to consolidate the issues in one claim, as opposed to filing piecemeal litigation in courts of compensation claims. Claimant attorneys also are barred from collecting contingency fees upon settlement of a case — based on a fee contract with the client — in excess of the fee caps in the new law. Claimant attorneys say the new fee provisions will be devastating to lawyers and their clients because it can take dozens or even hundreds of hours to win needed benefits for injured workers. But defense attorney Westcott, managing partner of Hurly Rogner Miller & Westcott, said the new law will reduce the financial incentive for both claimant and defense lawyers to “churn” cases — do unnecessary extra work to milk more billable hours. Taking depositions from claims adjusters is a prime example of churning, and it’s on the rise, he said. Mary Ann Stiles, who heads Stiles Taylor & Grace, a workers’ comp defense firm based in Tampa, said claimant attorneys are blowing smoke in warning that injured workers no longer will be able to find lawyers to represent them. Workers were able to find lawyers before hourly fees were allowed, and they will continue to be able to do so after the new law takes effect. “What’s the big deal?” Stiles complained. “Why are these greedy people saying they need [hourly attorney fees] again?” She argued that lawyers will just have to take more cases to make money. Other provisions in the new law make it harder for injured workers to win benefits and place new limits on how much they can collect. Those measures also will impact attorney fees, because fees are based on how much clients collect in benefits. For example, under the new law claimants who contest carrier denials must pay for the cost of a second independent medical exam (IME) for any separate injuries arising from the same workplace accident. IMEs can cost more than $1,000 in South Florida and are vital in proving a medical claim. Currently, the insurer carrier must pay for all IMEs. The legislation will prevent injured workers who otherwise qualify for permanent total disability payments from receiving such benefits if they can find sedentary employment within a 50-mile radius of their home. And the law seeks to encourage less seriously injured workers to return to work by decreasing their impairment benefits. On the other hand, the measure increases benefits for more severely injured workers who fall short of permanent total disability. FIELD OF PRACTICE While the law will immediately affect workers injured after Oct. 1, it won’t have a marked impact on most workers’ comp lawyers right away because they will continue to work on cases filed before the new law took effect. But looking ahead, many claimant lawyers say they will have to reconsider their field of practice because of how the new law will affect their fees. For medical-only cases, the ban on unlimited hourly fees will make cases involving low-dollar claims but lots of work hours unattractive, they say. The judge of compensation claims will decide whether the claimant attorney will receive the statutory fee schedule or the hourly fee ranging up to $1,500 — based on a rate of $150 an hour, which is significantly less than many Florida workers’ comp attorneys charge. The $1,500 hourly fee is a more lucrative option than the contingency fee schedule for medical-only cases involving claims of less than $7,500. On the other hand, for medical-only claims exceeding $7,500, an attorney would make more money under the contingency fee schedule. But it’s not a particularly attractive choice in lower-dollar cases, claimant lawyers say. Indeed, Ramon Malca said that after Oct. 1, he will turn down any case involving less than $10,000 in claims. He said many hours of work can be involved even on a small-dollar, medical-only claim. He recalls how he once spent 90 hours preparing for and trying the case of an injured worker who’d been denied $4,000 in medical services and devices that were prescribed by his doctor. When Malca won the case, he collected a $40,000 fee. In that same case under the new law, however, his fee would range from $800 to $1,500. “There’s no way anyone takes that kind of case, even if you know you are going to win,” he said. “And that’s the key point. People are going to do without, and the insurance companies will get another free ride.” In addition, claimant attorneys will have a more difficult time showing that workers are permanently and totally disabled — the most lucrative type of case for attorneys. Workers who are found permanently and totally disabled collect benefits equal to two-thirds of their initial salary, adjusted annually for cost of living increases. Benefits for injuries stemming from toxic exposure or repetitive trauma also may be harder to win because claimant attorneys will have to convince a judge of compensation claims that the job-related injury was the “major contributing cause” of the claimant’s medical condition. That will increase the burden on claimant attorneys. Then there is the issue of benefits for psychiatric conditions. Under the new law, a mental or nervous system injury is not compensable unless the physical injury is and remains the major contributing cause of the mental health problem; the physical injury must be at least 50 percent responsible for the mental condition. Sean Culliton said the majority of his cases involve unpaid wage loss benefits. Like Malca, he said he will be turning away lower-dollar cases. For example, the case of a worker who earned $24,000 a year and is temporarily totally disabled by a workplace injury — meaning he can’t work but is expected to eventually improve — would no longer be economically viable. Culliton said that worker, if he or she was injured after Oct. 1, would be eligible for a lost-wage benefit of $20,800 for being out of work for one year. But to show that the worker is temporarily totally disabled, Culliton would have to take depositions and litigate, which could require more than 70 hours of work. If Culliton won the case, he would be entitled to $2,830 in fees. That’s far less than the $12,000 he could make in hourly fees under the old law, based on a $175 hour fee. “You’re not going to get an attorney involved for that kind of money,” Culliton said. Even in cases that remain financially worthwhile under the new law, claimant attorneys say they will have to spend less time on each case. Malca said he will take fewer depositions and will rely more on medical reports to prove his client’s case. To save on costs, he will pass more of the work on to his paralegals. Malca envisions spending less time talking with new clients in person and on the phone. With his client who was raped and beaten at the funeral home, he spent lots of time giving her emotional support and counseling. Now, he said, claimant attorneys “just are not going to have the same level of direct involvement with their lawyer.” SUING EMPLOYERS Ironically, the new law may open Florida employers to more tort lawsuits in circuit court, where some claimant attorneys say they will take cases because they can earn bigger fees than in the new workers’ comp system. Mark Zientz says he may limit his representation of injured workers to those who qualify to seek redress in circuit court. He will accept new cases only if the employer or carrier denies the worker any workers’ comp coverage. When employers and insurers refuse to recognize any compensable injury under the workers’ comp system, they are no longer immune from civil lawsuits under the no-fault compensation system. He said he will sue employers to collect on so-called Coverage B of their workers’ comp insurance policies. Employers are required to have Coverage B, which serves as a gap policy between their workers’ comp coverage and general liability coverage. It does not cover injury or disease caused by the employer. While the number of cases eligible for circuit court may be limited, “I will make more money on five or six cases I take to circuit court than on the 200 cases that I take to workers’ comp,” Zientz predicted. “But that means there are 195 people who won’t have a lawyer.” Meanwhile, other attorneys are searching for good cases on which to base a court challenge to overturn the new law. Indeed, attorneys and judges of compensation claims predicted at the workers’ compensation convention in Orlando in August that there will be a stream of litigation arising from the law. Ivy Cream Harris, a judge of compensation claims who sits in Jacksonville, said her first rulings and those of her colleagues based on the new law likely will be appealed to the 1st District Court of Appeal, which hears all workers’ comp appeals. “I am almost positive [that JCC decisions] will all be appealed in the first couple of cases because each side will want to know what this law really means,” Harris said at the Orlando meeting. “They will want to get the opinions from the 1st DCA or the Supreme Court.” Orlando claimant lawyer Stewart Lee Colling, a former president of the Florida Workers Advocates, predicted at the conference that the provision requiring an injured worker to pay the costs of the second independent medical examination will be challenged immediately because it will block low-income people from seeking workers’ comp benefits. “I feel relatively comfortable that there will be a challenge and it will be relatively successful,” he said. Defense attorney Steve Kronenberg said he is particularly concerned about the constitutionality of the new provisions limiting mental health benefits. He thinks it’s indefensible that all psychiatric injuries, no matter how minor or severe, qualify for the same level of benefits. “That’s the [legal challenge] I think we’ll see first,” he said. But while those challenges slowly work their way through the courts, Zientz said there’s not much he can do for most injured workers under the new workers’ comp system. He said he will direct people to their company’s employee assistance office, refer them to the county welfare department for food stamps and inform them about hospitals that provide publicly subsidized care to the indigent. “It’s just a shifting of the burden to the taxpayers without telling them they have assumed this burden,” Zientz complained.

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