Wednesday, September 4, 2013

Attorney William Gregory's Idea to Amend Attorney Fee Statute.

I often ask people for their opinions about the Florida workers' compensation system. Sometimes, I hear unsolicited from people who have opinions and ideas. The following is an example of this. 

William Gregory, an attorney with considerable experience in Florida workers' compensation, has an idea for amending the attorney fee statute. The idea is his. It's expression here is at his request. The publication of the idea on this blog is neither an endorsement or indictment of the idea. Neither I nor the OJCC take any position on such matters. It is presented here merely for information of the public, and any comments you might wish to make. From Mr. Gregory (in blue):

I want to propose a change to F.S., Section 440.34 (1) that I believe will benefit everyone involved in Florida’s Workers’ Compensation Law- no matter which side they are on. I am (hopeful) a majority agreement will result in a petition to our Legislature to make this change.

I have been practicing quite a while and over the years I have handled cases in virtually every jurisdiction and ever since the amendments to our law in October of 2003, it has been my experience that we can no longer settle cases cheaply, as it now typically costs approximately a minimum of $5,000.00 to settle even the low value cases, i.e. “nuisance value cases,” of which there are many examples – with the most common example being where the injury in dispute is minor, but the cost of litigating it is great. 

I am sure all of us can remember a case that should have been settled cheaply, but under the present statutory scheme could not be. We frequently see Employers who swear that they have never employed the Claimant or even heard his name before, but that allegedly wrongfully accused Employer, who desperately wants to get out of this case cheaply, must nevertheless hire an attorney and spend thousands of dollars just to exculpate himself from the pending litigation. 

Claimants run the risk of getting stuck paying large cost awards if they having to litigate a simple case involving basic issues (compensability, AWW, TPD/TTD, etc.) that otherwise should have been settled for a reasonable amount. Many times, we, as experienced attorneys (both Claimant’s Attorneys and Defense Attorneys alike), know that it will be in our client’s best interest to settle the case as quickly and as cheaply as possible, rather than proceed to Court. We used to be able to settle these types of cases for much less than $5,000.00, but it appears to me that it is the statutory scheme mandating an attorney fee of no more than 20% of the first $5,000.00 in benefits obtained, which we all know results in an attorney fee of merely $1,000.00, that is the cause of this increase in the amount of minimal settlements. 

Clearly, higher minimal settlement amounts hurt the industry. After the Claimant’s Attorney spends his/her valuable time meeting with the Claimant, signing the Claimant up as a client, filing their Notice Of Appearance, filing their Request To Produce, filing their Petition For Benefits, setting up the new file, etc., that Attorney has professional time invested in the file and will not settle the case unless that Attorney is at least minimally compensated for the time already expended. 

Furthermore, both Attorneys involved know that it will cost the Insured Employer or Uninsured Employer $5,000.00 or more to defend even a very questionable claim. However, the present attorney fee statute virtually forces the minimal settlement amount to be $5,000.00 because that is the minimal amount of money necessary to minimally compensate the Claimant’s Attorney for the time they have expended on this matter. 

Typically, such claims are filed and Defense Counsel gets involved and initiates discovery – usually beginning with the Claimant’s deposition and then proceeding to depose any witnesses to the alleged accident, followed by the depositions of any Health care Providers involved and all of this costs quite a bit of money and as these cases proceed to trial, both the Claimant’s Attorney and the Defense Attorney are continually spending more and more time and resources on the case, which further increases the costs of the case and makes it harder to settle for a reasonable amount, but by that time we have the benefit of hindsight and realize that the amount of money spent on litigating the case would have been better spent settling the case and ending it once and for all. 

Wouldn’t it be great if the law enabled and encouraged attorneys to settle cases cheaply? I propose that it would be in the best interest of both Claimant’s and Employers if F.S., Section 440.34 (1) allowed attorney fees up to 50% of the first $5,000.00 - instead of just 20% - because it would enable the lesser value cases to be settled for less than $5,000.00. 

I believe that there are numerous reasons why such a change would benefit both parties to these cases. It would enable these types of claims to be settled for $2,000.00 or $3,000.00 instead of the $5,000.00 for which they are typically settled now. It would enable the Claimant’s Attorney to be paid a reasonable attorney fee even with a smaller settlement, which would encourage settling cases for lesser amounts and less costly settlements would obviously also benefit the Employer, who would pay less to settle such cases. Such a change in the law would provide both the Claimant’s Attorney and the Employer’s Attorney with a way to help their respective clients by providing a quick and cheap way to get out of a case that is becoming too costly to stay involved until the time of trial. 

Such a change in the law will cause the attorneys to pause and consider a less costly settlement at the beginning of such cases and it will also benefit the overly congested Court System by reducing the number of cases proceeding to trial. Since all Claimant paid attorney fees must be approved by a Judge, this minor change would not result in lesser protections for the Claimants. I am of the opinion that the change that I am proposing herein would benefit Florida’s Workers’ Compensation System as a whole.

Judge, will you help me get this discussion going statewide by disseminating my idea of changing F.S., Section 440.34 (1) to all of the attorneys practicing Workers’ Compensation Law in Florida? What do you think of my proposal? I appreciate you taking the time to hear my thoughts on this matter and I would sincerely appreciate hearing back from you, as your busy schedule may allow. Thank You!

Let Mr. Gregory know what you think. Email him at wgregory@williamgregorylaw.com

Do you have an idea upon which you would like feedback or comment? Email your idea for publication to me at david.langham@doah.state.fl.us.

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