Thursday, December 24, 2015

Attorney Fee Reform

Attorney's fees are in the news. Not in Florida, here we await the next development from the Florida Supreme Court in Castellanos and those other cases upon which the Court has invited briefs (the "companion cases"). 

But  in June, the Oregon Governor signed a new attorney fee bill. According to WorkCompCentral, the result will be that "claimants' attorneys" will be compensated "for more services," and they will be able to "collect interest in cases where the employer challenges an award of attorney fees." These are two interesting topics.

There are limits on attorney fees in Oregon. Attorneys fees there are capped at $4,000 "where an attorney successfully argues a carrier or self-insured employer unreasonably delayed or denied payments." Before this reform bill was signed, attorneys were not "paid for working on these cases." 

So, one might argue that before the recent Oregon reform Florida's attorney fee provisions were more generous than Oregon's. That is hard to quantify. I have read fee statutes from a variety of states, and they are very difficult to compare to one another. The specificity of their provisions, in some cases to particular classes or periods of benefits, is interesting and intriguing. 

Generally, when the statutory law is changed in Florida, the substantive provisions apply prospectively, to the future, only. If a procedure is changed, then that procedure may be applied to cases involving accident dates before the law was enacted. Generally speaking, procedural changes are applied retroactively and substantive changes only prospectively. 

It is a fair bet that an attorney fee statute change like this would be deemed substantive in Florida and applied only to recent and future claims. The Oregon bill, however, is specifically intended to apply to any "decision issued on or after January 1, 2016." (emphasis added). The legislature intends that regardless of the date of accident involved in a particular case, or when a claim was filed in that case, the new fee statute applies if the decision on the fee comes after December 2015. That is interesting. 

Some would argue that this puts a burden on the party paying. They would argue that the insurance premium collected back in 2010 was based on what claims might cost under the law in effect that year. To now add liability for those past claims might seem to add cost without compensation. Most benefits are fixed by the law in effect on the workers' compensation date of accident, for this reason. 

Others might argue that restrictions on fees or benefits, fixed in a particular year, do not keep pace with the market when inflation changes the relative value of goods or services. Inflation may change what fixed dollar amounts are actually worth. 

Another interesting element of the law will require some consideration of the effects of inflation. The Oregon Workers' Compensation Board will now have to "review attorney fees every two years to ensure payment is reasonable for the amount of work lawyers put into representing injured workers." 

Inflation is a complex subject. There are multiple ways of considering inflation, and to some extent your conclusions about whether there is inflation, and how much, is a product of what you analyze (or buy). The U.S. government defines what is considered in determining the Consumer Price Index, or CPI. That calculation measures a "market basket" of certain consumables. By comparing the cost of that basket today against the same basket at some point in the past, they tell us if prices are rising, declining, or static. 

This does not always necessarily equate to our personal experience in a micro-sense. Though the government tells us that inflation is minimal over the last few years, the price of bread, milk and eggs have certainly increased in my neighborhood. Possibly, other good's prices have decreased, which could make the whole "basket" look reasonably similar. Or, it could be that bread and milk are not included in the basked of what is calculated. 

So Oregon will now try to do an administrative evaluation bi-annually to assure that its workers' compensation attorney fees are reasonable. That is a different approach than we have taken by codifying an alternative fee in Florida for some (medical only) claims of up to ten hours at $150.00 per hour. That rate and hour limitation is in the statute, and has not changed since that provision was enacted, about fifteen years ago. 

Another element of the Oregon change worth further discussion, is allowing attorneys to "collect interest in cases where the employer challenges an award of attorney fees." In Florida, there can be delay that results from litigation. An attorney might claim fees are due, and that could be denied by the employer or carrier (e/c) The attorney would file a verified motion for fees, and the E/C is required to file a response. 

In the normal course of our procedure, it should take no more than 90-100 days for this issue to be heard, and our judges have been reasonably consistent in producing final orders within 30 days of trial. In all, a fee determination should usually be concluded with a trial order in less than six months; most are adjudicated more rapidly. Of course, the trial decision could be appealed, and review might take six months or more. 

But the point is that for this six months, or year if appellate review is sought, the claimant's attorney does not have the money for that fee. It appears that the Oregon law change will allow the attorney to collect interest on that fee amount. This may be an incentive for the E/C to resolve fees when they can, without litigation, because unresolved fees become more expensive the longer they require for resolution. 

As Florida waits for the Supreme Court, it is interesting that limits on attorney fees, and fee reform generally, are the subject in other states also. 

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