Tuesday, January 2, 2018

Florida Cost of Litigation Resolved 2017

The Florida Office of Judges of Compensation Claims (OJCC) budget, divided by the number of petitions for benefits (PFB) closed, reflects that the overall cost per PFB closed fluctuated in recent years due in large part to the significant fluctuation in PFB closure rates.

These figures demonstrate relevance when considered in comparison to filing fees in Florida’s Circuit Courts. For “small claims” filings, the Circuit filing fees may be as low as fifty-five dollars ($55.00), but for civil claims with a value over $2,500.00, the filing fee is three hundred dollars ($300.00); for larger claims the Circuit filing fee may be as high as four hundred dollars ($400.00). 

The OJCC is demonstrably more financially efficient, with a per-petition cost well below the Circuit Court filing fees. Additionally, in the majority of instances, the OJCC cost is inclusive of mediation services, which generally are an additional cost to the parties in other civil litigation. Over the last fifteen fiscal years, the average cost per petition closed was $232.00, just above half the comparable Circuit Court filing fee.

The fluctuations of “per PFB” costs is also attributable to the minimal growth in the OJCC annual budget through 2008, followed by five consecutive budget reductions between 2009 and 2013. The OJCC budget has seen minimal growth, periodic reductions, and has not maintained pace overall with inflation. The OJCC today is operating on a budget similar to 2005-06. If the 2002-03 budget was adjusted for inflation alone, the 2017 budget of the OJCC would have been $21,981,397 instead of $17,430,852, a difference of $4,550,545, or just over 26%.

The OJCC today is spending less per full-time employee (“FTE”), adjusted for inflation, than in 1992-93. During the significant increase in case filings between 1994 and 2003 the OJCC budget effectively decreased, when adjusted for inflation. Florida’s population has also grown markedly in the last twenty years. However, the number of judges has remained virtually static over the same period. These facts illustrate that the OJCC has been very effective at wisely managing the resources provided.

Petition for Benefit (PFB) closure rates have stabilized and closely follow the current filing rates. There is every reason to believe that trend will continue. A minimal volume of overdue PFB inventory may remain unaddressed in this litigation system, which appears from available data, to be substantially in equilibrium. The resulting cost per PFB closed is therefore likely to increase if PFB filing volumes decrease, and to decrease if volumes increase.

Another illustration of the cost-effectiveness of the OJCC is the volume of child support arrearages collected through the judges’ efforts. The Judges of Compensation Claims are statutorily required to ensure that the rights of child support recipients are considered when support payers settle their workers’ compensation case. Each judge devotes considerable time and effort to the investigation and verification of child support arrearages when cases are settled. 

The significant amounts of child support collected through these efforts for the last fifteen (15) fiscal years  total over $160 million ($162,740,517). When the judges were given the responsibility for recovering these arrearages, no staff or budget was added to the OJCC to accomplish this task. The volume of child support arrearages collected is particularly interesting when considered in light of the overall OJCC budget discussed above. 

Over the last fifteen (15) fiscal years, the OJCC has collected an average of 63% of its overall budget in past-due child support to the benefit and advantage of support recipients throughout Florida. In 2012-13, the OJCC undertook the duties associated with reporting arrearage information on behalf of the Department of Revenue (DOR). In 2013-14 the OJCC integrated the process of reporting Circuit Clerks’ arrearage information. This combination eliminated redundancy and waste across the process for all Florida workers’ compensation litigants. Litigants in Florida’s workers’ compensation adjudication system now get all of their required child support arrearage information from the OJCC instead of DOR and the Circuit Clerks. 

These tremendous child support services on behalf of support recipients have been delivered without any additional staff or funding for the OJCC operations. Because of the sensitive nature of this data, the burden of investigating these support inquiries has fallen primarily on the OJCC mediators and Commission Clerks. The comparison of child support recovery (red) and the OJCC overall budget (blue) is illustrated in this graph (in millions).

The decrease in child support collected in 2008-09 was seemingly significant. However, that appearance results primarily from the exceptional collections in 2007-08. Overall, the support volume has remained somewhat similar. Notably, the volume of settlements that were approved by the Judges of Compensation Claims likewise decreased contemporaneously, and has then remained significantly consistent for the last seven fiscal years.

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