Every year, the Florida Office of Judges of Compensation Claims submits a report regarding the state of Florida's adjudication system. This year's report is in the proofing stage and will be published close to November 30, 2016. The following is an excerpt from that report.
The Florida
Legislature enacted significant amendments to the Florida Workers’ Compensation
Law in 1994 and again in 2003. After the 1994 reforms, PFB filing volume
consistently increased each year. Just prior to the 2003 reforms, annual PFB
filings peaked at 151,021. The progressive increase in PFB filings between 1994
and 2003 belies the efficacy of the 1994 reforms’ intent to decrease
litigation.
Immediately following the 2003 reforms, the PFB filing volume decreased at a consistent annual rate of approximately fifteen percent (15.21% to 15.9%) over each of the next three years, and then continued to decline with reasonable consistency through fiscal 2013, with the sole exception of a slight increase in 2008-09. PFB filing volume increased just over two percent in 2013-14 and another 1% increase in 2014-15, followed by a 12% increase in 2015-16. The PFB volume in 2015-16 was about 76% higher than the 38,254 filed in 1993 before that “sweeping reform” was passed.
Immediately following the 2003 reforms, the PFB filing volume decreased at a consistent annual rate of approximately fifteen percent (15.21% to 15.9%) over each of the next three years, and then continued to decline with reasonable consistency through fiscal 2013, with the sole exception of a slight increase in 2008-09. PFB filing volume increased just over two percent in 2013-14 and another 1% increase in 2014-15, followed by a 12% increase in 2015-16. The PFB volume in 2015-16 was about 76% higher than the 38,254 filed in 1993 before that “sweeping reform” was passed.
One
component of the 2003 reforms was an amendment to section 440.34, Florida
Statutes, which addresses the payment of attorneys’ fees in workers’
compensation cases. The interpretation of that statutory change was litigated extensively, and
multiple decisions of the Florida First District Court of Appeal (DCA)
interpreted section 440.34, Florida Statutes (2003) as limiting fees to a
“percentage of recovery” fee.
Under those DCA interpretations of section 440.34, hourly attorneys’ fees were forbidden in most cases. In October 2008, the Florida Supreme Court decided Murray v. Mariner Health, 994 So.2d 1051 (Fla. 2008). The Supreme Court’s interpretation of section 440.34 differed from the DCA decisions, and effectively restored entitlement to hourly attorneys’ fees for cases with a date of accident after 2003. It is possible the marginal increase (1.6%) in 2008-09 was related to the Murray decision.
In the spring of 2009, the Florida Legislature amended section 440.34 to again forbid hourly fees. Therefore, the Court’s Murray decision affects cases between October 1, 2003, and July 1, 2009. The mandatory fee schedule was thus in effect again beginning July 1, 2009. This was challenged as unconstitutional, and Castellanos v. Next Door Company, 192 So.3d 431 (Fla. 2016) was decided in 2016. This decision concluded several key points.
First, that attorneys’ fees are the most important element of the Florida workers’ compensation law. The Florida Supreme Court in Castellanos noted “that the right of a claimant to obtain a reasonable attorneys’ fee has been a critical feature of the workers’ compensation law.” The Court went further, however, concluding that “a reasonable attorneys’ fee has always been the linchpin to the constitutionality of the workers’ compensation law.” Castellanos, at 435. Not “a” linchpin, but “the” linchpin.
The common dictionary definition of “linchpin” is “the most important part of a complex situation or system.” Claimant attorney fees, according to the Florida Supreme Court, is the most important part of the Florida workers’ compensation system. Second, that limitations on fees are unconstitutional. And, that access to counsel is a critical element of the workers’ compensation system.
It is, again, possible that perceptions of the outcome of a case, Castellanos in this instance, is affecting PFB filing volumes currently. Some suggest instead that the Florida economy is rebounding from the Great Recession and that increased Florida employment overall is driving increased injury volumes and therefore injury litigation. The OJCC has no foundation to determine what if any particular force is driving the current increase.
Florida workers’ compensation premiums decreased significantly after the 2003 reforms. The cumulative premium decrease through fiscal year 2008-09 was approximately 58%. Interestingly, in that same time period, PFB filings had decreased approximately fifty-two percent (51.85%), which might be interpreted as a close correlation. Any perceived correlation between litigation filing rates and insurance rates is difficult to defend however.
Despite consistently decreasing PFB filing rates between 2009-10 and 2012-13, workers’ compensation rates increased annually during that period. Notably, the rates changes are approved annually in the fall of each year. The filing rates reported demonstrate PFB volumes prior to each described premium change. The effect, if any, of such PFBs might not become apparent for months or even years after filing. Thus, while the rate of filing is interesting, it is in fact the subsequent affect of filing, that is, whether injured workers prevail or not, that could actually affect premium.
The following graph represents PFB filing since 1992-93. The 1994 reforms were intended to curtail litigation. Despite that intention, the PFB filings increased markedly thereafter.
The figures
for periods prior to 2001 (the transfer of the OJCC from the DLES to the DOAH)
are based upon data previously published by the DLES. The reliability of these
statistics can no longer be independently verified. Some question as to the validity of these
figures is raised by the fact that the Petition for Benefits (PFB) process was
not added to chapter 440, Florida Statutes, until the 1994 statutory
amendments, and that the DLES figures nonetheless reflect “PFB” filing prior to
that time.
This could be indicative of an actual flaw in the data, or the figures prior to 1994 may represent the filing of “Claims for Benefits.” Prior to the PFB process, “claims” were filed to put an E/C on notice of a dispute, but the jurisdiction of the OJCC was not invoked until a separate pleading, an “Application for Hearing,” was filed. The current statutes’ PFB is therefore effectively a combination of the prior “Claim” and “Application.” Because of this distinction, it may or may not be appropriate to compare “Claim” or “Application for Hearing” filing to PFB filing.
Presuming the accuracy of the DLES volumes, the PFB filing rate in 2012-13 was the lowest in eighteen years, since 1995-96. And, since that time the trend has indicated increased filings. Preliminary data for fiscal 2017 indicates the potential of significantly increased petition filings, consistent with the demonstrated trend.
This could be indicative of an actual flaw in the data, or the figures prior to 1994 may represent the filing of “Claims for Benefits.” Prior to the PFB process, “claims” were filed to put an E/C on notice of a dispute, but the jurisdiction of the OJCC was not invoked until a separate pleading, an “Application for Hearing,” was filed. The current statutes’ PFB is therefore effectively a combination of the prior “Claim” and “Application.” Because of this distinction, it may or may not be appropriate to compare “Claim” or “Application for Hearing” filing to PFB filing.
Presuming the accuracy of the DLES volumes, the PFB filing rate in 2012-13 was the lowest in eighteen years, since 1995-96. And, since that time the trend has indicated increased filings. Preliminary data for fiscal 2017 indicates the potential of significantly increased petition filings, consistent with the demonstrated trend.
