Florida Broke Its Workers Comp System, and Now It’s Paying the Price

worker compensation lawyerA proposed 19.6% increase in workers compensation insurance rates is being deliberated in Florida as state legislators listened to hours of testimony this August.

Many business interests, from Wal-Mart to home builders, testified that the hike would negatively affect their bottom line.

The hike stems from a Florida Supreme Court Ruling in April that determined that a limit on attorneys’ fees in workers’ compensation cases was unconstitutional — a ruling that has been highly criticized by business groups. They argue that they will now have to take on greater insurance costs.

The April case, known as Marvin Castellanos v. Next Door Company, involved a worker compensation lawyer being awarded what amounted to $1.53 an hour for working on a claim for benefits for an injured Miami worker.

According to Mark Wilson, the president and CEO of the Florida Chamber of Commerce, “The effect of the decision is to raise costs for no other reason than so plaintiff trial lawyers can raise fees.”

However, state worker compensation lawyers have a different perspective. Mark Touby, an attorney, says that the Supreme Court ruling was more about due process for injured workers, rather than a higher fee. He claimed that the real blame lay with insurance companies, who were not properly paying claims.

“The carriers are the ones making these decisions,” said Touby, who is the president of the group Florida Workers’ Advocates. “They wrongfully deny benefits. That’s what it’s about.”

For workers in dangerous fields, this subject isn’t just a hypothetical debate about lawyer’s fees or insurance premiums. In 2013 alone, 917,100 occupational illnesses and injuries occurred, resulting in an average of eight days of missed work per incident. Indeed, according to the Bureau of Labor Statistics, workers’ compensation costs represent about 1.6% of overall employer spending.

The decision about the hike in rates is likely setting the stage for a legislative battle in 2017 concerning the worker’s compensation system overall, which was overhauled in 2003. After the 2003 decision, insurance rates on workers comp insurance plummeted 60%, but also incited claims that the system was tilted in favor of insurers and businesses.

Around the country, workers compensation attorneys are closing watching the situation in Florida, which has so far proven to be a big victory for anyone injured on the job.