Florida business groups are scrambling to fight back against a recent state Supreme Court ruling they say could cost business owners hundreds of millions of dollars.
The court struck down caps on attorneys’ fees in workers’ compensation insurance cases. WJCT business analyst John Burr breaks down the effects of that decision for News Director Jessica Palombo in this week’s Business Brief.
Lawyers who choose to represent employees in workers’ comp disputes are no longer limited in what they can earn. In the case in question, the attorney had made less than $2 an hour to fight for his client.
Business lobbyists are sounding the alarm about a resulting 17 percent proposed hike in workers’ compensation insurance premiums. Insurance companies are asking state regulators for the increase.
National Federation of Independent Business Florida Director Bill Herrle says the hike would cost businesses a combined total of more than $600 million.
“That’s just unsustainable for many independent business owners,” he told Florida Public Radio. “So NFIB is seeking answers that we can bring before the Legislature, and we are making known that this is a very dire threat to Florida’s economy.”
But at the same time, Jacksonville labor attorney Tad Delegal says the decision is good for workers. He himself does not take on workers’ comp cases, he says, but he’s familiar with the system.
“I think really what the court was doing in the recent decision was it said that the pendulum had swung so far to benefit employers that the system no longer worked,” he says. “Injured employees — if there was any dispute about whether they should be compensated — injured employees had no realistic alternative because no attorney could possibly afford to represent these people.”
Delegal notes that workers’ comp insurance rates had been dropping for years.
“It’ll be a shock to some employers, but I think that it’s a result of overreaching by the business lobbies, and I think that the Legislature needs to do a good job of trying to balance both sets of interests,” he says.
Burr says groups like the NFIB, Associated Industries of Florida and the Florida Chamber are likely hard at work crafting suggested legal tweaks to try to minimize the premium increase.
If the Florida Office of Insurance Regulation approves the rate hike, the new rates could take effect August 1. It plans to hold at least one public hearing this summer.