In a potentially far-reaching decision, an appeals court Wednesday struck down a state law that restricted a police officer from paying a law firm to help her pursue workers-compensation insurance benefits.
The 26-page decision by the 1st District Court of Appeal said it was unconstitutional for police officer Martha Miles and her union, the Fraternal Order of Police, to be prohibited from paying a retainer and hourly fees for legal representation in a workers-compensation dispute with the city of Edgewater and an insurance carrier.
Attorney's fees have long been a controversial issue in the workers-compensation system. State law has placed strict limits on the fees, which are awarded on a contingency basis depending on the amounts of benefits involved. Paying retainers and hourly fees has been barred.
A three-judge panel of the appeals court agreed with Miles that the restrictions violated her First Amendment rights.
"(We) conclude that, to the extent these statutes prohibit a workers' compensation claimant (or a claimant's union) from paying attorney's fees out of their own funds for purposes of litigating a workers' compensation claim, these statutes are unconstitutional, because they impermissibly infringe on a claimant's rights to free speech and to seek redress of grievances,'' said the decision, written by Judge Brad Thomas and joined by Chief Judge Clay Roberts and Judge James Wolf.
Business groups and their legislative allies contend that limiting litigation and attorney's fees are critical to holding down workers-compensation insurance rates. But plaintiffs' attorneys and labor groups argue that the limits in state law have helped tilt the system too far against injured workers.
Wednesday's ruling came as the Florida Supreme Court considers three other challenges to key parts of the workers-compensation system. One of those cases challenges the constitutionality of the limits on contingency fees, with critics saying the fee amounts are set so low that attorneys won't represent injured workers.
Workers-compensation disputes are handled outside of the regular civil-court system. Workers-compensation laws were designed, at least in part, to more quickly resolve disputes and get injured workers back on the job.
Lawmakers passed a major overhaul of the workers-compensation system in 2003, as Florida businesses faced some of the highest insurance rates in the country. The appeals court Wednesday acknowledged the concerns about workers-compensation litigation driving up insurance costs, but it said the state cannot constitutionally bar people from hiring attorneys outside of the contingency-fee structure.
"We recognize that the Legislature could intend to prevent the public harm caused when injured workers might quixotically seek benefits the worker is highly unlikely to obtain,'' the decision said. "In addition, the Legislature could rationally seek to disincentivize meritless litigation which disrupts the workplace and causes unnecessary hostility between employers and employees. But in a free society which attempts to allow individuals the intellectual prerogative to personally weigh the benefits and risk of exercising their statutory right to obtain redress for their injury, we hold that the rational intent to minimize workplace litigation cannot ultimately trump the benefits the public obtains by allowing an injured worker, or one who personally thinks she is injured, to seek redress under law. Thus, the public harm to be prevented --- undue depletion of workers' financial resources and undue disruption of the workplace --- does not prevail against the individual's right to contract for legal representation."
Miles, an Edgewater police officer, filed two petitions for workers-compensation benefits, including one that dealt with being exposed on the job to chemicals related to methamphetamine production, according to the appeals court. The city and insurer Preferred Governmental Claims Solutions disputed Miles' contention that her job caused the health problems.
After Miles dismissed the initial petitions, she and the Fraternal Order of Police signed agreements with the firm Bichler, Kelley, Oliver & Longo, PLLC for representation, Wednesday's decision said. The union agreed to pay a flat fee of $1,500 for the law firm to represent Miles, and she agreed to pay an hourly fee for representation beyond 15 hours.
An attorney for Miles in 2013 filed two petitions for benefits and in January 2014 sought approval from a judge of compensation claims for the retainer arrangements. In part, the attorney argued it would not be financially feasible to take the case on a contingency-fee basis because of the time involved in pursuing a case that involves a worker being exposed to hazardous substances.
The judge of compensation claims later rejected the agreements between the union, Miles and the law firm because they did not comply with the workers-compensation law, according to Wednesday's ruling. Miles' attorney then withdrew from the case, and the judge ultimately ruled against Miles on the petitions for benefits.
That led to Miles taking the case to the appeals court, which sent it back Wednesday for a new hearing on the retainer issues and the petitions for benefits.
"We conclude that the statutory restrictions are unconstitutional, and that the proper remedy is to allow an injured worker and an attorney to enter into a fee agreement approved by the JCC (judge of compensation claims), notwithstanding the statutory restrictions,'' the decision said.