The New Workers’ Compensation Revolution: CASTELLANOS V. NEXT DOOR

Castellanos v. Next Door Company was a monumental decision in many ways.  Employees injured at work face an uphill battle. Insurance carriers have a slew of defenses at their disposal. The Workers’ Compensation insurer can utilize these defenses to delay authorizing medical treatment and lost wages on behalf of the injured worker.  Thus, an injured worker is faced with a choice.

1. The Injured worker can fight on his/her own, “pro se”, and attempt to navigate through a complicated legal system on his/her own OR
2. The injured worker has the right to hire an attorney to represent his/her rights under the Workers’ Compensation system and expedite the provision of medical and lost wage benefits. The Supreme Court in Castellanos truly understood this dilemma.  However, this was solely the first “threshold” issue. The main issue had to do with the way a Workers’ Compensation attorney was paid under the statute. The Legislature changed the statute in 2009 and created a presumption that the Florida Workers’ Compensation statute (law) was reasonable. They did away with any mention of reasonable fees. Effectively, here’s what the old law did:
   1. Statutory Fees are the only fees permissible under the Workers’ Compensation law in Florida.
   2. Claimants cannot choose to pay their attorney an hourly fee for legal services rendered.
   3. Claimants cannot enter into retainer agreements for any dollar amount other than the fee schedule contained in the law.

Why was the statutory fee schedule a problem?

The Castellanos case is the best example of why the old fee schedule presumption was such an issue and prevented Claimants’ access to court/attorneys. Mr. Castellanos’ attorney worked 107.20 hours in attempting to secure necessary medical treatment, lost wages, etc. to ensure he was victorious in his workers’ compensation claim.  His attorney-drafted motions, filed documents/pleadings, attended hearings, mediations, and the like.  However, he was entitled to merely $1.53 per hour, yes you read that right, $1.53 per hour for his work due to the statutory fee schedule.  He received a whopping $164.01 for 107.20 hours of legal work!

This award was ridiculously low and would deter attorneys from 1. practicing workers’ compensation law and 2. representing injured workers in workers’ compensation cases in the future. Something had to be done.  The workers’ compensation law has become a very difficult system to navigate.  The Workers’ Compensation law is complex and very different from a typical personal injury case.  The law requires a legal expert who is well versed in all matters related to workers’ compensation.

Supreme Court says no more fee caps

The Supreme Court in Castellanos ruled the statutory fee schedule presumption to be unconstitutional.  The court further explained that the Workers’ Compensation system was set up for the injured workers’ benefit. The system’s goals are to, “provide the quick and efficient delivery of disability and medical benefits to an injured worker.” Section 440.015 Fla. Stat (2009).  Attorney intervention is necessary to ensure the quick delivery of medical and lost wage benefits.  An attorney cannot file Petitions, draft pleadings and attend hearings without a reasonable fee to ensure the injured worker receives the best work product possible.

The Court held the fee cap to be unconstitutional and the Claimant should have the opportunity to present evidence that the fee schedule does not provide for a reasonable attorney’s fee.  This gives the attorney an opportunity to utilize all legal resources at their disposal. The Employer/Carrier’s game is to delay benefits and maximize their client’s bottom line.  However, this decision strikes a new and fair balance.  Attorneys for the injured workers’ will now be able to file multiple Petitions for Benefits, represent their clients at all legal hearings and file the necessary pleadings to defeat the employer/carrier’s defenses.  The injured worker does not have to worry about finding an advocate who will work for $1.00 an hour due to an arbitrary and archaic interpretation of attorney’s fees.

Where do we go from here?

The Castellanos decision finally places the onus on the employer/carrier to stop their delays.  It likewise provides the employee with:

1. Legal Representation of their choosing — No longer does an injured worker have to scramble to find an attorney willing to work for an attorney’s fee set at a figure which is below minimum wage.
2. A Zealous Advocate — One who need not worry about maximizing his/her client’s case because case costs would outweigh the attorney’s fee award.
3. Gives the Claimant an opportunity to present evidence that the attorney’s fee agreed upon is reasonable.

Here’s what the law after Castellanos becomes:

1. We start at the statutory fee schedule-20/15/10
2. The Injured worker HAS THE RIGHT TO PRESENT evidence that the statutory fee schedule is unreasonable, and that the agreed-upon fee or hourly fee presented is reasonable.
3. No longer can the fee schedule be the sole determinant of what is ultimately paid to the attorney for attorney’s fees.
4. The injured worker will have access to courts and counsel. Attorneys will take the complex, novel and difficult cases because of this monumental and historic ruling. The playing field is finally evened out.

Legislature reaction

In 2009 the Supreme Court ruled that a reasonable fee should be paid in Workers’ Compensation cases (found that the statute was ambiguous-Emma Murray). However, the Legislature amended the statute after that case was decided by deleting the confusing portion of the statute. The fee schedule was once again the law.  However, after the Castellanos decision, I don’t foresee the Legislature attempting to reset the law back to 20/15/10, in terms of attorney’s fees.  I do believe the Legislature will define what a reasonable attorney’s fee is beyond the judicial factors cited by case law.  It may be that a 25% or 30% fee cap may become the norm, similar to a personal injury case.

What we can do for you

LaBovick Law Group has a team of experienced Workers’ Compensation law attorneys who will fight for your rights under the Workers’ Compensation system. Our team will ensure you receive all benefits due and owing without unnecessary delay. Call us now to discuss your case! (561) 623-3681.