By Michael C. Crumpler, Partner, Jacksonville

There is a new paradigm for handling Florida workers’ compensation cases. The Florida Supreme Court’s recent decision in Castellanos v. Next Door Company, et al. (Opinion filed on April 28, 2016) drastically changed the legal landscape for evaluating workers’ compensation cases.

French critic and journalist Alphonse Karr once said, “the more things change, the more they stay the same.” In this practitioner’s opinion, evaluating and defending workers’ compensation cases has reverted back to when I first started practicing in 1990. 

Now, the skilled defense attorney has to consider a new set of factors in order to determine the financial and economic impact of the file. No longer can adjusters and defense counsel “stick their heads in the sand” when valuing claims. They must consider both the short term and the long-term impact of carrier-paid attorney’s fees upon the financial outcome of the file. 

Given the Supreme Court’s recent decision, carriers have been thrust back to the days when a small, but uncertain exposure for benefits can turn the strongest defenses into a costly financial claims endeavor. Back in the day and more recently after Castellanos, if your defenses at final hearing failed for one issue out of four, your exposure for attorney’s fees may equal if not exceed the settlement value of the entire file.  Practically speaking, the carrier and defense must now evaluate the settlement of the issues or case in terms of the value of the benefit possibly available, where failing to prevail on a small issue may cost your client more in attorney’s fees than the entire case could be settled for at mediation. 

Furthermore, the carrier and the defense should discuss early on the legal and practical impact that a separate side fee will have on those benefits that have been denied, but not yet litigated before the JCC. This is especially true in cases where the claimant’s attorney is demanding to settle his side fee before even considering whether to settle his client’s entire case. Be aware of the benefits and disadvantages to paying a side stipulation for benefits and fees prior to a settlement.   Metaphorically speaking, sometimes applying a little “grease” to the wheel will help you to turn the wheel later on. 

These are not easy issues to address when juxtaposed against the backdrop of a litigious and skilled claimant’s attorney. Make it your business to know which claimant’s attorneys are first and foremost “attorney fee shoppers,” and which attorneys place their client’s interests first in terms of resolution of the issues.  Do your best to be aware of the consequences of each kind of claimant’s attorney you are dealing with in the litigation process.  Know their hourly rates and their propensity to build their hours so as to inflate the true value of their time and efforts to obtain attorney’s fees. 

If you truly desire to close a file quickly, do everything within reason to pay the smallest amount of “ransom” on the way to resolving the entire file. Be prepared to pay the price, and know that personal feelings should not be placed ahead of the goals for resolving the file.

When the facts and the law call for compromise, consider stipulated agreements to pay separate side fees and costs to stop the clock from running on the attorney’s fees. The claimant’s attorney may be more reasonable later down the road when they know they have already secured a fee, and may not be getting paid to be obstinate, and refuse to accept otherwise reasonable attorney fee settlement offers from the E/C. 

By all means resolve weaker defenses that will not hold up in court in order to stop the attorney fee clock from running on the legal issues that will not survive judicial scrutiny. This will put you in better stead with the JCC when it comes to final hearing time, where the JCC only has to look at a finite number of issues with reasonable defenses. The JCC will know that you made the effort to resolve the issues and the fees at the same time, and possibly see through the claimant’s attorney’s justification for refusing to reasonably resolve the remaining legal issues before trial.

There is little doubt that some attorney’s fee issues will not get resolved and you will end up in front of the JCC. Be reasonable and fair, because the JCC will see through any effort you and your attorney fee expert make to “game the system.”  Unreasonable legal and factual arguments in the fee hearings will wind up on the same trash heap as your unreasonable and unfair claims and defenses did at final hearing.  Pick your battles carefully.

Good luck in quickly acclimating to new chapter in the long history of our state’s workers’ compensation system.