Opinion ID: 1644092
Heading Depth: 2
Heading Rank: 2

Heading: Statutory History of the Attorney Fee Award

Text: We have noted that [t]he Workmen's Compensation Act was originally passed as administrative legislation to be simple, expeditious, and inexpensive so that the injured employee, his family, or society generally, would be relieved of the economic stress resulting from work-connected injuries, and place the burden on the industry which caused the injury. Lee Eng'g, 209 So.2d at 456. The theory underlying the Act was that a claimant did not need an attorney and could alone navigate the procedures to obtain the benefits to which he or she was entitled under the law. Id. Thus, originally, when a claimant hired an attorney, the claimant's attorney fee was the obligation of the claimant. The Legislature, however, was concerned that the bulk of the compensation benefit go to the claimant, not his attorney. Accordingly, to protect a claimant's compensation award, the Legislature, from the original adoption of the Act, gave the JCC or relevant administrative body, however denominated at the time, approval oversight of the amount a claimant paid to his attorney. See ch. 17481, § 34, Laws of Fla. (1935). In 1941, the Legislature revised the statutory scheme and mandated that in some instances, the employer/carrier should pay for the claimant to have an attorney. See ch. 20672, § 11, Laws of Fla. (1941). The Legislature amended the statute to provide in pertinent part as follows: If the employer or carrier shall file notice of controversy provided in Section 20 of this Act, or shall decline to pay a claim on or before the 21st day after they have notice of same, or shall otherwise resist unsuccessfully the payment of compensation, and the injured person shall have employed an attorney at law in the successful prosecution of his claim, there shall, in addition to the award for compensation, be awarded [a] reasonable attorney's fee, to be approved by the Commission which may be paid direct to the attorney for the claimant in a lump sum. Id. (emphasis added). As the First District noted regarding a subsequent version of this provision, The legislative determination that a fee is payable by the employer/carrier in the circumstances enumerated in [this subsection] reflects a public policy decision that claimants are entitled to and are in need of counsel under those conditions. Pilon v. Okeelanta Corp., 574 So.2d 1200, 1201 (Fla. 1st DCA 1991); see Lockett v. Smith, 72 So.2d 817, 819 (Fla. 1954). Under the 1941 provision, a prevailing claimant's compensation award was not reduced at all because the claimant hired counsel, and the employer and carrier were discouraged from delaying timely payment of benefits owed. Thereafter, we determined the ethical rule governing attorney fees was a safe guide in fixing the amount of [employer/carrier-paid] fees awarded the claimant under the statute. Fla. Silica Sand Co. v. Parker, 118 So.2d 2, 4 (Fla.1960) (citing Canon 12 of the Rules of Ethics Governing Attorneys, now codified as rule 4-1.5 of the Rules Regulating the Florida Bar (Fees and Costs for Legal Services)). Subsequently, in Lee Engineering, we directly addressed the method for determining this reasonable attorney fee award under the statute. We rejected strict application of a contingent percentage of the benefit award, finding such to be inappropriate for this area of the law, and remanded for determination of a reasonable attorney fee by applying the factors in our rule. Lee Eng'g, 209 So.2d at 458-59. The Legislature later amended section 440.34(1) and incorporated these factors as follows: (1) If the employer or carrier shall file notice of controversy as provided in s. 440.20, or shall decline to pay a claim on or before the 21st day after they have notice of same, or shall otherwise resist unsuccessfully the payment of compensation, and the claimant injured person shall have employed an attorney at law in the successful prosecution of the claim, there shall, in addition to the award for compensation, be awarded a reasonable attorney's fee of 25 percent of the first $5,000 of the amount of the benefits secured, 20 percent of the next $5,000 of the amount of the benefits secured, and 15 percent of the remaining amount of the benefits secured, to be approved by the judge of industrial claims, which fee may be paid direct to the attorney for the claimant in a lump sum. However, the judge of industrial claims shall consider the following factors in each case and may increase or decrease the attorney's fee if in his judgment the circumstances of the particular case warrant such action: (a) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly. (b) The likelihood, if apparent to the claimant, that the acceptance of the particular employment will preclude employment of the lawyer by others or cause antagonisms with other clients. (c) The fee customarily charged in the locality for similar legal services. (d) The amount involved in the controversy and the benefits resulting to the claimant. (e) The time limitation imposed by the claimant or the circumstances. (f) The nature and length of the professional relationship with the claimant. (g) The experience, reputation, and ability of the lawyer or lawyers performing the services. (h) The contingency or certainty of a fee. Ch. 77-290, § 9, at 1293-94, Laws of Fla. (codified at § 440.34, Fla. Stat. (1977)) (additions underlined; deletions struck through). As evidenced by the above, the Legislature also provided a statutory formula to be used as the starting point for determining a reasonable attorney fee award for a successful claimant. Thus, to determine a reasonable fee, the JCC applied the formula and then increased or decreased the amount after consideration of the factors in order to determine a reasonable fee. Two years later, however, the Legislature again significantly amended the statute. See ch. 79-40, § 27, at 252-53; ch. 79-312, § 15, at 1656-57, Laws of Fla. As amended, the first two subsections provided in pertinent part as follows: (1) No fee, gratuity or other consideration shall be paid for services rendered for a claimant in connection with any proceedings arising under this chapter, unless approved as reasonable by the deputy commissioner, commission, or court having jurisdiction over such proceedings. Except as provided by this subsection, any attorney's fee approved by a deputy commissioner shall be equal to 25 percent of the first $5,000 of the amount of the benefits secured, 20 percent of the next $5,000 of the amount of benefits secured, and 15 percent of the remaining amount of the benefits secured. However, the deputy commissioner shall consider the following factors in each case and may increase or decrease the attorney's fee if in his judgment the circumstances of the particular case warrant such action: [the previously added Lee Engineering factors]. (2) If the claimant should prevail in any proceedings before a deputy commissioner, commission, or court there shall be taxed against the employer the reasonable costs of such proceedings, not to include the claimant's attorney's fees. A claimant shall be responsible for the payment of his own attorney's fees, except that a claimant shall be entitled to recover a reasonable attorney's fee from a carrier or employer: (a) Against whom he successfully asserts a claim for medical benefits only, if the claimant has not filed or is not entitled to file at such time a claim for disability, permanent impairment, wage-loss, or death benefits, arising out of the same accident; or (b) In cases where the deputy commissioner issues an order finding that a carrier has acted in bad faith with regard to handling an injured worker's claim and the injured worker has suffered economic loss. For the purposes of this paragraph, bad faith means conduct by the carrier in the handling of a claim which amounts to fraud, malice, oppression, or willful, wanton or reckless disregard of the rights of the claimant. Any determination of bad faith shall be made by the deputy commissioner through a separate fact-finding proceeding; or (c) In a proceeding where a carrier or employer denies that an injury occurred for which compensation benefits are payable, and the claimant prevails on the issue of compensability. § 440.34(1)-(2), Fla. Stat. (1979) (footnote omitted). Although both the fee formula and the Lee Engineering factors remained in subsection (1), the subsection no longer contained any direct reference to the award of employer/carrier-paid fees when the claimant prevailed over the employer/carrier's denial of compensation. The Legislature moved the provision for an employer/carrier-paid attorney fee award into subsection (2) and listed three specific instances that would trigger a claimant's entitlement to an attorney fee award to be paid by the employer/carrier. Nothing in subsection (2) referred directly to the formula or factors of subsection (1). In 1980, the provision for the employer/carrier-paid fee award was renumbered as subsection (3). See ch. 80-236, § 14, Laws of Fla.; § 440.34(3), Fla. Stat. (Supp.1980). The subsection providing for the award of a reasonable attorney fee was not again expressly linked to the formula and the reasonable fee factors of subsection (1) until 1986. Following the list of instances in which the award of a reasonable attorney fee was required in subsection (3), the Legislature added this sentence: In applying the factors set forth in subsection (1) to cases arising under paragraphs (a), (b), and (c) of this subsection, the deputy commissioner shall only consider such benefits and the time reasonably spent in obtaining them as were secured for the claimant within the scope of paragraphs (a), (b), and (c) of this subsection. Ch. 86-171, § 4, Laws of Fla. Although other changes were made to the statute over the ensuing years, the substantive changes most pertinent here were made in 2003. See ch. 2003-412, § 26, Laws of Fla. (effective Oct. 1, 2003). In subsection (1), the Legislature deleted reference to consideration of the reasonable fee factors and made other changes as shown below by bold type for additions and strike-through type for deletions. (1) A fee, gratuity, or other consideration may not be paid for services rendered for a claimant in connection with any proceedings arising under this chapter, unless approved as reasonable by the judge of compensation claims or court having jurisdiction over such proceedings. Except as provided by this subsection, Any attorney's fee approved by a judge of compensation claims for benefits secured on behalf of services rendered to a claimant must equal to 20 percent of the first $5,000 of the amount of the benefits secured, 15 percent of the next $5,000 of the amount of the benefits secured, 10 percent of the remaining amount of the benefits secured to be provided during the first 10 years after the date the claim is filed, and 5 percent of the benefits secured after 10 years. The judge of compensation claims shall not approve a compensation order, a joint stipulation for lump-sum settlement, a stipulation or agreement between a claimant and his or her attorney, or any other agreement related to benefits under this chapter that provides for an attorney's fee in excess of the amount permitted by this section. The judge of compensation claims is not required to approve any retainer agreement between the claimant and his or her attorney. The retainer agreement as to fees and costs may not be for compensation in excess of the amount allowed under this section. [Provision for consideration of the reasonableness factors deleted.] Id. The Legislature left subsection (3) largely intact, except that it deleted the sentence referring to application of the subsection (1) formula and reasonableness factors that it had added in 1986. Id.