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| Changes in the weather... |
For the past 10 or so years the interests of payers have trumped those of beneficiaries, as laws across the nation limited benefits, and consequently services and fees.
That swing to the right was precipitated by an earlier swing to the left which caused a perception that escalating benefits were out of proportion to the risk payers were willing to accept.
Expansion, contraction - workers' compensation is like the weather with high pressure pushing the winds and temperatures one way, and low pressure the other. The changes in the weather were mostly the product of legislative actions.
These past couple of years have seen several constitutional challenges to various workers' compensation "reform" laws, some successful, some not.
What is remarkable is that "reform" is coming from state supreme courts, not legislative movements. State supreme courts have weighed in on work comp occasionally, but the wave of high court "reform" is, in my experience, unprecedented.
One of the constitutional targets that appears to be gaining steam are challenges to limits on fees attorneys can charge and collect in the representation of the injured.
Attorney fees were easy targets in reform laws. High rates of litigation are tied to high costs, and that litigation cost was perceived to be the product of lawyer attraction, so the theory was limit fees, limit litigation due to financial unattractiveness of the field.
Florida's Supreme Court just last month struck down the limitations on fees on the ground that the law violated due process since the restrictions left no means to secure a reasonable fee if the statutory formula yielded a grossly inadequate level of compensation for attorneys.
The Utah Supreme Court late Wednesday took a different tack on invalidating that state's fee restrictions: because the state's Constitution provides (as do most states) that the Utah Supreme Court has sole and plenary power over attorneys then any legislative control over lawyers violates the constitutional guarantee of separation of powers.
In other words, only the judicial branch can regulate attorneys, and their fees. Attempts by the legislative branch violate the separation of powers, the Utah Supreme Court concluded.
Frankly, this is a brilliant strategy that likely will find traction in many other jurisdictions.
Utah didn't have a maximum fee limitation until 1991. Then, the legislature implemented a law providing a fee of 25% for the first $25,000 of an award, 20% for the next $25,000 of the award, and 10% of amounts awarded in excess of $50,000, up to a maximum of $18,590.
After a lengthy unsuccessful battle to get the Utah Labor Commission to revise fee regulations, the Injured Workers' Association of Utah brought suit.
The St. George District Court rejected all of the association's constitutional arguments and granted summary judgment in favor of the state.
The association appealed this decision directly to the Supreme Court. On appeal, the association limited its arguments to an assertion that the fee restrictions violated principles of equal protection and the separation of powers doctrine.
Without addressing the equal protection argument the court said it has had plenary power to regulate the practice of law in Utah under that state's Constitution.
Accordingly, the court concluded that the legislative delegation of authority to the Labor Commission to create a fee schedule, as well as the fee schedule itself, were "unconstitutional encroachments upon the power of the judiciary to govern the practice of law."
The court went on to say that it would not adopt a fee schedule of its own making, as it found the Utah Rules of Professional Conduct adequately safeguarded injured workers by limiting attorneys to charging only "reasonable" fees for their services.
The court said it was not persuaded that having a fee schedule "actually protects injured workers," as there was "some evidence that there are now very few attorneys willing to represent injured workers in Utah and injured workers suffer as a result of being unable to obtain representation."
According to WorkCompCentral's research on the story, a vast majority of states have laws that place limitations on fees, and many use a percentage of recovery as a limit.
2016 is, indeed, shaping up to be the Constitutional Year in workers' compensation.
To read the Utah Supreme Court's decision in Workers' Association of Utah v. State, click here.
One of the constitutional targets that appears to be gaining steam are challenges to limits on fees attorneys can charge and collect in the representation of the injured.
Attorney fees were easy targets in reform laws. High rates of litigation are tied to high costs, and that litigation cost was perceived to be the product of lawyer attraction, so the theory was limit fees, limit litigation due to financial unattractiveness of the field.
Florida's Supreme Court just last month struck down the limitations on fees on the ground that the law violated due process since the restrictions left no means to secure a reasonable fee if the statutory formula yielded a grossly inadequate level of compensation for attorneys.
The Utah Supreme Court late Wednesday took a different tack on invalidating that state's fee restrictions: because the state's Constitution provides (as do most states) that the Utah Supreme Court has sole and plenary power over attorneys then any legislative control over lawyers violates the constitutional guarantee of separation of powers.
In other words, only the judicial branch can regulate attorneys, and their fees. Attempts by the legislative branch violate the separation of powers, the Utah Supreme Court concluded.
Frankly, this is a brilliant strategy that likely will find traction in many other jurisdictions.
Utah didn't have a maximum fee limitation until 1991. Then, the legislature implemented a law providing a fee of 25% for the first $25,000 of an award, 20% for the next $25,000 of the award, and 10% of amounts awarded in excess of $50,000, up to a maximum of $18,590.
After a lengthy unsuccessful battle to get the Utah Labor Commission to revise fee regulations, the Injured Workers' Association of Utah brought suit.
The St. George District Court rejected all of the association's constitutional arguments and granted summary judgment in favor of the state.
The association appealed this decision directly to the Supreme Court. On appeal, the association limited its arguments to an assertion that the fee restrictions violated principles of equal protection and the separation of powers doctrine.
Without addressing the equal protection argument the court said it has had plenary power to regulate the practice of law in Utah under that state's Constitution.
Accordingly, the court concluded that the legislative delegation of authority to the Labor Commission to create a fee schedule, as well as the fee schedule itself, were "unconstitutional encroachments upon the power of the judiciary to govern the practice of law."
The court went on to say that it would not adopt a fee schedule of its own making, as it found the Utah Rules of Professional Conduct adequately safeguarded injured workers by limiting attorneys to charging only "reasonable" fees for their services.
The court said it was not persuaded that having a fee schedule "actually protects injured workers," as there was "some evidence that there are now very few attorneys willing to represent injured workers in Utah and injured workers suffer as a result of being unable to obtain representation."
According to WorkCompCentral's research on the story, a vast majority of states have laws that place limitations on fees, and many use a percentage of recovery as a limit.
2016 is, indeed, shaping up to be the Constitutional Year in workers' compensation.
To read the Utah Supreme Court's decision in Workers' Association of Utah v. State, click here.
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