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Saturday, October 6, 2012

Fear to File: Loser Pays Creates an Unjust Result in Florida

A Florida appeals court this week challenged the looser pays rule mandated by statute in workers' compensation cases. The Court declared:

"We are constrained to affirm the imposition of costs under section 440.34(3),
Florida Statutes. In our view, the result here, while correct under prevailing law,
raises important questions of public policy. We recognize that a statute providing
for the imposition of costs is not designed to penalize, but to make the prevailing
party whole. However, where the statute provides that an injured employee who
seeks workers’ compensation benefits in good faith, but does not prevail and must
then pay the employer’s costs, it is not unreasonable to argue, as Claimant does,
that the statute imposes a chilling effect on future employees with meritorious
claims. This is especially significant where a prevailing party’s opportunity to
recoup its attorney’s fees is limited by statute. Such employees may thereby
forego seeking benefits based on meritorious claims in order to avoid subjecting
themselves to an award of costs. "

Traditionally, the workers' compensation system provided a summary and remedial adjudication process for the claims of injured workers. While "Times Have Changed," and greater restrictions have been placed on the process to reduce employee's access to benefits, the imposition of a "looser pays" rule, defies both good conscience and equity, upon which the workers' compensation act was crafted. Under the looser pays rule everyone looses.