TALLAHASSEE, Fla. – The Florida Supreme Court declared the state's scheme for handling injured workers unconstitutional in three cases earlier this year, one of them involving the city of St. Petersburg.
The result is a potential 20 percent increase in workers' comp insurance for Florida businesses.
In 2003, Florida has some of the highest rates for the insurance business buy to protect injured workers. Changes that year cut the cost by 60 percent.
But in three cases earlier this year, the Florida Supreme Court found the savings came at the expense of injured workers.
"It found unconstitutional 4.40 related to attorney's fees," Lori Lovgren, of the National Council on Compensation Insurance.
A hearing on what to do next brought out every major industry in the state. Most said the ruling hurts business.
"It advantages trial lawyers and disadvantages injured workers," Florida Chamber President Mark Wilson said.
A state-sanctioned, industry-run commission is recommending a 19.6 percent increase.
"We're here today because the law says rates can't be inadequate," Lovgren said.
But an expert hired by a pro-business, anti-lawyer group said the rates need to increase at least 35 percent to be legal, but if they do, consequences will be dire.
"The demand for employees will be dampened because the costs, employers cost of doing business will be higher," said Dr. Michael Helvacian, Ph.D., of the Florida Justice Reform Institute.
The higher the rate hike after this courts ruling, the more likely big business can force the legislature to do something.
Many on both sides believe the rate hike is the beginning of what will be the biggest issue for lawmakers next spring.
"What we want is for the system to provide medical care and decent benefits for workers at the time of their injury when this happens," said Rich Templin, FL AFL-CIO.
The council is recommending higher rates for everyone as early as October.
Higher rates would apply to not only new, but existing policies. The decision is the first major one by the state's new Insurance Commissioner.