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Construction Up, Injuries Up, but Workers' Comp Payouts Down
Jessica M. Walker
Daily Business Review
10-20-2005

In his mid-teens, Hector Noriega moved from Mexico to Miami to find work in South Florida's booming construction industry. The immigrant followed his two brothers, who previously had found construction work there.

In August of last year, while he was pouring concrete at a residential construction site on Key Biscayne, the teenager was seriously injured when he came into contact with an electrical line. He survived the accident but suffered severe burns.

His attorney, Judson Cohen of Cohen Law Offices in Miami, said Noriega might lose his leg from the accident. No longer employable, Noriega, now 16, is living with family in Miami.

Most workers in Florida would have filed a workers' compensation claim, collected a payout, and that would have been the end of it. Noriega, however, is an undocumented alien and was not listed on the workers' comp policy of the subcontractor, C&C Concrete Pumping, or the Miami-based general contractor, Mackle Construction Co.

Ironically, Noriega's illegal status may allow him to proceed with a negligence lawsuit in Miami-Dade Circuit Court when a U.S. citizen or other legal worker generally could not. That could allow him to recover more than he could through a workers' comp claim. There are a growing number of undocumented workers like Noriega laboring in the South Florida construction industry, and experts say the legal situation could arise more often.

As South Florida's construction boom continues, more workers are pouring into the area in search of work. For both legal and illegal workers, the ability to recover damages for on-the-job injuries has been constrained due to a sweeping 2003 revision in the state's workers' comp law that was pushed through by business and insurance groups to curb workers' comp costs, experts say.

Steven Field, a retired University of South Florida professor who formerly directed the Florida Association of Occupational and Environmental Medicine, said he's seen a rising number of construction-related injuries over the past eight years in Florida. But despite the increase, workers' comp payouts are declining.

The total amount of workers' comp claims payouts reported to the state Department of Financial Services fell in Miami-Dade County from $5.9 million in 2002 to $2.8 million in 2004. In Broward County, payouts declined from $4.2 million in 2002 to $2.3 million in 2004. In Palm Beach County, they fell from $4.2 million in 2002 to $2.1 million in 2004.

Michael Haggard, a plaintiffs attorney who is a partner at Haggard Parks Haggard & Lewis in Coral Gables, said, "You're seeing more accidents but not more lawsuits because of the changes in the workers' comp law."

Field said the construction industry has little oversight when it comes to safety. "You see situations were no safety precautions are taken," he said. The federal Occupational Safety and Health Administration, which is supposed to enforce job safety rules, "has no standing with construction industry."

The Builders Association of South Florida didn't return phone calls for comment. Associated Industries of Florida's lawyer-lobbyist, Mary Ann Stiles, said the changes in workers' comp and construction liability law leveled the playing field for the industry. "You're seeing the same suits, you just can't pull all that crap that they used to pull," she said. "I think the law is a good balance. Finally we're equal to the plaintiffs."

TOUGHER TO SUE

In 1935, the Florida Legislature established the state workers' compensation system to provide workers with a prompt means of collecting benefits to compensate them for losses associated with on-the-job injuries. At the same time, however, the system insulated employers from being sued. Families cannot sue even when workers are killed on the job -- unless the employer deliberately set out to hurt the workers or place them at risk.

Before the 2003 revisions in workers' comp law, construction workers injured on the job had more leeway to sue contractors and subcontractors. A worker was limited to workers' compensation in relation to his direct employer's liability but was not barred from suing other subcontractors on the site.

In 2003, Gov. Jeb Bush and legislative Republican leaders pushed through sweeping changes. Among other things, the new law extended workers' comp protection to subcontractors working for the contractor. Co-subcontractors, however, remain vulnerable to lawsuits filed by employees of other subcontractors.

A further deterrent to workers' comp claims was tough new limits on attorney fees, which proponents acknowledged were to discourage lawyers from taking on workers' compensation cases.

Prior to 2003, there was a contingency fee schedule determining the payment for claimants' attorneys. Workers' compensation judges had discretion to determine attorney fees based on the complexity of the case. But the new law took away that discretion. The bill restricted hourly attorney fees for medical-only disputes to $150 hourly and established a $1,500 fee cap per accident.

The 2003 law also raised the bar for workers filing a negligence suit against their employers. Before then, a plaintiff could sue based on gross negligence or willful and wanton conduct. But the new law allows suits only if a plaintiff can show either that the employer intended to harm the employee, or that the employer knew -- based on prior similar incidents or an explicit warning â€â€