No Penalty on Late Payment of Settlement Proceeds Where Claimant is Represented by Counsel
Section 440.20(7), Fla. Stat., provides for a 20% penalty on compensation benefits payable pursuant to an "award" when the compensation is not paid within 7 days after it becomes due. When an unrepresented claimant enters into a "washout" settlement agreement with the employer/carrier, he is entitled to the 20% penalty in the event of late payment of the settlement proceeds. But a claimant who has an attorney is not entitled to penalties for a similar late payment. See s.440.20(11)(c), Fla. Stat.
Does this unequal treatment of represented versus unrepresented claimants violate the Equal Protection clause of the Constitution? No, said the First District Court of Appeal in Lucas v. Englewood Community Hospital, decided on 8/23/2007. The statute bears "a rational relationship to a legitimate state interest." The Court reasoned that the legisislature could rationally have presumed that a represented claimant is in a better position to negotiate the terms of settlement - including when the settlement proceeds are due and what penalty might attach in the event of a late payment. The Court therefore affirmed the order of the JCC which had refused to award a penalty on the late payment of the claimant's $225,000 settlement.
