Florida Patient's Compensation Fund v. Rowe

In Florida Patient's Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985), the Court first enunciated the factors to be utilized by a court in assessing "reasonable attorney fees." The Court noted the distinction between the "English Rule," that attorney fees are taxed to the losing party as part of costs, and the "'American Rule,' that attorney fees may be awarded by a court only when authorized by statute or agreement of the parties." Id. at 1148. The Court observed that "great concern had been focused on a perceived lack of objectivity and uniformity in court-determined reasonable attorney fees." Id. at 1149. Noting that it was "incumbent upon this Court to articulate specific guidelines to aid trial judges in the setting of attorney fees," the Court considered the federal lodestar approach to be a "suitable foundation for an objective structure" upon which to base an award. Id. at 1150. The Court considered whether section 768.56, Florida Statutes (1981), which provided attorney's fees for the prevailing party in medical malpractice cases, violated the Florida Constitution. The Court held it did not, explaining: "The assessment of attorney fees against an unsuccessful litigant imposes no more of a penalty than other costs of proceedings which are more commonly assessed. . . . The statute may encourage an initiating party to consider carefully the likelihood of success before bringing an action, and similarly encourage a defendant to evaluate the same factor in determining how to proceed once an action is filed. We reject the argument that section 768.56 so deters the pursuit of medical malpractice claims that it effectively denies access to the courts to either party in malpractice actions. We find that an award of attorneys fees to the prevailing party is "a matter of substantive law properly within the aegis of the legislature," in accordance with the long-standing American Rule adopted by this Court. See Whitten v. Progressive Cas. Ins. Co., 410 So. 2d 501, 504 (Fla. 1982). As difficult as the resulting application of this statute may be in certain cases, we conclude that section 768.56 is constitutional." (Id. at 1149.) As this passage makes clear, fee-shifting statutes generally do not deny access to courts. Id. The Court observed that the benefit of the contingent fee system is to provide a party with "increased access to the court system and the services of attorneys." 472 So. 2d at 1151. The Court recognized in Rowe that the availability of attorney's fees would have the effect of encouraging plaintiffs to bring meritorious claims that would not otherwise be economically feasible to bring on a noncontingent fee basis. Rowe, 472 So. 2d at 1149. In calculating "reasonable fees," the trial court must determine the number of hours reasonably expended by the attorney and a reasonable hourly rate for those services, then multiply the two to arrive at the "lodestar" amount. Rowe, 472 So. 2d at 1150-51. The Rowe opinion further explained that the criteria set forth in Disciplinary Rule 2-106(b) of the Florida Bar Code of Professional Responsibility should be utilized to calculate the loadstar. 472 So. 2d at 1150. For example, the Court stated that "the novelty and difficulty of the question involved" should be considered in determining the number of hours reasonably expended on the litigation. Id. As to the second half of the lodestar equation--the hourly rate--we stated that the court should take into account all of the factors enumerated in the Florida Bar Code of Professional Responsibility "except the 'time and labor required,' the 'novelty and difficulty of the question involved,' the 'results obtained,' and 'whether the fee is fixed or contingent.'" Rowe, 472 So. 2d at 1150-51. In Rowe, the Court recognized the economic reality that attorneys who work on a contingent fee basis only receive compensation when they prevail, and thus must charge a higher fee than if they had been guaranteed an hourly rate. 472 So. 2d at 1151. In Rowe, the Court observed that at that time the Florida Legislature had enacted more than 70 statutes authorizing the courts to award attorney's fees in specific types of actions, see 472 So. 2d at 1148, and that Congress had enacted at least 75 federal statutory grants of authority as of 1977. Id. n.4.