Attorney Fees and Incentives in Workers’ Compensation

Today’s post comes from guest author Charlie Domer, from The Domer Law Firm.

Abe Lincoln said it best “The matter of fees is important far beyond the mere question of bread and butter involved.  Properly attended to, justice is done to both lawyer and client. . . when you lack interest in the case, the job will very likely lack the skill and diligence in the performance.”

Three states have recently addressed the issue of attorney fees in workers’ compensation cases, most recently in Alabama, where an attorney fee cap of 15% on already-low benefits was found unconstitutional. It took a judge in Alabama who had been a carpenter for 15 years and then a lawyer before he took the bench, to recognize that an attorney fee cap at 15% of a $220 weekly Permanent Partial Disability benefit would not provide sufficient incentive for attorneys to be involved in workers’ compensation claims for Permanent Partial Disability in Alabama, depriving injured workers of their constitutional rights.  Judge Pat Ballard gave the legislature in Alabama four months to cure the deficiencies in the Alabama Code.

Judge Ballard found persuasive the Florida Supreme Courts reasoning in Castellanos v. Next Door Company where the Court indicated the inflexible nature of Florida attorney fee statute made that law unconstitutional.  He also agreed with the reasoning of the Utah Supreme Court, which found its workers’ compensation attorney fee caps unconstitutional.

An attorney’s determination to take a workers’ compensation case has to do with both the merits of the case and potential for recovery of attorney fees.  In Wisconsin attorneys are not paid on any portion of the medical expenses and fees are capped at 20% of the Temporary Total and Permanent Partial Disability benefits obtained for the injured worker.  In Permanent and Total Disability claims, fees are capped at ten years of benefits.  (Routinely benefits that are further offset by the injured worker’s receipt of Social Security Disability and Long Term Disability benefits.)  As Abe Lincoln indicated long ago, “When you feel you are working for something, you are sure to do your work faithfully, and well.”  (Notes to the Ohio State Law School Graduating Class of 1858.)