Workers' Compensation FAQs

Attorneys Fees for Workers' Compensation Claimants

When a worker is injured or develops an occupational disease at work and filing a claim for workers' compensation becomes appropriate, the worker may choose to retain an attorney to represent him or her. A lawyer with experience and knowledge in workers' compensation issues can be extremely helpful, especially if the particular case has complex facts or legal issues, or if the relationships among the claimant, employer, and/or workers' compensation insurance carrier become strained.

Fearing high legal fees, an injured employee may hesitate to hire an attorney for a workers' compensation matter, but in most states attorneys fees are payable from the workers' compensation benefit award or, in some states, if the worker has a reasonable claim, by the employer or insurer. Workers' compensation systems are governed by state laws and administered by state agencies and courts. Although the various state workers' compensation systems have similar features, there are differences in the statutory and regulatory provisions that control legal fees. It is extremely important that an injured worker discuss the attorneys fee provisions that govern in his or her state with an attorney up front before deciding whether to retain the lawyer.

Attorneys fees are heavily regulated in workers' compensation. In almost all states, the amount of attorneys fees awards must be approved by either the state workers' compensation agency, commission, or board; or by the court. Many states very specifically regulate fee amounts using fee schedules, minimums, or caps. Often legal fees may not exceed a particular percentage of recovered workers' compensation benefits awards - usually 15 to 20 percent - and some states set a maximum hourly rate. Where the agency or court has some discretion in setting a reasonable fee amount, it usually considers such factors as:

  • Complexity of the case, legally and factually

  • Size of award recovered and of settlement offers made

  • Standard fee rates in the local community for similar legal work

  • Experience and expertise of the particular lawyer

  • Existence and reasonableness of any fee agreement, which may or may not be enforceable

  • Reasonableness of hours worked and costs incurred, as reported by attorney

In states that allow for payment of legal fees by employers or insurers in addition to the regular workers' compensation benefit award, there is sometimes a good faith standard imposed. Accordingly, in these states the employer or insurer is usually only liable for the claimant's legal fees where there has been some sort of action taken in bad faith, such as a failure to carry adequate insurance, unreasonable delay of claim processing, wrongful denial of an obviously valid claim, inadequate investigation, or some other sort of negative behavior. In some other states, the employer or insurer may be liable for legal fees purely because the claimant was successful at hearing, even if there was no bad faith involved.

The provisions of state workers' compensation laws allowing for attorney fees to be deducted from past due awards or to be paid by employers or insurers are supported by good public policy. Attorneys are encouraged to represent workers with meritorious claims because they know there is a secure payment vehicle built into the system. Claimants with compensable injuries are encouraged to retain attorneys because claimants know the reasonableness of the legal fees will be overseen by the state authorities and that there is a system for payment. The presence of a claimant's attorney in the equation puts the claimant on a more level playing field with the employer and insurer. In some states, employers and insurers are discouraged from wrongful behavior by the possible threat of liability for claimants' legal fees.

On the downside, in some states there is no provision for attorneys fees if the claimant is unsuccessful in his or her workers' comp application. Also, if the application ends up in an appeal, it varies by state whether attorneys fees are recoverable for legal work on the appeal.

There are many more complex legal issues concerning attorneys fees for workers' compensation claims, varying by state. An attorney can educate you about the law in your state and in your particular circumstance.

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DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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