DAR File No. 27492

Labor Commission, Adjudication

R602-2-4

Attorney Fees

NOTICE OF PROPOSED RULE

DAR File No.: 27492
Filed: 10/14/2004, 03:45
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of the proposed rule change is to reorganize, update, and clarify the provision for attorneys fees in workers' compensation cases.

Summary of the rule or change:

The amendment deletes the existing section and replaces it with a new section. The new section maintains the general provisions of the old section regarding attorney fee arrangements in workers' compensation cases, but increases the amount of such fees by approximately 5% to reflect benefit increases over the last 2 years. The new section also allows attorneys to charge by the hour for up to 4 hours.

State statutory or constitutional authorization for this rule:

Section 34A-1-301 et seq.

Anticipated cost or savings to:

the state budget:

This amendment does not affect the State in its capacity as an employer nor does it increase the state's cost of administering the workers' compensation system, consequently no costs or savings to the state budget are anticipated.

local governments:

This amendment does not affect local governments in their capacity as employers, consequently no costs or savings to local government budgets are anticipated.

other persons:

This will allow workers' compensation plaintiff's attorneys to charge a somewhat higher fee to clients. The increase is approximately 5% above previous attorney fee limits, but is offset by a similar increase in weekly benefits that injured workers are now receiving.

Compliance costs for affected persons:

The only compliance costs are the somewhat higher attorneys fees that injured workers may be required to pay. As noted, this increase is due to (and offset by) increases in benefits paid to injured workers over the last two years.

Comments by the department head on the fiscal impact the rule may have on businesses:

The attorneys fees subject to this rule are paid by the injured worker, not the employer. The change should therefore have no fiscal impact on businesses.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Direct questions regarding this rule to:

Alan Hennebold at the above address, by phone at 801-530-6937, by FAX at 801-530-6390, or by Internet E-mail at ahennebold@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/01/2004

This rule may become effective on:

12/02/2004

Authorized by:

R Lee Ellertson, Commissioner

RULE TEXT

R602. Labor Commission, Adjudication.

R602-2. Adjudication of Workers' Compensation and Occupational Disease Claims.

R602-2-4. Attorney Fees.

[Pursuant to Section 34A-1-309, the Commission adopts the following rule to regulate and fix reasonable fees for attorneys representing applicants before the Commission in all cases wherein such fees are awarded after January 1, 2002.

A. The concept of a contingency fee is recognized. A retainer in advance of a Commission approved fee is not allowed. Benefits are only deemed generated within the meaning of this rule when they are paid as a result of legal services rendered after an Appointment of Counsel form is signed by the applicant. A copy of this form must be filed with the Commission by the claimant's attorney.

B. By creating this rule, the commission does not intend that an applicant's attorney be paid a fee where the assistance the attorney renders involves only an incidental expenditure of time. For example, no attorney's fee shall be paid when compensation agreements are merely reviewed, simple documents are prepared, or an apparent dispute is quickly resolved as a result of oral or written communication.

C. "Benefits" within the meaning of this rule shall be limited to weekly death or disability compensation and accrued interest thereon paid to or on behalf of an applicant pursuant to the terms of Title 34A, Utah Code Annotated.

D. An attorney's fee deducted from the benefits generated shall be awarded for all legal services rendered through final Commission action with the following constraints:

1. 20% of weekly benefits generated for the first $20,500, plus 15% of the weekly benefits generated in excess of $20,500 but not exceeding $41,000, plus 10% of the weekly benefits generated in excess of $41,000.

2. In no case shall an attorney collect fees calculated on more than the first 312 weeks of any and all combinations of workers' compensation benefits.

3. Not withstanding the above, in no case shall the maximum fee exceed $10,352.

E. After either successfully prosecuting or defending an appeal following final Commission action, an increased attorney's fee shall be awarded amounting to:

1. 25% of the benefits in dispute before the Utah Court of Appeals, plus the amount awarded in part D of this rule, not to exceed $15,130.

2. 30% of the benefits in dispute before the Supreme Court, plus the amount awarded in part D of this rule, plus the amount awarded in part E.1 of this rule, not to exceed $19,900.

F. An attorney's fee shall be deducted from and paid out of the benefits generated and shall be paid directly to the applicant's attorney upon order of the Commission.

G. If a controversy over an attorney's fee develops, the Commission shall have the discretion, pursuant to Section 34A-1-309, and this rule, to award fees or otherwise resolve the dispute by Order delineating the Commission's findings along with the evidence and reasons supporting the decision.]A. Pursuant to Section 34A-1-309, the Commission adopts the following rule to regulate and fix reasonable fees for attorneys representing applicants in workers' compensation or occupational illness claims.

1. This rule applies to all fees awarded after January 1, 2005.

2. Fees awarded prior to the effective date of this rule are determined according to the prior version of this rule in effect on the date of the award.

B. Upon written agreement, when an attorney's services are limited to consultation, document preparation, document review, or review of settlement proposals, the attorney may charge the applicant an hourly fee of not more than $125 for time actually spent in providing such services, up to a maximum of four hours.

1. Commission approval is not required for attorneys fees charged under this subsection B. It is the applicant's responsibility to pay attorneys fees permitted by this subsection B.

2. In all other cases involving payment of applicants' attorneys fees which are not covered by this subsection B., the entire amount of such attorneys fees are subject to subsection C. or D. of this rule.

C. Except for legal services compensated under subsection B. of this rule, all legal services provided to applicants shall be compensated on a contingent fee basis.

1. For purposes of this subsection C., the following definitions and limitations apply:

a. The term Abenefits@ includes only death or disability compensation and interest accrued thereon.

b. Benefits are Agenerated@ when paid as a result of legal services rendered after an Appointment of Counsel form is signed by the applicant. A copy of this form must be filed with the Commission by the applicant's attorney.

c. In no case shall an attorney collect fees calculated on more than the first 312 weeks of any and all combinations of workers' compensation benefits.

2. Fees and costs authorized by this subsection shall be deducted from the applicant's benefits and paid directly to the attorney on order of the Commission. A retainer in advance of a Commission approved fee is not allowed.

3. Attorney fees for benefits generated by the attorney's services shall be computed as follows:

a. For all legal services rendered through final Commission action, the fee shall be 20% of weekly benefits generated for the first $21,500, plus 15% of the weekly benefits generated in excess of $21,500 but not exceeding $43,000, plus 10% of the weekly benefits generated in excess of $43,000, to a maximum of $10,850.

b. For legal services rendered in prosecuting or defending an appeal before the Utah Court of Appeals, an attorney's fee shall be awarded amounting to 25% of the benefits in dispute before the Court of Appeals. This amount shall be added to any attorney's fee awarded under subsection C.3.a. for benefits not in dispute before the Court of Appeals. The total amount of fees awarded under subsection C.3.a. and this subsection C.3.b. shall not exceed $15,850;

c. For legal services rendered in prosecuting or defending an appeal before the Utah Supreme Court, an attorney's fee shall be awarded amounting to 30% of the benefits in dispute before the Supreme Court. This amount shall be added to any attorney's fee awarded under subsection C.3.a. and subsection C.3.b. for benefits not in dispute before the Supreme Court. The total amount of fees awarded under subsection C.3.a, subsection C.3.b. and this subsection C.3.c shall not exceed $20,850.

4. In addition to attorneys fees authorized by this subsection, a prevailing applicant's attorney shall be awarded reasonable and necessary costs actually incurred in the prosecution of the applicant's claim, as determined by the ALJ.

D. In Amedical only@ cases in which awards of attorneys' fees are authorized by '34A-1-309(4), the amount of such fees and costs shall be computed according to the provisions of subsection C.

KEY: workers' compensation, administrative procedures, hearings, settlements

[January 2, ]2004

Notice of Continuation September 5, 2002

34A-1-301 et seq.

63-46b-1 et seq.

ADDITIONAL INFORMATION

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For questions regarding the content or application of this rule, please contact Alan Hennebold at the above address, by phone at 801-530-6937, by FAX at 801-530-6390, or by Internet E-mail at ahennebold@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.