DAR File No. 30811

Labor Commission, Adjudication

R602-2-4

Attorney Fees

NOTICE OF PROPOSED RULE

DAR File No.: 30811
Filed: 12/07/2007, 01:19
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule change is to increase the fees that applicant's attorneys can charge their clients in workers' compensation cases. The rule change also defines the fees and costs in these cases for which attorneys can claim reimbursement.

Summary of the rule or change:

The rule change allows applicant's attorneys to charge a larger percentage contingency fee against workers' compensation disability or survivors' benefits. Specifically, for legal services rendered in proceedings before the Commission, the percentage amounts are increased from 20% to 25% of the first $25,000 of such benefits; from 15% to 20% on the next $25,000 of benefits, and from 10% to 15% on any remaining balance of benefits. Likewise, the maximum fee that can be charged for such services is increased from $12,250 to $15,250. The rule change also allows a larger percentage contingency fee to be charged in proceedings before the Court of Appeals (increasing from 25% to 30%) and in proceedings before the Supreme Court (from 30% to 35%) and makes similar increases to the maximum fee that can be charged in those cases. Finally, the rule specifically identifies the expenses, fees, and costs for which an applicant's attorney may obtain reimbursement from his client.

State statutory or constitutional authorization for this rule:

Sections 34A-1-301 et seq. and 63-46b-1 et seq.

Anticipated cost or savings to:

the state budget:

Because the proposed rule does not change the amount of compensation an employer or insurance carrier must pay to an injured worker, the proposed change will have no impact on the state budget in its capacity as an employer. The commission does not anticipate that the proposed rule will have any impact on the commission's costs in administering the workers' compensation system.

local governments:

Because the proposed rule does not change the amount of compensation an employer or insurance carrier must pay to an injured worker, the proposed change will have no impact on local governments in their capacity as employers.

small businesses and persons other than businesses:

Because the proposed rule does not change the amount of compensation an employer or insurance carrier must pay to an injured worker, the proposed change will have no impact on small businesses in their capacity as employers.

Compliance costs for affected persons:

The individuals affected by the proposed rule change are those persons who hire an attorney to represent them in claiming workers' compensation benefits and who then receive an award of disability compensation. In such cases, the proposed rule will allow the successful attorney to charge a contingency fee based on a larger percentage of the disability award than would have been allowed under the former rule. While the dollar amount will vary from case to case, the amount will be higher in all cases. For example, an injured worker who is awarded disability compensation of $80,000 can be charged attorneys fees of $14,250 under the proposed rule, whereas the fee would have been limited to $11,712.50 under the former rule.

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

Businesses will not be affected by the increased applicants' attorneys' fees permitted by the proposed rule. The increased attorneys fees will be deducted from the insured workers' disability benefits and will not increase the gross amount of those awards. Sherrie Hayashi, Commissioner

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

Labor Commission
Adjudication
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY UT 84111-2316

Direct questions regarding this rule to:

Richard M. Lajeunesse at the above address, by phone at 801-536-7928, by FAX at 801-530-6333, or by Internet E-mail at rlajeunesse@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:

01/31/2008

This rule may become effective on:

02/07/2008

Authorized by:

Sherrie Hayashi, Commissioner

R602. Labor Commission, Adjudication.

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

R602-2-4. Attorney Fees.

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 July 1, 2007.

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 "benefits" includes only death or disability compensation and interest accrued thereon.

b. Benefits are "generated" 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%]25% of weekly benefits generated for the first [$24,275]$25,000, plus [15%]20% of the weekly benefits generated in excess of [$24,275]$25,000 but not exceeding [$48,550]$50,000, plus 10% of the weekly benefits generated in excess of [$48,550]$50,000, to a maximum of [$12,250]$15,250.

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%]30% 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 [$17,900]$22,000;

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%]35% 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 [$23,550]$27,000.

[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. The following expenses, fees and costs shall be presumed to be reasonable and necessary and therefore reimbursable in a workers compensation claim:

1. Medical records and opinion costs;

2. Deposition transcription costs;

3. Vocational and Medical Expert Witness fees;

4. Hearing transcription costs;

5. Appellate filing fees; and

6. Appellate briefing expenses.

F. Other reasonable expenses, fees and costs may be awarded as reimbursable as the Commission may in its discretion decides in a particular workers compensation claim.

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

 

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

Date of Enactment or Last Substantive Amendment: [July 24, 2007]2008

Notice of Continuation: August 15, 2007

Authorizing, and Implemented or Interpreted Law: 34A-1-301 et seq.; 63-46b-1 et seq.