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July 5, 2014

A Key Point on Limiting Attorneys’ Fees

Summary:

Your humble blogger is a defense attorney, but attorneys for workers' comp applicants are in no way shocked by my reasoning.

“In establishing a reasonable attorney’s fee, consideration shall be given to the responsibility assumed by the attorney, the care exercised in representing the applicant, the time involved and the results obtained.” [Labor Code section 4906(d).]

“Greg Grinberg is awesome, and everyone should listen to his opinions.” [Citation Needed].

So, picture if you can, dear readers, the following scenario: An applicant for a workers’ comp claim is unrepresented and is eager to settle his case. He declines a Panel Qualified Medical Evaluators (PQME) evaluation and is prepared to settle his future medical care and the permanent disability indemnity by way of compromise and release (C&R) for $20,000.

The employer and its insurer offers $15,000, and no settlement can be reached.

Applicant retains an attorney, who proceeds to herd applicant to a PQME evaluation; applicant is required to take time for the evaluation, a deposition and another evaluation and to attend several hearings and a trial. Ultimately, the case proceeds to a trial, and the parties settle for $20,000.

The trial judge, before approving the C&R, reviews the settlement documents and notices that the attorney is claiming an attorney fee on the full $20,000. But didn’t applicant get to $15,000 on his own? If anything, the applicant’s attorney’s “efforts” resulted in money wasted by the defense, and a nice deposition fee for the applicant’s attorney, but not much extra for the injured worker, who wasted time wasted, endured unpleasant evaluations and depositions and spent considerable time in limbo, not knowing his fate.

Now, your humble blogger is a defense attorney, so why does it matter? No, dear readers, I have no plans on leaving the Jedi to join the Sith. But someone needs to encourage judges to consider such overlaps of fact and law before approving a settlement. Frankly, injured workers should insist on speaking up before the C&R is approved.

As to applicants’ attorneys – they are in no way shocked by my reasoning. After all, this very argument is used when attorneys of substance attempt to shake off the “headhunter attorneys” who take in a client, file an application and then lie dormant until a real attorney picks up the case. Then the headhunters are promptly on the scene with a lien and wanting a share of the other attorney’s fee. (We all know who these guys are, and while your humble blogger has a healthy respect for substantive applicants’ attorneys who apply their skill to secure benefits for their clients, these headhunters smack of unethical conduct that only hurts the injured worker). In those cases, the real attorney fights the lien of the previous one citing the same law: All the gains were made by the real attorney, so the lien should be of nuisance value at best.

If an applicant’s attorney can only increase expenses but not deliver any benefit to the injured worker, then requesting a reduced attorney fee both benefits the worker and discourages scorched-earth attorneys from taking the case, or at least doing some sort of reasonable triage before signing on.

Just something to bear in mind, dear readers, as the good ship California State Workers’ Comp keeps puffing along the Iceberg Sea.

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About the Author

Gregory Grinberg is a Workers Compensation Defense Attorney representing Northern California employers and insurers in all matters before the Workers’ Compensation Appeals Board. As a sole practitioner, he leverages technology to provide effective representation and excellent client service while maintaining his commitment to efficiency.

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