How does an attorney get paid in a workers’ compensation case?
This is a question that should be asked by all our clients. Like most topics in workers’ compensation, there is a simple answer, but also a more complicated one.
The simple answer is that attorneys can get paid as a portion of the settlement; the more in-depth answer is that there are other ways they can be paid as well. Let’s take a look.
#1: Contingency fee basis
Workers’ compensation attorneys in Georgia work on a contingency fee basis. This means that they don’t get paid unless the injured worker receives benefits. In other words, if they don’t get a settlement for you, they aren’t entitled to any attorney’s fees. They can’t present you with a bill for their services without a settlement. Furthermore, you should never be charged an upfront fee to hire an attorney in a workers’ compensation case. If an attorney requests this, there could be fraud going on and it needs to be reported immediately.
The Georgia legislature has passed a law, O.C.G.A. 34-9-108 (a), which statutorily sets the maximum amount that an attorney can receive in a workers’ compensation case at 25 percent of weekly benefits or a settlement. For example, if you engage the services of an attorney and they are able to obtain a settlement of $100,000, the injured worker would net $75,000 and their attorney would receive $25,000.
This figure is significantly less than what an attorney fee could be in a personal injury claim, which can vary between a third and one half of the total settlement. Additionally, the State Board of Workers’ Compensation has to approve all fees over $100. This provides protection to injured workers and doesn’t allow nefarious and unscrupulous people to try and scam the workers’ compensation system. It typically takes somewhere between 24 hours and 2 weeks for the State Board of Workers’ Compensation to review settlement agreements.
#2: Quantum meruit
A second way an attorney can obtain money in a workers’ compensation case is when a defense is determined by a judge to be without reasonable grounds. The attorney who is representing the injured worker can request quantum meruit (time spent) as a penalty. This means that an attorney can ask to be compensated for their time by the offending party if the judge determines that the defense of the claim was not justified and unreasonable. The hourly rate of the attorney should be spelled out in the contract. To be clear, the injured worker doesn’t have to pay the attorney the hourly rate on an ongoing basis. It does, however, provide the basis for what a reasonable hourly rate should be.
An example of this is when an injured worker gets hurt on the job and the employer and insurance company deny that the event happened, despite the presence of witnesses and the need for medical care. The injured worker has to obtain counsel to help them proceed with their claim. Discovery takes place and the sides go to court. The judge determines that the accident took place and the injured worker hasn’t been able to work since the date of the accident. The judge can award the attorney who assisted the injured worker fees for having to prove the case because the defense of the claim was unreasonable.
#3: Indemnity benefits
A third way an attorney can get paid in a workers’ compensation case is through a percentage of workers’ compensation indemnity benefits. Pursuant to the same statute mentioned above (34-9-108), if an attorney helps get benefits commenced, they can petition the court to receive 25 percent of indemnity benefits paid to the injured worker each week. The attorney must be able to demonstrate the work that was performed in order to get benefits started, or the court will deny the petition.
A prime example of this is when an injured worker contacts an attorney after they have seen an industrial clinic. That clinic has conveniently returned them to normal duty status and has not seriously taken into account their complaints of pain. At that point, the injured worker hires an attorney. The attorney works to find an authorized doctor who appropriately treats the worker’s symptoms. As a result of this treatment, the injured worker is taken out of work or placed on restrictions that the employer can’t accommodate. Benefits are commenced as a result of the attorney’s work. They can then file a petition with the court asking for 25 percent of indemnity benefits.
#4: Consent order
A final way that an attorney can get paid is through a consent order. When there is an issue in litigation, both parties can agree to resolve the matter via an agreement called a consent order. This order lays out the matters in dispute and also describes the negotiated resolution. This consent order has to be submitted to the State Board of Workers’ Compensation for approval, but it doesn’t have to settle the entire case. The consent order can contemplate attorney’s fees and define what the attorney will get.
This can occur when an insurance company and/or employer refuses to provide a panel of physicians to the attorney because they didn’t have one. The medical care is delayed as a result. The parties agree to a doctor via a consent order and the insurance carrier pays assessed attorney’s fees in the same order because of their failures. This expedites the process for the injured worker and removes the uncertainty of how much, if any, the State Board of Workers’ Compensation will award in assessed attorney’s fees.
If you have any other questions about how attorneys are paid or anything else related to a workers’ compensation case, please do not hesitate to contact the attorneys at Gerber & Holder.