NJ Raises Workers' Comp Attorney Fee Cap to 25%

On August 22, 2024, Acting Governor Nicholas Scutari of New Jersey signed legislation to increase the attorney fee cap in workers' compensation cases from 20% to 25%. This change amends the existing statute R.S.34:15-64, which had remained unchanged since 1927.

The case for increased counsel fees

Long overdue legislation has been introduced in the NJ Assembly to increase workers' compensation counsel's fees for petitioner's/claimant's attorneys. The workers' compensation law field has historically been considered a legal specialty that needs to be improved in the quality of representation available to injured workers. It has hindered the ability of injured workers to seek adequate recoveries in the administrative law system.

Counsel Fee of $123,415 Deemed Excessive by the Appellate Division

The NJ Appellate Court reversed and remanded a claim where the Judge of Compensation awarded a counsel fee to the claimant’s attorney $123,415. The reviewing tribunal deemed the fees based on a permanency award, a motion for medical and temporary benefits, and a motion for enforcement inconsistent with the reasonable method in determining fees.

Court Has Discretion to Award Counsel Fee Based on Dependent's Life Expectancy

After awarding dependent benefits under N.J.S.A. 34:15-13 to the surviving spouse of a worker who succumbed to an occupational disease, the judge of compensation awarded counsel fees based on the spouse's expected lifetime – in accordance with a 1995 amendment to N.J.S.A. 34:15-13(j) which provided that compensation shall be paid to a surviving spouse "during the entire period of survivorship" – as determined from the table of mortality and life expectancy printed as Appendix I to the New Jersey Rules of Court.

NJ Gov Murphy Signs Law Increasing Workers' Compensation Counsel Fees

NJ Governor Phil Murphy has signed into law legislation that increases counsel fees in Workers' Compensation claims. The law requires the assessment of counsel fees on all offers and tenders made by an employer or insurance companies. The Act is effective immediately. 

Counsel fees are now to be determined in cases in which a workers’ compensation petitioner has received compensation from an insurance company or self-insured employer prior to any judgment or

NJ Gov. Phil Murphy

award. The reasonable attorney fee is to based upon the amount of the compensation received after the establishment of an attorney-client relationship (as memorialized in a written agreement), plus any amount of the judgment or award which is in excess of the previously received compensation. Under former law, in such cases involving insurance or self-insurance compensation, the attorney fee was based solely on any amount of a judgment or award that is in excess of the amount of previously received compensation.

NJ Legislature Sends Workers' Compensation Counsel Fee Bill to Governor

This bill would require, in cases in which a workers’ compensation petitioner has received compensation from an insurance company or self-insured employer prior to any judgment or award, that the reasonable attorney fee be based upon the amount of the compensation received after the establishment of an attorney-client relationship (as memorialized in a written agreement), plus any amount of the judgment or award which is in excess of the previously received compensation. Under current law, in such cases involving insurance or self-insurance compensation, the attorney fee is based solely on any amount of a judgment or award that is in excess of the amount of previously received compensation.

NJ Bar Association Seek Re-Nomination of Judges of Compensation and System Wide Procedural Improvements

The NJ State Bar Association is urging Gov. Chris Christie to reappoint qualified workers’ compensation judges who are eligible for tenure.

Read the letter to Gov. Christie here. (March 22, 2017)

The organization also offered proposals to the Division of Workers’ Compensation to promote efficiency in processing formal claims.

Read the letter to the Division of Workers' Compensation here. (March 22, 2017)

Lack of Enforceability of Fee Sharing Arrangments

A NJ Appellate Court ruled that an agreement to share fees between lawyers, not holding NJ Supreme Court Certification, was unenforceable without the informed consent of the client and written acknowledgement of the client and all participating attorneys.

“Viewing the facts in a light most favorable to plaintiffs, we accept LaPorta's representation that he informed the client that he would receive a referral fee for referring the client's case. Even so, plaintiffs concede that they failed to inform the client of Weiner & Mazzei's participation in the alleged fee-splitting arrangement, and failed to solicit the client's consent to Weiner & Mazzei's participation. Thus, there is no genuine dispute that plaintiffs failed to satisfy the requirements of R.P.C. 1.5(e)(2) by failing to fully notify the client regarding the parameters of the fee arrangement in this case. Likewise, there is no genuine dispute whether the client consented to the participation of 'all the lawyers involved[,]' as required by R.P.C. 1.5(e)(3).”

The Court cited R.P.C. 1.5(e) which sets forth the following requirements for the sharing of fees:

Except as otherwise provided by the Court Rules, a division of fee between lawyers who are not in the same firm may be made only if:

1. the division is in proportion to the services performed by each lawyer, or, by written agreement with the client, each lawyer assumes joint responsibility for the representation; and
2. the client is notified of the fee division; and
3. the client consents to the participation of all the lawyers involved; and
4. the total fee is reasonable.

WEINER & MAZZEI, P.C., and PHILLIP A. LAPORTA, ESQ., v. THE SATTIRAJU LAW FIRM, PC,, DOCKET NO. A–1079–14T3, (NJ App Div 2016) 2016 WL 2993123, Decided January 12, 2016.

Florida Appeallate Court Rules Attorney Fee Statute Unconstitutional

The Florida First District Court of Appeals has held counsel fee provisions in the Workers' Compensation Act to be unconstitutional, ,"We hold that the challenged provisions violate Claimant’s First Amendment guarantees of free speech, freedom of association, and right to petition for redress." Miles v City of Edgewater, Decided April 20, 2016, setting the stage for review by the Florida Supreme Court.

Today's guest post is authored by the Hon. David Langham, Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings and is shared from http://flojcc.blogspot.com. 

NJ Counsel Fee Threshold Raised to $44,000

In a Memorandum issued last week, the Director of the NJ Division of Workers' Compensation announced that the threshold for counsel fees would be raised to $44,000 effective January 1, 2014. The counsel fee threshold criteria is linked to the increase the the maximum weekly benefit that will also be raised in 2014 by 2%.

Should the counsel be assessed by the Court in excess of the threshold, Compensation Judges are then required to include in the record an affidavit of services rendered by the petitioner's attorney.

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OK's True Cost Control Feature

Counsel fees are a critical element to workers' compensation claims. David DePaolo's recent blog post highlights how counsel fees motivate some claim strategies in Oklahoma where a 30% fee prevails. Today's post was shared by WorkCompCentral and comes from daviddepaolo.blogspot.com

Most of the attention Oklahoma's reform is getting in the work comp world is about opt-out. But another minor provision of that law may be something more meaningful for traditional work comp systems to keep an eye on. Oklahoma for some time has had a "value added" provision on its books for attorney fees. In short, claimant attorneys fees are capped at 30%, but in the past that cap was available only if the employer admitted the claim, provided medical coverage and made a written settlement offer. Under Senate Bill 1062 all that is required now is that the employer make a written settlement offer, then the claimant attorney fee is capped at 30% of the difference between what the settlement offer is, and what the award actually ends up being. For instance, if an employer offers an injured worker a settlement of $10,000, the worker hires an attorney and obtains a $15,000 settlement, the claimant's attorney would only be entitled to attorney fees of up to 30% on the $5,000 difference between the two awards. Because the law in the past required admitting liability and providing medical services, many employers deferred making settlement offers, thus prolonging case adjudication, ergo expense. Since employers would have to admit the claim in order to invoke the cap on attorney fees, claimants' attorneys began adding additional body parts to increase the value of the case and make it more difficult for employers to admit the claim - employers were loath to admit to body parts that they...

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NJ Suggests Restrictions on Counsel Fees for CMS Claim Reimbursements

The New Jersey Division of Workers' Compensation set forth a policy statement defining the parameters for potential counsel fee recovery where The Centers for Medicare and Medicaid  (CMS) is reimbursed for claims conditional payments by consent versus a judicial Order.

Click here to read the memo.