How Fees Work in Workers' Comp.
Workers' Compensation is different from other areas of law, and this is also true for attorney's fees. Let's first go over two examples that are different from the way things usually work in Comp.:
For example, when a company is filing for a patent they may hire a patent attorney on a non-contingent, hourly basis. This is similar to how a psychiatrist may charge their fees: they get paid for every hour, even if you don't get better. In this example, the company will have to pay no matter the outcome.
As a different example, a car accident victim may hire a personal injury lawyer on a contingent basis, and agree to pay 40% of any recovery obtained after filing the lawsuit. In this case, the outcome matters. If there is no recovery, the lawyer would get 40% of nothing... which is still nothing. However, if the accident victim does win their case then they do have to pay their attorney's fee.
In Workers' Compensation a claimant can sometimes win their case, collect their principal recovery, and then have the other side pay their attorney's fee. Since the employee is technically "responsible" for paying their own attorney's fees these are properly called "recoverable fees," but in common practice I'm unaware of any firm which requires clients pay these fees out of pocket only to later recover them the E/C and reimburse the client what was paid. For convenience sake, these are called: "E/C-Paid Fees."
When are "E/C-Paid Fees" available?
The E/C is generally liable for an Employee's attorney's fees when they fail to benefits demanded in a Petition for Benefits ("PFB") before the 30th day after it was filed, and the Employee successful prosecutes their claim for the benefit (e.g. gets the benefit). See Fla. Stat. § 440.34.
When do Employee's have to pay fees out-of-pocket or out of their recovery?
Attorney's fees generally cannot be recovered from another party when benefits are provided a) before a PFB is filed, or b) less than 30-days after the PFB is filed.
This includes when a total / "washout" settlement is reached.
If a firm is able to obtain benefits within 30 days of filing a PFB, many will record that the fee owed (for example: a percentage of the cost of a surgery) and allow the employee to "settle-up" when the case is settled or a lump-sum of benefits is obtained. Since this practice varies from firm to firm, please review the contract of representation and discuss the matter when hiring an attorney.
When a potential client brings in a settlement offer that they have received, it is likely unfair for the lawyer to charge a percentage fee on what the claimant has essentially earned for themselves.
How this is handled is negotiable and depends on the case. In some cases, a simple flat-fee or hourly basis may make sense to review and negotiate the paperwork. Otherwise, the attorney and client may agree to a percentage fee based on any increases in the ultimate settlement value or other benefits obtained. In my experience, a reasonable degree of discovery and litigation can be well worth the effort and result in a substantially higher settlement than was initially offered to the unrepresented claimant.
This is an issue to discuss when considering an attorney.
Updated: June 7, 2018