This document provides general information and is not intended as legal advice. Circumstances vary, and different laws may apply. For personalized guidance, it’s advisable to consult with an attorney.
The regulations surrounding attorney fees in workers’ compensation cases have undergone changes over time. These changes are contingent upon the date of injury and the effective dates of the amendments, impacting the permissible amount of attorney fees. This information pertains to attorney fees applicable for injuries occurring between October 1, 1992, and September 30, 2013, as well as from October 1, 2013, to the present.
The majority of stipulations regarding attorney fee payments are outlined in Minnesota Statutes, section 176.081. Before pursuing a claim for attorney fees, it is essential for the attorney to have a signed retainer agreement with the employee. This agreement must specify the maximum fee that the attorney is entitled to charge.
For injuries occurring on or after October 1, 2013, the retainer agreement must include the following notice:
“The maximum fee allowed by law for legal services is 20% of the first $130,000 of compensation awarded to the employee, subject to a cumulative maximum fee of $26,000 for fees related to the same injury. The employee should be aware that they are under no legal or moral obligation to pay any fee for legal services exceeding the aforementioned maximum fee.”
Upon having a retainer agreement in place, the attorney can request the self-insured employer or insurer to deduct the attorney fees from the workers’ compensation benefits due to the employee. Each benefit check disbursed to the employee should specify the deducted amount. Within 12 months of the attorney’s request to withhold fees, a statement of attorney fees must be filed. The insurer is prohibited from disbursing the withheld fees to the attorney until a compensation judge reviews and orders their payment.
Attorney fees are only payable in cases of dispute between the employee and the self-insured employer or insurer. Here’s an illustrative scenario of a dispute and the corresponding payment of attorney fees:
- The self-insured employer or insurer asserts that the employee has a 5% permanent partial disability (PPD) and has timely compensated the employee accordingly.
- The employee contends that their PPD is 7%.
- The employee’s attorney requests a hearing, resulting in a judge determining a 7% PPD for the employee.
- Attorney fees are calculated based solely on the 2% PPD difference that was not previously compensated (7% – 5% = 2%).
Types of Attorney Fees in Workers’ Compensation Cases
In workers’ compensation claims, various issues and disputes may arise, necessitating legal representation. Different types of attorney fees can be incurred, all of which require approval from a compensation judge before payment.
1. Attorney Fees Deducted from Employee Benefits
Contingent Fees: This fee structure involves a percentage deduction from the compensation awarded to the employee for any disputed portion. The deducted amount is then paid to the attorney.
- For injuries between Oct. 1, 1992, and Sept. 30, 2013:
- 25% of the initial $4,000 of compensation awarded to the employee.
- 20% of the subsequent $60,000 of compensation awarded.
- A maximum fee of $13,000 for the injury.
- For injuries on or after Oct. 1, 2013:
- 20% of the first $130,000 of compensation.
- A cumulative maximum of $26,000.
These maximum fee structures are applicable unless a compensation judge permits an excess fee. For instance, Table 1 illustrates the attorney fees for a $50,000 lump-sum settlement in a disputed claim scenario.
Excess fees: While the contingent fee is typically considered sufficient compensation for the attorney’s services in securing benefits, there is provision for attorneys to request additional fees if they deem the standard amount inadequate. To receive these excess fees, the attorney must submit a Statement of Attorney Fees and Costs along with an Excess Fee Exhibit, outlining the reasons why they believe extra compensation is warranted to both the employee and the compensation judge.
2. Attorney fees not deducted from employee benefits:
Roraff attorney fees are specifically applicable to disputes concerning medical benefits. These fees are covered by the self-insured employer or insurer, not by the employee directly. They come into play in situations where the contingent fee doesn’t adequately compensate the attorney due to absence of monetary benefits under dispute, or when both monetary and medical benefits are contested and the contingent fee for monetary benefits falls short in compensating the attorney.
The calculation of Roraff fees involves applying the formula outlined in Table 1 to the total amount of medical benefits secured for the employee. In cases where a disputed medical benefit lacks a reasonably determinable dollar value, the fee equals either the attorney’s hourly fees for securing the benefit or $500, whichever is lower. However, before an attorney fee can be assessed, the Department of Labor and Industry must certify that efforts were made to resolve the medical dispute, unless litigation is already underway before a compensation judge.
Heaton attorney fees function similarly to Roraff fees, yet they pertain specifically to disputes regarding vocational rehabilitation benefits. Unlike Roraff fees, Heaton attorney fees are covered by the self-insured employer or insurer, rather than the employee. These fees come into play when there’s a lack of monetary benefits in dispute, or when both monetary and vocational rehabilitation benefits are contested, and the contingent fee on the monetary benefits doesn’t adequately compensate the attorney. The calculation of Heaton fees mirrors that of Roraff fees.
Under Minnesota Statutes, section 176.191, attorney fees are addressed in cases where the primary dispute involves determining liability among multiple employers or insurers for an admitted work injury. If disputed benefits are being paid pursuant to a temporary order, the self-insured employer or insurer found liable for the benefits covers the employee’s attorney fees. However, Minnesota Statutes, section 176.191(1), ensures that the attorney fee awarded remains reasonable.
Edquist fees are applicable to intervenor reimbursement amounts. These fees are set at 20% of the intervenor’s payable amount and are deducted from the intervenor’s payment, then awarded to the employee’s attorney. It’s important to note that Edquist fees are not drawn from the employee’s benefits, such as short-term disability benefits or no-fault insurance.
For injuries occurring between October 1, 1995, and September 30, 2013, self-insured employers or insurers are mandated to reimburse the employee 30% of attorney fees awarded exceeding $250 when they unsuccessfully dispute a claim. However, partial reimbursement isn’t applicable to Edquist fees. This reimbursement provision may sometimes be waived by the employee in settlement agreements. For injuries on or after October 1, 2013, this reimbursement extends to contingent attorney fees paid from the employee’s benefits but doesn’t cover fees paid directly by the employer or insurer to the employee’s attorney.
When a worker switches attorneys, the fee can be divided between them based on the benefits secured or the workload each attorney has handled. Whether the fees for the initial attorney are counted within the statutory limit varies depending on the injury’s date.