Legal fees in workers compensation cases are governed by the Workers’ Compensation Act, and are the only fees that a lawyer can charge an injured employee. The Act provides that an injured worker’s attorney cannot charge legal fees unless the employee either prevails in his or her claim, or successfully defends against an insurance company‘s attempt to stop the payment of benefits to or on behalf on an injured worker. In both of these cases, the insurance company pays a fee set by the Workers’ Compensation Act.
Lawyers who represent injured workers are entitled to reimbursement for expenses incurred to represent the injured worker. These expenses include such items as medical records and reports, interpreters’ fees and deposition costs. The largest costs are generally associated with obtaining a doctor’s expert opinion on medical issues that are at the core of every case. The insurance company reimburses these costs if the employee prevails.
Lawyers are also entitled to collect a fee on any settlement that they negotiate for an injured worker. These fees are also governed by the Workers’ Compensation Act. A lawyer is allowed to collect a fee of up to 20% of the gross amount of a lump sum settlement. This fee must be reduced to 15% of the gross amount if the case settles before the insurance company’s responsibility for future medical payments is established by either agreement or Department order.
Under no circumstances is a lawyer allowed to charge fees for representing an injured worker in a workers’ compensation claim other than those defined by the Workers’ Compensation Act.
There may be other claims associated with an on-the-job injury such as Social Security Disability, Accidental Disability Retirement and claims for negligence and other theories of liability of third parties for the industrial accident that gives rise to a workers’ compensation claim. These agreements must be in writing and signed by the injured worker and the attorney in order to be enforceable. These agreements are not subject to the provisions of the Workers’ Compensation Act, but are governed by other legal standards and/or statutes.
Injured workers should never be reluctant about asking questions of fees. Issues associated with fees should always be addressed before an attorney is retained. Both parties must understand how the lawyer is to be paid, and how much he or she will be paid before the lawyer performs any work. There is absolutely no reason for an injured worker to retain counsel before the issues of fess are discussed and agreed upon.
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