In a recent opinion, the Louisiana First Circuit addressed whether the workers’ compensation judge had properly amended the award of attorney fees following the injured employee’s acceptance of a settlement award. In this case, the court addressed the issue of the payment of attorney fees in a workers’ compensation case, and whether a signed contract for the payment of fees can be amended by the judge. The court here determined that the record supported the award of attorney fees as agreed to by the parties, the injured employee and her attorney.
The facts of the workers’ compensation claim demonstrated that Malaysia Brown worked for C&S Wholesale Grocers and suffered injuries in the course and scope of her employment. Ms. Brown hired Ms. Johnson-Griffin to represent her regarding her workers’ compensation claim, and she filed a disputed claim for compensation.
Before trial, Ms. Brown’s claim with C&S was settled, and a joint petition for the approval of a workers’ compensation compromise settlement was filed. Ms. Brown would receive a lump sum of $135,000 in full settlement of her claim from the accident, and with $125,000 of that sum “allocated to future medical treatment.” The settlement also stated that Ms. Brown would pay attorney fees to Ms. Johnson-Griffin for $27,000 from the settlement proceeds.
The workers’ compensation judge (WCJ) signed the order, approving the settlement, but reduced the attorney fees to $10,000 instead of the $27,000 amount that had been agreed upon between Ms. Brown and Ms. Johnson-Griffin. The judge stated that attorney fees cannot be taken out of money allocated for future medical costs. Ms. Johnson- Griffin appealed, arguing that the WCJ should not have altered the terms of the settlement agreement and the attorney/client contract.
On appeal, the court stated the rule that attorney fees for rendering services in a workers’ compensation controversy are limited to 20 percent of the recovered amount. These fees must be approved by the WCJ and paid from the amount that was awarded to the plaintiff. Determining the amount of attorney fees requires looking at the attorney’s time, skill, and effort.
The Louisiana Rules of Professional Conduct set forth certain factors to determine whether a fee is reasonable, including the amount of time and labor involved, as well as the results obtained and the length of the professional relationship between the attorney and the client.
In this case, the court stated that the ECJ’s decision to award $10,000 in attorney fees was an abuse of discretion. A signed contract had been executed by Ms. Brown, employing Ms. Johnson-Griffin as her attorney in this workers’ compensation claim. Ms. Brown had agreed to pay fees in the amount of 20% of the recovery. Here, the sum of $27,000 had been agreed upon as attorney fees by Ms. Brown, and it was in fact 20% of $135,000 – the total monies received in the workers’ compensation dispute. Ms. Brown had also signed an affidavit that stated she read the joint petition and acknowledged the allegations as true. She also accepted the settlement, finding it in her best interest to do so.
The appellate court also stated that the WCJ had not considered Ms. Johnson-Griffin’s time, skill, or effort as set forth in the Louisiana Rules of Professional Conduct, Rule 1.5. The court here stated that they could not find statutory authority stating that an attorney cannot be paid fees for services from funds allocated to or awarded for future medical expenses. In fact, the court made clear the only restriction is that attorney fees cannot exceed 20% of the amount recovered. Since Ms. Brown recovered a lump sum of $135,000, she was contractually bound to pay her attorney, Ms. Johnson-Griffin, 20% of that sum in exchange for legal services.
Since the record supported the award of $27,000 in attorney fees, as agreed to by the parties, the appellate court amended the WCJ’s award of fees for $10,000.
At Lavis Law, individuals injured in the course and scope of their employment can gain a better understanding of their rights under Louisiana workers’ compensation law. Our office helps injured workers and their families pursue compensation for work-related injuries. Contact our office for a free consultation at 866-855-9151.
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