As most respondent practitioners and carrier representatives are now aware, the Fee Bill, S2822/A3986, increases the maximum fee for petitioner’s attorneys to 25%. Scutari, a Certified Civil Trial Attorney and whose website also advertises for workers’ compensation cases, signed the bill on Thursday, August 22, in the absence of Governor Murphy. The bill became effective immediately and applies to all pending cases.
The immediate concern for respondents is how this increased fee might impact defense costs. Traditionally, petitioner attorney’s fees assessed by a judge on an Order Approving Settlement have been split, with petitioner paying 40% of the fee, an overall 8% of the award, and 60%, an overall 12.5% of the award, payable by respondent. In terms of dollars, on a $50,000 award the overall fee at 20% is $10,000, with petitioner’s share $4,000 and respondent share $6,000. Now, if this same apportionment is applied, a 25% fee is $12,500, with the dollar split $5000/$7,500, an increased cost of $1,500 to respondent. To put this in perspective, a $50,000 award at 2023 rates is 25% partial permanent disability. An award of 30% is $64,650 and 35% is $107,730. With respect to pending claims, it is clear that in many cases the reserves must be adjusted, which at least will result in delays in closing the claims.
Although the increased fee percentage has now been law since August 22, the Division of Workers’ Compensation has yet to weigh in as to how this change will be implemented. We do understand, however, that Director/Chief Judge Maria Del Valle-Koch will shortly issue a directive that should provide guidance going forward. This blog will be updated when the directive is released.
If you have any questions, comments or concerns about this topic or other issues related to your worker’s compensation needs, please feel free to contact any member of the workers’ compensation group here at Brown & Connery, LLP via email or call 856-854-8900. Also, please visit the Brown and Connery website at www.brownconnery.com to learn more about our legal services.
By: Alfred P. Vitarelli, Counsel at Brown & Connery, LLP