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Subject Number 046-943 Attorney's Fees

Board Bulletins and Subject Numbers

Date: May 17, 2017

Fees awarded by the Workers’ Compensation Board (Board) to claimant’s attorneys and licensed representatives are payable as a lien out of monetary awards pursuant to Workers’ Compensation Law (WCL) § 24, and Title 12 NYCRR 300.17. The Board, and all claimant’s attorneys and licensed representatives, are obligated to ensure that fee applications are properly completed and filed, and that claimants have input into the process, and are aware of the basis for any fee awarded.

This Subject Number will address the following relating to fee requests and awards:

Part One: Proposed Amendment to Regulation

The Board has submitted to the state register for public comment an amendment to 12 NYCRR 300.17. The public comment period shall expire on July 3, 2017, and public comments may be submitted at regulations@wcb.ny.gov. The proposed amendment proposes the following changes:

Part Two: Modifications to Form OC-400.1

Modifications to Form OC-400.1

Practical Considerations for Completing Revised Form OC-400.1

Attorneys and licensed representatives are required to follow the instructions that are found under each heading on Form OC-400.1, and complete every question on the form. Below are some special considerations for completing the revised Form OC-400.1:

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Part A

Part B

Part C

Part D

Part E

Per the warning language contained at the bottom of Form OC-400.1, any attorney or licensed representative who falsifies any information on the form shall be guilty of a crime and subject to substantial fines and imprisonment.

Part Three: Procedure for Awarding Attorney’s Fees

Pursuant to WCL § 24, all attorney fee requests must be approved by the Board. WCL § 24 vests in the Board broad discretion with regard to the approval of counsel fees (see Matter of Rodd v Coram Fire Dist., 12 AD3d 890 [2004]; Matter of Marchese v New York State Dept. of Correctional Servs., 293 AD2d 920 [2002].

12 NYCRR § 300.17(h) provides that "[n]o fee shall be awarded to a claimant's attorney or licensed representative unless the attorney or licensed representative has complied with the requirements of this section.” No fee shall be approved or fixed for an attorney or licensed representative who has failed to file and serve a Notice of Retainer and Appearance or Notice of Substitution as required by 12 NYCRR 300.17(a) and (b) (see 12 NYCRR 300.17[c]). No fee will be approved or fixed unless the form OC-400.1 is filed and completed in its entirety (see 12 NYCRR 300.17[d][1]). No fee in excess of $450 shall be awarded to a claimant’s attorney if Form OC-400.1 is not accurately completed (12 NYCRR 300.17[d][1], [h]).

A written fee application must contain an accurate description of the services rendered to the claimant (see Matter of Tenecela v Vrapo Construction, 146 AD3d 1217 [2017]; Matter of Shiqerukaj v Gotham Broad, LLC, 147 AD3d 1262 [2017]), and the dates and time spent on the services (see Matter of Fernandez v Royal Coach Lines, Inc., 146 AD3d 1220 [2017]; Matter of Curcio v Sherwood 370 Management LLC, 147 AD3d 1186 [2017]).

The regulations and case law require attorneys and licensed representatives to strictly abide by the procedures requiring fee applications in certain circumstances. Failure to follow the regulations will result in Board decisions that reduce or deny a fee application that is incomplete, untimely, or does not contain the claimant’s signature.

There is no specific methodology for the award of fees to a claimant’s attorney or licensed representative. Rather, the Board is required, in all cases, to determine the value of the legal services based upon "the nature and extent of the services, the actual time spent, the necessity therefor, the nature of the issues involved, the professional standing of counsel, and the results achieved (Matter of Jordan v Freeman, 40 AD2d 656 [1972]).” The overall value of the work performed and services rendered, along with the financial status of the claimant (how much money the claimant will receive after a fee is deducted), must be considered by the Board when approving a fee request.

The Appellate Division, Third Department recently concluded that the Board appropriately considered the services rendered by the firm, the number of hours spent and the hourly rate based on the hours spent and the approved fee, in awarding counsel fees (Matter of Jeffery v Frontier Cellular Verizon Wireless, 148 AD3d 1484 [2017]). The Appellate Division has endorsed a process whereby the Board is permitted to consider an hourly rate in determining an appropriate fee. The following may be considered in rendering a fee determination:

The following factors, set forth in Rule 1.5(a) of the Rules of Professional Conduct (22 NYCRR 1200.0), may also be considered:

Granting a fee that is solely based on the amount of the award is impermissible. Pursuant to 12 NYCRR 300.17(f), "[w]henever an award is made to the claimant who is represented by an attorney or a licensed representative with fee, and a fee is requested, the board in such case shall approve a fee in an amount commensurate with the services rendered and having due regard for the financial status of the claimant and whether the attorney or licensed representative engaged in dilatory tactics or failed to comply in a timely manner with board rules. In no case shall the fee be based solely on the amount of the award."

If the Board determines that the attorney's efforts did not in any way benefit the claimant in the claim for compensation benefits, it may refuse to approve a fee request (see Matter of Lopez v City of New York, 42 AD2d 654 [1973]). The representation in and of itself is not a benefit unless the claimant receives, or will receive, some economic benefit from the services (Matter of Marshall v Savannah Sausage Corp., 192 AD2d 954 [1993], lv denied, 82 NY2d 655 [1993]).

Rule 1.5(a) of the Rules of Professional Conduct prohibits a lawyer from charging or collecting an excessive fee. The Board is permitted to reduce an excessive attorney's fee if it is based upon "improperly inflated" or "exaggerated" claims of work performed on claimant's behalf (Matter of Kennedy v NYC Dept. of Corrections, 140 AD3d 1572 [2016]).

Based on the foregoing, attorneys and licensed representatives should be aware of the following general principles and factors when requesting attorney’s fees from the Board:

Part Four: Other Considerations Relating to Attorney’s Fees

Counsel fees, when approved by the Board, are a lien upon compensation awarded per WCL § 24. The definition of compensation includes “the money allowance payable to an employee or to his [or her] dependents as provided for in this chapter (WCL § 2[6]) (Matter of Shea v Icelandair, 63 AD3d 30 [2009]).”

Finally, the fee awarded at the time of a finding of permanency does not end the attorney’s obligation to his or her client. See Subject Number 046-548 entitled “Chair Announces Efforts to Promote Permanency Classifications” dated May 28, 2013, which states: “The fee represents not only the present moment of classification, but entails an obligation for future representation on issues that may arise, such as third-party actions, medical care, and allegations of change in classification or entitlement to benefits. (id.).”

Kenneth J. Munnelly
Chair