Monday, October 16, 2006

Commonwealth Court Holds WCJ Has Jurisdiction Over Attorney Fee Disputes Between Counsel When Prior Counsel's Fee Has Been Approved

In K. Hendricks v. WCAB (Phoenix Pipe & Tube), the Commonwealth Court held Pitt v. Workmen’s Compensation Appeal Board (McEachin), 636 A.2d 235 (Pa. Cmwlth. 1993), petition for allowance of appeal denied, 538 Pa. 661, 648 A.2d 792 (1994) does not stand for the proposition that the WCJ does not have the authority to decide a counsel fee dispute when both attorneys’ fee petitions have been properly submitted to a WCJ.

Attorney fee disputes arise when the Claimant changes attorneys for whatever reason. Because the prior attorney is receiving a continuing 20% counsel fee, there is no room for a fee to be paid to the new attorney. The Pitt case is typically cited by WCJs to refer attorney fee disputes to the local County Bar Association Fee Dispute Committee, and ultimately to the local Court of Common Pleas. This is still the procedure if the prior attorney has not received fee approval, or at least properly placed a fee agreement in the record in an open case.

The Hendricks case states where a 20% fee has been approved for a prior attorney, the fee can be changed after an analysis by the WCJ as to what fee is appropriate for prior and present counsel. The WCJ must balance the right of the Claimant to counsel of the Claimant’s choice against the humanitarian purposes of the Workers’ Compensation Act that are perpetuated by prior counsel receiving a reasonable fee. The Court stated a Claimant cannot be permitted to avoid paying legal fees by simply discharging the Claimant’s attorney.

WCJ’s now will look at fee disputes when the Claimant changes attorneys. A WCJ still may seek consultation from the local Bar Association Fee Dispute Committee, but if there is not a resolution, the WCJ will resolve the dispute.

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