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California: Calculating the Attorney’s Fee

May 01, 2013 (10 min read)
Attention Lexis Online Subscribers: Citations link to lexis.com. Bracketed citations link to Lexis Advance.
Several recent panel decisions have dealt with the issue of calculation of attorney’s fees. In some cases, the WCAB has awarded higher fees than the WCJ. In other cases, the WCAB has drastically cut the WCJ’s awarded fee.
I. Criteria for Calculating Attorney’s Fees:
In the case of Stephens v. Patten Energy Enterprises, Inc., 2012 Cal. Wrk. Comp. P.D. LEXIS 668 [2012 Cal. Wrk. Comp. P.D. LEXIS 668], the WCAB referenced three separate citations dealing with the calculation of an attorney’s fee:
1. LC § 4906(d) [4906] provides: “In establishing a reasonable attorney's fee, consideration shall be given to the responsibility assumed by the attorney, the care exercised in representing the applicant, the time involved, and the results obtained.”
2. 8 CCR §10775 [10775]: “In establishing a reasonable attorney's fee, the workers' compensation judge or arbitrator shall consider the (a) responsibility assumed by the attorney, (b) care exercised in representing the applicant, (c) time involved, (d) results obtained.”
3. DWC/WCAB Policy and Procedural Manual Section 1.140 which can be found at:
The DWC/WCAB Policy and Procedural Manual contains a mini law review-type article on this issue. First, Section 1.140 explains that it is the WCAB policy to encourage high quality legal representation, which therefore necessitates that attorneys who represent injured workers be adequately compensated.
Next the section sets forth how to determine adequate compensation. Generally, a fee of 9 to 12 percent of the permanent disability is considered appropriate. However, “In cases of above average complexity, a fee in excess of the normal upper limit of 12 percent…is warranted.” The section then goes on to give examples of what might be included in these types of cases as follows:
  • “cases establishing a new or obscure theory of injury or law;
  • cases involving highly disputed factual issues, where detailed investigation, interrogation of prospective witnesses, and participation in lengthy hearings are involved;
  • cases involving highly disputed medical issues;
  • cases involving multiple defendants.”
Section 1.140 also suggests that the criteria set forth in the cases of Bentley v. IAC, (1946) 11 Cal. Comp. Cases 204 [11 Cal. Comp. Cases 204], and Rose, Klein & Marias v. WCAB, (1974) 39 Cal. Comp. Cases 771 [39 Cal. Comp. Cases 771], should be referenced when attempting to determine what constitutes an adequate attorney’s fee.
In the case of Bentley v. IAC, (1946) 11 Cal. Comp. Cases 204 [11 Cal. Comp. Cases 204] (and later in the case of Rose, Klein & Marias v. WCAB, (1974) 39 Cal. Comp. Cases 771 [39 Cal. Comp. Cases 771]), the 2nd District Court of Appeal (DCA) noted, “It is the privilege of attorneys to supplement the facts developed in the course of the proceedings by other evidence as to the extent and value of the legal services. If they offer no additional evidence, they are entitled to have their services carefully appraised by the referee in the light of the facts which are known to him. They are entitled to have a fee fixed from a consideration of all the factors which we have mentioned. It should not be necessary, except in unusual cases, for an attorney to offer evidence as to the value of his services, but he should in all cases have the assurance that his fee will be fixed in accordance with standard practices and that it will not be for a lesser amount than is customarily awarded for comparable services.”
II. Calculation Should Be Based on PD, Including the Life Pension:
In the noteworthy panel decision of Stephens v. Patten Energy Enterprises, Inc., 2012 Cal. Wrk. Comp. P.D. LEXIS 668 [2012 Cal. Wrk. Comp. P.D. LEXIS 668], the WCJ followed the above criteria set forth by the DCA and the WCAB. The WCJ noted that the case was of above average complexity and therefore an award of 15% of the 83% permanent disability (PD) was warranted. Since the PD award exceeded 70%, the injured worker was entitled to a life pension. And no attorney’s fee was awarded from this life pension.
In his Report and Recommendation, the WCJ explained his rationale for the attorney’s fee award and reiterated that he believed a fee of 15% of the PD in the amount of $16,035 was an adequate fee given the criteria required to be imposed in such a calculation.
The WCAB disagreed and reversed the award, holding, “We believe applicant’s attorney is entitled to a reasonable fee calculated upon the full amount of the benefits he was able to obtain on applicant’s behalf. Based upon the standard cited by the WCJ, to encourage representation by competent attorneys, applicant’s attorney should be awarded a fee that reflects the efforts he made and that rewards him for the results he obtained, including the value of the life pension.” (Emphasis added.)
III. Calculating LC § 5801 Attorney’s Fees (Based on Frivolous Writ):
Attorneys should proceed with caution, however, in requesting an increased award of attorney’s fee. The WCAB has always maintained that if an increased fee is requested, the attorney must provide an adequate basis and evidence for that increase. Providing adequate evidence is especially important when requesting LC §5801 [5801] fees.
LC §5801 provides in part, “In the event the injured employee… prevails in any petition by the employer for a writ of review… and the reviewing court finds that there is no reasonable basis for the petition, it shall remand the cause to the appeals board for the purpose of making a supplemental award… (of) a reasonable attorney's fee for services rendered in connection with the petition for writ of review.”
In the recent panel decision of Mota v. Allgreen Landscape, (2013) 2013 Cal. Wrk. Comp. P.D. LEXIS 24 [2013 Cal. Wrk. Comp. P.D. LEXIS 24], the WCAB awarded a LC §5801 fee in the amount of $2,500 plus costs of $104.67. The applicants’ attorneys in this case had originally requested a fee of $51,900. In response, the WCAB issued a Notice of Intent to award a much lesser fee, explaining that they “were unaware of any case in which anything approaching 100 hours of attorney time has been allowed in any section 5801 fee case.” (See Mota v. Allgreen Landscape, (2012) 2012 Cal. Wrk. Comp. P.D. LEXIS 526 [2012 Cal. Wrk. Comp. P.D. LEXIS 526].) In this opinion, the WCAB set forth an extensive history of state and federal case law on this issue. This is an excellent case to review as a checklist for what to do, and more importantly, what not to do when requesting LC §5801 fees.
IV. Recent LC §5801 Awards:
The following recent panel decisions set forth examples of the normal process for and award of LC §5801 attorney’s fees:
V. Conclusion:
Attorney’s fees must be calculated based on the criteria set forth in the Labor Code, the regulations and the DWC/WCAB Policy and Procedural Manual. Most fees will be calculated based on a percentage of the injured worker’s PD, including a life pension. However, where LC §5801 fees are concerned, if an attorney is requesting more than $2,500, adequate evidence must be presented to establish a higher fee.
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