N.J. Workers' Comp Attorney Fees Increase to 25%

The acting governor of New Jersey recently signed S2822, which increases attorney fees on workers’ compensation cases to 25%. Since 1927, the fee for an attorney on a workers’ compensation case was up to 20%.

The Bill

The bill increased the capped amount of attorneys’ fees in workers’ compensation cases and N.J.S.A. 34:15-64 now reads: “The official conducting any hearing under this chapter may allow to the party in whose favor judgment is entered, costs of witness fees and a reasonable attorney fee, not exceeding [25%] of the judgment.” The act also states that this change will take effect immediately, so it applies to all pending cases.

This increase is effective immediately and impacts both order approving settlements and order approving settlements with dismissals (Section 20). For a Section 20, the petitioner continues to bear the full cost of the attorney fees. For order approving settlements, the parties typically split the overall 20% attorney fee as 40% payable by petitioner and 60% payable by respondent. The increase will raise the issue of whether the judge can assess the higher fee against the petitioner when there is a 20% written fee agreement in place with their counsel. We are concerned the increased fee will be assessed against the respondent only and be raised to provide the full 25% fee with the respondent footing their share of the fee and the petitioner’s. Recall the assessment of counsel fees is within the discretion of the judge.

In the previous version of this bill, which was rejected, there was a provision that would include a change in fee calculations on a motion for medical and temporary disability benefits. That provision was removed in the version approved and signed by the acting governor. While we expect that petitioner’s bar will argue that this change should also be applied to motion fees, we will continue to dispute and argue against same.

Impact

The increase in attorney fees from 20% to 25% will result in increased costs to all parties and respondents will continue to bear more of the cost. When negotiating a Section 20 settlement, the demands will increase due to the higher fee the petitioner now faces. The only party benefiting from this change in the law is the attorney for petitioner.

This article originally appeared on Weber Gallagher.

About the Authors:

Jeffrey D. Newby is board of directors & workers' compensation co-managing partner, Weber Gallagher LLP. jnewby@wglaw.com

Vanessa Mendelewski is a partner at Weber Gallagher LLP. vmendelewski@wglaw.com