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:
- Revision of Application for a Fee by Claimant's Attorney or Representative (Form OC-400.1); and
- Review of the procedure used by the Board to award fees for services rendered by an attorney or licensed representative.
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 firstname.lastname@example.org. The proposed amendment proposes the following changes:
- Raise the limit for oral fee applications from $450 to $1,000. When the proposed regulation takes effect, Form OC-400.1 will be revised to reflect the new $1,000 oral fee request limit.
- Provide a mechanism for counsel to request withdrawal from representation.
- Provide that the claimant shall sign any written fee application submitted to the Board for approval.
- Provide that the Chair may require an attorney or licensed representative with access via the Internet to his or her client’s electronic case folder receive Board notices via an electronic mailbox.
Part Two: Modifications to Form OC-400.1
Modifications to Form OC-400.1
- The Board will no longer require that the claimant’s Social Security number be provided.
- The claimant’s attorney or licensed representative will specify whether the services rendered relate to the issue of a schedule loss of use, a classification, a WCL § 32 Agreement, or something else, designated by the "other" box.
- Part A, entitled “Services Rendered to the Claimant,” has been revised to indicate that the claimant’s attorney or licensed representative should be as specific as possible when describing the services rendered on the claimant’s behalf, and that disbursements relating to IMEs that do not comport with Title 12 NYCRR 300.2 (Independent Medical Examinations, Examiners, Entities, and Reports made without Physical Examination) will not be considered. The claimant’s attorney or licensed representative will now be required to total the time spent on the claimant’s behalf in the new “Total Hours” portion of Part A. A claimant’s attorney or licensed representative is encouraged to attach automated billing statements in lieu of completing the “Date,” “Description of Service Rendered” and “Time Spent” columns of Part A, as long as these submissions accurately reflect the services rendered on the claimant’s behalf and the new “Total Hours” portion of Part A is completed.
- A new section entitled “Other Considerations” has been added to Part A in order to provide the claimant’s attorney or licensed representative with an opportunity to list any factors that the workers’ compensation law judge (WCLJ) should be aware of when considering the requested attorney’s fee.
- Part B, entitled “Substitution of Attorney/Representative,” has been revised to modify Question 1 as follows: “Has the claimant previously retained any other attorney or licensed representative? Have you served or been served with a Notice of Substitution?” Question 2 has been modified as follows: “Are you aware of any fee requests from other attorneys and/or licensed representatives?”
- Part C, entitled “Attorney/Licensed Representative Certification,” now provides that the attorney or licensed representative must complete a certification and mail a copy of Form OC-400.1 to the claimant ten days in advance of the scheduled hearing if it is known that the claimant will not be present at the proceeding at which the fee is requested. A copy of Form OC-400.1 should also be mailed if a decision is or will be rendered outside of a hearing.
- Part C also requires the claimant’s attorney or licensed representative to certify that the information in the fee application is accurate, a copy of the fee application was provided to the claimant, language assistance services were provided to the claimant to the extent required, and the claimant understands the fee requested.
- A new Section D, entitled “To The Claimant,” is completed by the claimant’s attorney or licensed representative, and informs the claimant of the amount of the fee requested, the manner in which the fee will be requested by the attorney or licensed representative, and specifically provides that if the claimant objects to the request for an additional fee, that he or she may indicate such in the new Section E.
- A new Section E, entitled “Claimant’s Statement,” now provides the claimant with the option of indicating that he/she has no objection to the fee request, or that he/she objects to the fee being requested and to specify a reason for the objection. The claimant’s signature is required. If the claimant’s signature cannot be obtained with reasonable effort, the attorney or representative must attach a written explanation with the fee application for why the signature was not obtained. If the Board finds insufficient excuse for failure to obtain the written signature, the application may be considered defective.
- If a fee is approved, the WCLJ will indicate the date, the amount of the fee approved and provide his/her initials in the newly titled “Internal Use Only if Fee Awarded at Hearing” section of 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:
- Include the amount of the fees previously received, if any, in the header at the top of Form OC-400.1.
- Be specific with respect to the “Description of Services Rendered” section, which should contain detailed and specific information on the actual services rendered to the claimant and the disbursements incurred in the performance of those services. Include only those services rendered since the last award of attorney’s fees. However, if fees were deferred for a period prior to the last awarded attorney’s fee, you may include fees with your current request and should explain in the “Other Considerations” portion of Part A. Provide the “Total Hours” spent on the claimant’s behalf. Provide specific dates the services were rendered, the amount of time spent on the services, and the date and cost of any disbursements.
- Detail any efforts taken to resolve issues outside of the hearing process. The Board encourages such resolutions in order to conserve valuable judicial and administrative resources; they will not negatively impact attorney’s fees that are considered and ultimately awarded.
- Indicate whether the claimant has retained any other attorney or licensed representative. If so, the attorney or licensed representative filing the application must serve a Notice of Substitution upon the former attorney(s) or licensed representative(s) pursuant to 12 NYCRR 300.17(b) and provide the name and address of all attorneys or licensed representatives served. Failure to do so may result in no attorney’s fee being awarded to the newly retained attorney or licensed representative.
- Properly complete Part C if the claimant will not be present at the hearing, or the fee will be awarded outside of a hearing.
- If a claimant objects to the amount of the fee, or an additional fee, Section E of the form must be completed by the claimant.
- Any objection to the fee should be noted by the claimant in Section E, along with a reason for the objection. If there is no objection to the fee being requested, the claimant will indicate as such in 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 ; Matter of Marchese v New York State Dept. of Correctional Servs., 293 AD2d 920 .
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]). 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], [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 ; Matter of Shiqerukaj v Gotham Broad, LLC, 147 AD3d 1262 ), and the dates and time spent on the services (see Matter of Fernandez v Royal Coach Lines, Inc., 146 AD3d 1220 ; Matter of Curcio v Sherwood 370 Management LLC, 147 AD3d 1186 ).
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 ).” 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 ). 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 services rendered and the time spent rendering those services;
- The nature of the claim, and the severity of injury;
- The complexity of the case, considering whether the claim was controverted, if re-openings were necessary in order to ensure proper indemnity payments or prompt delivery of medical to the claimant, and whether the attorney or licensed representative was required to file Requests for Further Action by Legal Counsel (Form RFA-1LCs);
- Whether the services provided fostered a finding of permanency, or hindered it;
- The amount of prior fees and whether fees for prior services were deferred, including efforts by counsel to secure proper medical treatment. Counsel should not request a fee for service previously awarded. If a current Form OC-400.1 lists services that were also listed in a prior Form OC-400.1, from which a fee was awarded, the Board may consider the application defective unless counsel explains (in the “other considerations” box) that a fee for all or part of the prior listed service was intended to be deferred until a milestone event in the claim;
- The financial status of claimant; and
- Whether the attorney or licensed representative engaged in dilatory tactics or failed to comply in a timely manner with Board Rules.
The following factors, set forth in Rule 1.5(a) of the Rules of Professional Conduct (22 NYCRR 1200.0), may also be considered:
- The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
- The likelihood, if apparent or made known to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
- The fee customarily charged in the locality for similar legal services;
- The results obtained;
- The time limitations imposed by the client or by circumstances;
- The nature and length of the professional relationship with the client; and
- The experience, reputation and ability of the lawyer or lawyers performing the services.
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 ). 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 , lv denied, 82 NY2d 655 ).
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 ).
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:
- An accurate description should be provided of the services rendered to the claimant (Tenecela, 146 AD3d 1217  and Shiqerukaj, 147 AD3d 1262 ), and the dates and time spent on each of the services (Fernandez, 146 AD3d 1220  and Curcio, 147 AD3d 1186 ).
- A fee application that is submitted to the Board should not be excessive or based on improperly inflated or exaggerated claims of work performed on the claimant’s behalf (Kennedy,140 AD3d 1572 ).
- The services rendered, number of hours, and hourly rate are all factors for consideration by the Board (Jeffery, 148 AD3d 1484 ).
- There should be no overlap or conflict with any fee requests previously submitted to the Board (Matter of Jackson v NYC Dept. Of Transp., __ AD3d __, 2017 NY Slip Op 02869 ).
- An award of fees may be reduced if an attorney or licensed representative engages in dilatory tactics, or fails to comply in a timely manner with Board rules (Kennedy, 140 AD3d 1572 ; 12 NYCRR 300.17[f]).
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) (Matter of Shea v Icelandair, 63 AD3d 30 ).”
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