The world of claimant attorney fees can be somewhat confusing, so I thought I would go over the types of fees under the law. There are attorney fees that are paid by the Employer/Carrier, and those that are paid by the claimant to their attorney (sort of anyway). Settlements are typically worded as inclusive (of attorney fees) or plus (attorney’s fees)
There are basically three different types of claimant attorney fees:
- An E/C paid statutory guideline fee under 440.34 based on the value of the benefits secured. The guideline fee schedule is
- 20% of the first $5,000 of benefits secured,
- 15% of the next $5,000, and
- 10% thereafter.
An easier way to look at it is for anything over $10,000, its 10% plus $750 (on $50,000, it is $5,750 for example). A claimant attorney has to secure a benefit listed on a PFB to be awarded a fee by the JCC or settle the claim, broken down as an amount to the claimant PLUS the guideline fee. We are not seeing this type of fee very often as there are greater fees under 2) and 3) below.
- If the JCC finds the statutory guideline fee above is not reasonable based on the time it took the attorney to secure the benefits, the JCC can award an E/C paid fee based on the hours the claimant attorney spent securing those benefits. The process for this is after the benefits are provided late or awarded by the JCC, the claimant attorney files a Verified Petition for Attorney Fees. The claimant’s attorney alleges how much time they spent securing the benefit, their requested hourly rate, and asserts the statutory guideline is not reasonable, and requests the JCC order the E/C to pay their hours. We file a response disputing it, and we either resolve the fee or the JCC holds a trial on the fee amount. Important to note, that the claimant attorney’s fee “clock” for their hours keeps running until we stipulate that they are entitled to a fee. Providing the underlying benefit does NOT stop the fee clock, only stipulating to entitlement to a fee does so. So fi you know you owe a fee, stipulate and stop the clock.
- A claimant paid Miles attorney fee (or guideline statutory guideline fee) is one the claimant agrees to pay their lawyer. Miles was a case that says in the contract of representation the claimant signs with their lawyer, the claimant can waive the statutory guideline fee limits in 440.34 (number 1 above), and agree to pay their attorney a higher amount, commonly 25% of the value of the benefits secured. A JCC cannot award a Miles fee to be paid by the E/C, that is paid by the claimant only, and is a contract between the claimant and their lawyer. So technically, a Miles fee is only payable to a claimant attorney in an inclusive settlement because the claimant is paying the fees out of their settlement.
I say sort of because this is how it is playing out in reality.
Let’s say the claimant wants to net $20,000 in a settlement, and will not agree to less. So you are thinking the settlement should be $22,750 which is $20,000 fee plus the 440.34 guideline fee so the net to the claimant is $20,000. However, because of the Miles deal with their lawyer, the claimant would not agree to $22,750, because they would only net $17,062 after the 25% Miles fee.
So… how is this your problem? The answer is it is not, but, if the claimant will not settle unless the net is $20,000, you will have to pay $25,000 inclusive of attorney fees to get the claim settled. So you see what I mean by sort of claimant paid. The E/C winds up paying a little more, but a settled claim is a settled claim!
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Morgan Indek | Managing Partner