• March 13, 2014

Indian_construction_workers_at_Boulder_Dam,_Nevada_-_NARA_-_298638There are some workers who, as a group, generally make a lot less money than otherwise similarly situated workers: injured workers.

So, if you are a lawyer for whom this is your client base, you face an obvious challenge: making money.

This has not escaped the attention of state legislatures and Minnesota, like all fifty states, has workers compensation legislation specifically provided a mechanism by which workers’ comp lawyers can get paid (but not overpaid) when they make a recovery for injured workers. The Minnesota workers’ compensation statute sets out the “25/20 formula.”

Attorney fees for obtaining medical benefits are to be calculated based on 25% of the first $4,000.00 and 20% of the next $60,000.00 of medical benefits awarded with a cap of 20 percent of the first $130,000 of compensation awarded to the employee.

But, let’s say the injured workers’ lawyer worked very little and was entitled to $13,000 by simple mechanical application of the 25/20 formula. Does any judicial officer, the compensation judge or any appellate body, have the authority to give the injured workers’ lawyer’s bill a haircut?

In Irwin v. Surdyk’s Liquor, the Minnesota Supreme Court held that a hard ceiling on attorneys’ fees for workers compensation lawyers by the Minnesota legislature violated the separation of powers doctrine. Can the Minnesota legislature establish a floor beyond any judicial review consistent consistent with the separation of powers doctrine?

And what about the Minnesota Rules for Professional Conduct applicable to lawyers that require that an attorney’s fees be “reasonable” (Rule 1.5(a))?

Minnesota Supreme Court Justice David R. Stras appeared most troubled among the justices by a lopsided standard (i.e., a finding that the judiciary can be barred from reviewing the statutory minimum but not barred from review of the statutory maximum).

Here and elsewhere, it seems to me that many judges, particularly on the right side of the ideological spectrum seem to overlook the nature of contingent fee work (with which many or most of them are inexperienced).  $13,000 for 10 hours of work most certainly seems extraordinary, excessive, and unreasonable.  Spread out over the many cases in which the contingent fee lawyer obtains no recovery, however, maybe such a recovery would not only be reasonable but vital to the proper function of the workers compensation system?


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