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Counsel Fees In New Jersey Workers’ Comp Are Not Limited To 20%

Failure to make timely payment of temp benefits may subject employer to enhanced fees

We have previously written about the matter of Qureshi v. Cintas Corporation, A-2703-10T2 (App.Div. February 15, 2012) in prior legal updates. The case has now made its third appearance before the Appellate Division.

The initial issue before the court was whether a judge of compensation must award counsel fees in addition to a penalty when an employer fails to make timely payment of temporary disability benefits. That was answered in the affirmative in 2010. That opinion can be found at 413 N.J. Super. 492 (App.Div. 2010).

The case has managed to return to the Appellate Division two more times for a determination of the proper method of calculating the counsel fee in such a situation. In New Jersey, the petitioner’s counsel fee is generally based on 20% of the award pursuant to N.J.S.A. 34:15-64. In this case the judge of compensation awarded petitioner $217.05 in counsel fees, which was 20% of the award. Petitioner appealed and said that the award was far too low. After the first remand, the award was increased to include an additional $247.05 in counsel fees.

The Appellate Division has now made clear in its third consideration of this matter that fees in cases of untimely payments may be calculated in a completely different manner. “In order to establish a reasonable attorney’s fee, we must ascertain the hours expended, the attorney’s customary hourly rate, the result achieved for the client, and the risk of nonpayment.” It added, “This determination is a quantitative and qualitative review of the work performed by the attorney. This review includes a determination whether the tasks undertaken and hours expended are reasonable.”

The court noted that none of the tasks involved in this case were complex and, therefore, did not allow a $450 per hour rate requested by petitioner’s counsel. It approved a rate of $250 per hour and a rate of $100 per hour for counsel’s paralegal. It approved approximately 14 hours of attorney work associated with the initial motion and remands for a total fee of $3,542.50 and 2.5 hours of paralegal work for a total fee of $250.

While the amounts at issue in this case were small, it is important for employers to know that untimely payments of awards may lead to a much steeper cost than simply 20% of the amount owed.

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