How much is this going to cost me?

I often hear this question when new clients come to the office for the first consultation. This question is often asked in both personal injury cases (auto accidents, slip and fall, defective products) as well as workers' compensation cases.

If you felt the need to contact a personal injury attorney, we can just go ahead and assume that you have suffered enough. Our initial consultation is free, and if we determine that you have a case, you won’t pay us a cent unless we get you good results. Our fee is based on a percentage of your settlement or judgment.

In Pennsylvania workers' compensation cases, our fee is set by statute at 20% of whatever benefits we obtain for you. Also, we will cover any litigation costs that are necessary to win your workers' compensation case. An average workers' compensation case could cost up to $5,000.00 to litigate. If we are successful, the workers' compensation insurance company will pay those litigation expenses, above and beyond any award you've won.

New case law on unreasonable contest attorneys fees

There is a new case from the Commonwealth Court of Pennsylvania on the issue of what constitutes an "unreasonable contest" thus allowing the claimant's attorney to get paid attorney's fees from the insurance company. In Costa v. Workers’ Compensation Appeal Board (Carlisle Corp.), decided on October 14, 2008, the workers’ comp insurance carrier was found to have a reasonable basis to contest a claim even though their own doctor agreed a work injury had taken place.

I've already blogged about the background and law allowing unreasonable contest attorneys fees. You can see that May 2008 post here. As I stated in that post:

The awarding of attorney’s fees in workers’ compensation cases is the rule
not the exception. See Section 440(a) of the Workers’ Compensation Act (Act). Thus, the employer has the burden of presenting sufficient evidence to establish a reasonable basis for contesting a claim petition in order for the employer not to have to pay the claimant attorney’s fees.

Despite the fact that the awarding of fees should be the norm, the courts generally think differently, as in the above cited Costa case. There, the court noted that the insurance company doctor had a different opinion as to the extent of the work injury as compared to the claimant's treating doctor (a neck strain vs. a herniated disc that require surgery). The court held that because of this difference, that was enough to demonstrate a reasonable contest by the insurance company. It did not matter that the defense doctor clearly indicated a work injury. However, in this case, the insurance company denied the entire claim from day one. It didn't accept the claim of a work related neck strain. It just issued a notice of denial from the start.

This decision is completely wrong and unfair to claimants. If an insurance company denies a claim totally and right in the beginning, it should not have the ability to come back later, during litigation, with new evidence to "boot strap" a reasonable contest. If their medical expert gives the opinion that a work injury occurred, then that's the ball game and claim should be accepted and unreasonable contest attorneys fees should be issued. Only then should the parties litigate the issue of what type of work injury occurred.

The court in this case basically gave the insurance company a "get out of jail free" card.

Unresonable Contest Attorneys Fees in Pennsylvania Workers' Compensation Cases

Most (if not all) Pennsylvania Workers' Compensation attorneys charge their clients 20% of the benefits that are won as payment for their services. The Workers' Compensation Act limits the fees to 20%, so an attorney cannot charge the client more than that; however, in some instances I have charged LESS than 20%.

There are cases when the employer/insurance company must pay the attorney an hourly fee. These are called Unreasonable Contest Attorneys Fees. This does not happen very often, but in some cases, the insurance company's defense is so lame and lacks any basis in fact or law, that the judge declares that the carrier is unreasonably contesting the claim.


If this happens, the attorney usually submits a fee exhibit detailing the amount of hours spent in the case and charging their normal hourly rate. My hourly billable rate for my experience and geographic area is $250/hour. Once I get paid from the carrier, then the claimant receives a credit for the hourly fees I've received on the 20% that they will be paying me as the weekly checks roll in. This means that if the employer/insurance company has acted so bad in denying a claim or benefit, then they are punished by having to pay more and also the claimant receives more money in his/her pocket.


Here is the statute and case law that addresses this issue:

77 P.S. §996(a), which states in pertinent part:

In any contested case where the insurer has contested liability in whole or in part, … the employee … in whose favor the matter at issue has been finally determined in whole or in part shall be awarded, in addition to the award for compensation, a reasonable sum for costs incurred for attorney’s fee …: Provided, That cost for attorney fees may be excluded when a reasonable basis for the contest has been established by the employer or the insurer.

The awarding of attorney’s fees in workers’ compensation cases is the rule not the exception. Section 440(a) of the Workers’ Compensation Act (Act); General Carbide Corporation v. Workmen’s Compensation Appeal Board (Daum), 671 A.2d 268 (Pa. Cmwlth. 1996). Thus, the employer has the burden of presenting sufficient evidence to establish a reasonable basis for contesting a claim petition in order for the employer not to have to pay the claimant attorney’s fees. Lemon v. Workers’ Compensation Appeal Board (Mercy Nursing Connections), 742 A.2d 223 (Pa. Cmwlth. 1999), appeal denied, 562 Pa. 676, 753 A.2d 822 (2000). The existence of a reasonable contest is a question of law, based on the WCJ’s findings of fact, and is fully reviewable by the appellate courts. Id.