A State Industrial Commission order eliminating the deduction of attorneys fees from the amount of benefits a person receives in a workmen's compensation case has touched off another chapter in the ancient battle between employees and employers-insurance carriers.
Based upon what was said during the commission's Wednesday meeting, it seems likely the issue is far from being resolved and could result in some lengthy court proceedings.At issue is whether the commission's 2-1 decision should result in a rule requiring that any attorney fees in workmen's compensation cases not come out of the award the claimant receives. Or should the rule have been in place before the decision was given as Commission Chairman Stephen M. Hadley contends.
Further complicating the issue is the fact that Lenice L. Nielsen resigned several weeks ago as a commissioner and April 29 was his last day on the job. He didn't attend Wednesday's meeting, and his replacement hasn't been appointed by Gov. Norm Bangerter.
Last Jan. 7, administrative law judge Gilbert A. Martinez issued an order on a claim filed by Stanley Lou Harrison, Vernal, who was injured while working for Olympus Oil Co.
Harrison received some benefits, but when he insisted that he have a second operation, the Workmen's Compensation Fund cut off his benefits, according to Jinks Dabney, the attorney Harrison hired in an attempt to get the benefits restored.
Martinez ruled that any attorney fees paid will be over and above the amount of benefits Harrison receives. Olympus Oil, the Workmen's Compensation Fund and the Second Injury Fund appealed the decision to the commission.
A few days ago, Commissioner John Florez and Nielsen upheld the decision while Hadley dissented on the attorney fee deduction issue but concurred on some parts of the decision.
At Wednesday's meeting, the decision was supported by labor union representatives and workers but opposed by attorneys representing businesses and insurance companies that write the workmen's compensation insurance.
Hadley noted that James R. Black, attorney for the defendants, has filed a motion to have the commission reconsider its decision to uphold Martinez' order. Because that motion was filed, Hadley said the case is not completed and nothing more can happen until the final appeal has been taken.
Without Nielsen to back him in denying the motion for reconsideration, Florez said he would write an order reflecting the majority's view in two days. Meanwhile, Florez pushed to start the process of making a rule on the attorney fee deduction issue to be consistent with the majority opinion.
Under the commission's rules, if no action is taken on the motion for reconsideration within 20 days, the order takes effect. Several people at Wednesday's meeting indicated there will be appeals to the Utah Court of Appeals and possibly to the Utah Supreme Court.
Hadley believes a rule on the attorney fees should have been in place before the decision was issued.
In upholding Martinez' order, Nielsen and Florez said the intent of establishing the Workmen's Compensation Fund many years was to "provide employee benefits for work-related injuries in a speedy, equitable and efficient manner without lengthy litigation costs and attorney fees being imposed on injured workers."
They said state law requires that a deserving injured worker receive two-thirds of his weekly average wage without deductions for court costs and attorney fees and nowhere in the law does it provide worker's benefits be reduced by 10, 15 or 20 percent for attorney fees.
By requiring the insurer to pay attorney fees as a separate award, Florez and Nielsen said the commission is instituting a policy to encourage insurance companies to properly investigate claims and to pay benefits in a timely manner.
"The ruling encourages rapid settlement of claims in order to avoid financial hardships being placed on the injured employee who is generally without employment and to avoid needless lengthy litigation costs which now are passed on to Utah employers," Florez and Nielsen said.
Several people representing companies said the added cost will be borne by the companies through increased premiums to their insurance companies, making it even harder for business to operate in the state. Some even suggested that businesses will refuse to come to Utah because of the higher costs.
But, other people representing injured claimants and labor unions, said by treating Utah employees in a better manner, companies will want to expand into the state.
Regardless of whether the commission has the authority to proceed with making a rule to be consistent with the 2-1 decision, several people explained the factors should to be considered when writing such a rule.
Interested parties have until May 30 to submit written comments and a hearing will be held June 15. The rule could become final Aug. 12, if finally approved by the commission.