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Vol 2, Issue 11

Find Solutions & Strategies                              March 14, 2011

Attorney's FeesLabor Code 5710
The continuing slippery-slope for attorney's fees
In This Issue
* RECENT PANEL DECISIONS: new & further disability; death benefits
* BLOG ROUND UP: fraud, CCCs, medical fees, opioids
* NEWS HEADLINES: CASE's labor agreement

A Note From the Editor

Robin Kobayashi 2010
Dear WC Professionals: 


Thanks to our contributing writers this week, including Neil Robinson for his article on attorney's fees and Jennifer Jordan for an eye-opening piece about Medicare Set-Asides and Special Needs Trusts. I encourage you to purchase Jen's book, The Complete Guide to Medicare Secondary Payer Compliance. See why hundreds of others have come to trust this reliable resource.

Robin E. Kobayashi, J.D.
LexisNexis Editorial & Content Development
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attorney's fees

Neil RobinsonLabor Code 5710 - A Continuing Slippery-Slope, by Neil R. Robinson, Esq. With plausibly clear language, Labor Code 5710, subdivision (b) provides that the employer or insurance carrier shall pay an injured worker's reasonable attorney's fees incurred when represented by an attorney and deposed by the employer or insurance carrier (defendant). More controversial is the value of compensation an injured worker's representative (applicant's counsel) is entitled to collect. Subdivision (b)(4) states: "The fee shall be discretionary with, and, if allowed, shall be set by, the appeals board, but shall be paid by the employer or his or her insurer."[FN1]


Clearly injured workers are best served by competent counsel that are timely paid for their professional representation at depositions while insurers are understandably concerned about cost-containment and the avoidance of what they may deem extraordinary deposition fees. The resultant clash over how to value applicant's counsel compensation is as dated as the attorney fee provision itself. One recent illustration of the continuing discord associated with the payment of Labor Code 5710 fees is illustrated by the recent WCAB panel decision in Alvarez v. Moreno Valley Unified School District, 2010 Cal. Wrk. Comp. P.D. LEXIS 394> Read more subscribers can link to the cases and other citations in this article. Be sure that you're logged into your account.


This article will appear in the April 2011 issue of the California WCAB Noteworthy Panel Decisions Reporter. To subscribe to this reporter, contact [email protected]. The reporter is designed for subscribers only.

msa and special needs trusts
Jen Jordan March 2010 thumbnailMedicare Set-Asides and Special Needs Trusts, by Jennifer C. Jordan, Esq.


"Not many people have really taken the time to understand what a Medicare Set-Aside will do to qualification for Medicaid if claimants find themselves in need of long-term care and do not have insurance for it, as many do not."


Now that those involved in personal injury settlements, whether workers' compensation or liability insurance based, have finally come to understand the Medicare Secondary Payer Act ("MSP") to some extent, it appears that they have also begun to realize that the act of establishing a Medicare set-aside arrangement ("MSA") may have detrimental results if consideration of anything other than Medicare's interests are not taken. One such consideration should be Medicaid eligibility. > Read more

recent panel decisions - sneak preview
Each week we report a few recent panel decisions that we're considering for the LexisNexis services:
NOTE:This free eNewsletter reports only a handful of panel decisions each month. If you want notification of all 50 to 65 noteworthy panel decisions added each month to the Lexis database, please consider purchasing our new panel decisions reporter (see below).

Petitions to Reopen; New and Further Disability; Five-Year Statute of Limitations. WCAB, affirming WCJ's decision, held that applicant's DOR to proceed to expedited hearing filed within five years of her industrial injury constituted a timely filed petition to reopen for new and further temporary disability, which gave WCAB jurisdiction to award temporary disability extending beyond five years after date of injury; WCAB noted that, contrary to WCJ's opinion, WCAB did not have original jurisdiction on issue of temporary disability because issue of temporary disability had been previously adjudicated and, therefore, had applicant's DOR/petition to reopen not been timely filed, she would be barred from further temporary disability benefit. See Helms panel decision.


Death Benefits; Special Death Benefits for Dependents of Public Employees. WCAB upheld WCJ's finding that three adult children of injured worker/nurse who died of aggravated hypertension and psychiatric injury were entitled to dependency benefits pursuant to LC 4704 and were not precluded from receiving benefits based upon widow's receipt of special death benefit provided by Public Employees' Retirement System (PERS) under LC 4707(a), when WCAB found that children's total dependency constituted good cause to award benefits under LC 4704; WCAB, disagreeing with WCJ's calculation of benefits by determining total value of benefits ($320,000) and dividing amount by five dependents, recalculated benefits by dividing difference between amount widow with dependents would receive ($320,000) and amount widow without dependents would receive ($250,000), i.e. $70,000 divided by five dependents. See Afolayan panel decision.


BLOG ROUND UP: lexisnexis workers' comp law community
Fraud SignWorkers' Comp  Fraud Blotter 3/11/2011 - recent arrests, charges, convictions, investigations. Read it.

Cal Comp CasesCal. Comp. Cases February 2011 Final Monthly IssueRead it.

Goldman Magdalin KrikesGMK Prevails Against Petition for Writ of Review Regarding Medical Providers' Claims for Extraordinary Fees in Excess of OMFS, by Goldman, Magdalin & Krikes LLP. Read it.
CWCICWCI Study Examines Prescribing Patterns for Schedule II Opioids in California Workers' Comp, by California Workers' Compensation Institute. Read it.
Take Control of Your Insurance Settlements With A Brand New Resource From LexisNexis!


Thumbs Up  "The range of topics included in the book and updates is a beacon of wisdom in the confusing MSP compliance field."


- Tim Nay, Esq., Law Offices of Nay & Friedenberg, Portland, Oregon. Mr. Nay is a co-founder of the National Alliance of Medicare Set-Aside Professionals (NAMSAP). 


Thumbs Up  "I have a copy of Jennifer Jordan's book The Complete Guide to Medicare Secondary Payer Compliance and I am most impressed by same! I have recommended it to a number of attorneys here in Georgia."


- Richard C. Kissiah, Esq., Kissiah & Lay, Alpharetta, Georgia. 


Thumbs Up  "Finally, someone delivers a clear, concise reading in this area, with some definitive answers for both lawyers and claims specialists and accurate reporting dealing with MSP compliance and MSA allocations with all of the necessary resources found in one place."


- Brad Bleakney, Esq., Bleakney & Troiani. Read his complete review at Illinois Workers Compensation blog.

Thumbs Up "An excellent new book ... a one-of-a-kind resource ... [Jennifer C. Jordan's] straight-talk is much appreciated when it comes to this illusive area of the law." 


- Rebecca Shafer, JD, President, Amaxx Risk Solutions, Inc.

There are many people who don't understand that the Centers for Medicare and Medicaid Services' approval process of a Medicare set-aside arrangement is voluntary and carries P1130 R12 coveran inherent cost. In fact, many of the decisions that need to be made in a settlement negotiation are risk management decisions rather than being truly Medicare Secondary Payer-oriented. Once you understand why CMS wants what it wants, you will realize that its preference may not be the only way to achieve MSP compliance. The Complete Guide to Medicare Secondary Payer Compliance, Jennifer C. Jordan, Editor-in-Chief, will help you take control of your insurance settlements. > Read more about the contents (1,350 pages). List Price: $179


> CA: AB 889 Would Give Domestic Workers Bill of Rights

> CA: Kent Dagg Speaks Out on End of SCIF Probe

> CA: Governor and CASE (State Judges, Attorney's Union) Reach Tentative Labor Agreement

> CA: Governor Names New Labor Commissioner

> CA: 135 Contractors Busted in State-Wide Sting

> CA: California Ambulatory Surgery Association Fights Against DWC Proposal to Reduce ASC Fees

> CA: WCJ Seiden Upholds Manhattan Beach Police Officer's Workers' Comp Claim for Cancer

> ACOEM Releases Position Statement on Mold Exposure and Health Effects

job postings

Workers' Compensation Defense Attorney - Grancell, Lebovitz, Stander, Reubens and Thomas


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Workers' Compensation Defense Attorney - Goldman, Magdalin & Krikes, LLP - Fresno, CA


Goldman, Magdalin & Krikes, LLP is a well-established, highly reputable firm specializing in the defense of workers' compensation and related matters. With 7 offices serving all venues in California, our attorneys handle full case loads, providing high-quality representation for our clients.


We are seeking an associate attorney with 5 years minimum defense experience.  Successful candidates will possess strong litigation, verbal and writing skills.  Travel to appearances is required. 


We offer a competitive salary and comprehensive benefits package including medical, dental, life, STD & LTD insurance, and matching 401k.


Please submit your resume with salary history in Word format to Allyson Madson at [email protected].

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Designed especially for subscribers only, this monthly reporter saves you research time so that you can quickly find recent panel decisions on key topics.


We do the legwork for you: Our editorial consultants pour through hundreds of cases to find noteworthy decisions that you should know about.

What you get each month: Brief summaries of typically 40 to 65 cases, arranged by topic. Commentary articles written by guest contributors.
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attorney's fees, continued...

Attorney In Alvarez, applicant's counsel charged defendant a deposition fee rate of $275.00 per hour. Although defendant did not object to the total time charged by applicant's counsel, a certified specialist in workers' compensation, defendant objected to the rate of $275.00 per hour and instead paid at $250.00 per hour, leaving a balance owing of $56.25.[FN2] Applicant's counsel filed a petition seeking an award of the remaining unpaid fee. After a Workers' Compensation Administrative Law Judge (WCALJ) ordered the fee paid at the rate requested by applicant's counsel, defendant filed an objection. At trial on the fee dispute, applicant's counsel submitted contemporaneous documents demonstrating that other insurance carriers had paid and other judges had awarded him deposition fees at a rate of $275 per hour. Defense counsel submitted no evidence but argued at trial that a reasonable fee at the time of Mr. Alvarez's deposition is $250.00 per hour. Relying on the authority to award attorney's fees pursuant to Labor Code  5813, subdivision (a), the trial judge awarded applicant's counsel $2,250 in hourly fees at $300 per hour pursuant for the time incurred by applicant's counsel in securing his deposition fees. Additionally, the disputed $56.25 was awarded. When awarding attorney's fees pursuant to Labor Code  5813, the trial judge specifically concluded that because defense counsel did not submit evidence supporting his argument that a reasonable fee is $250.00 per hour, defense counsel had engaged in "bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay."[FN3]


The use of Labor Code  5813 to award attorney fees and sanctions for defendant's failure to pay deposition fees pursuant to Labor Code  5710 dates back to at least 1999 in EMC Insurance Company v. Workers' Compensation Appeals Board (Writ Denied)(1999) 65 Cal. Comp. Cases 75. In EMC, Defendant refused to pay Labor Code  5710 fees until a judge signed an uncontested order awarding the fees. An order to pay is not a prerequisite to the expected voluntary payment of those deposition fees that are uncontested. A similar result occurred in Roshandell v. Sear, Roebuck & Co. 2006 Cal. Wrk. Comp. P.D. LEXIS 38. In Roshandell, applicant's counsel was awarded both Labor Code  5814 increased compensation and attorney fees pursuant to Labor Code  5813 when defendant failed to pay deposition fees for 64 days and eventually paid the uncontested portion after applicant's counsel sent a follow-up request for payment. Once more, an order is not a condition precedent to the voluntary payment of uncontested deposition fees. Although neither case provides guidance on what evidence would be persuasive in a deposition fee dispute, they do illustrate how the use of fees and sanctions can be imposed should defendant fail to pay the that portion of the fee that is uncontested. In Alvarez defendant timely paid the uncontested fees litigating only the contested difference between $250 and $275 per hour.


What evidence each party must submit to prove their respective positions in a Labor Code  5710 fee dispute is unclear, and Alvarez does nothing to shed light on what proof is required. The trial judge in Alvarez stated throughout his Report and Recommendation, Labor Code  5710 fees are discretionary with the Appeals Board and by delegation with each WCALJ who hears fee cases. Apparently applicant's counsel must merely demonstrate that other judges and insurers had been willing to order or pay the requested fee rate contemporaneous in time to the fee dispute. Even so, the trial judge concluded that this evidence was helpful and admissible, "but not necessarily determinative of the issues raised in the instant matter." Another factor that weighed heavily in Alvarez is that applicant's counsel is certified in workers' compensation and thus presumably an accomplished attorney in workers' compensation litigation. Nonetheless, if the evidence submitted by applicant's counsel was not persuasive, it is unclear on what evidence the judge in Alvarez was relying or if deposition fees can be awarded without evidence of reasonableness because they are discretionary.


Although inexcusably defense counsel produced no evidence to demonstrate that a deposition fee of $275 per hour is unreasonable compelling a finding that he must pay his opponent's attorney fees pursuant to Labor Code  5813, the trial judge was particularly vague when describing what evidence defendant might have produced. Although applicant's counsel's evidence was admissible but not determinative, the Alvarez judge specifically stated that had defendant produced contemporaneous evidence showing that a fee rate of $250 per hour had been awarded or voluntarily paid, "it still would not be persuasive" that a fee of $275 per hour was unreasonable. If the reasoning in Alvarez is to stand, apparently all that determines whether a deposition fee is reasonable is the discretion of the judge, and contesting an awarded fee rate becomes a quest to prove that the trial judge abused that discretion.


What threshold evidence defendant must produce to avoid the risk of a Labor Code  5813 fee award is ill-defined. Would it have been acceptable to the Alvarez judge for defendant to have produced data demonstrating that defense attorneys who are certified specialists in workers' compensation and who have a similar experience level as Mr. Alvarez's lawyer and who practice in and maintain law offices in the same community are only compensated $175 per hour? The economic variances of an applicant's contingency-fee practice compared to a defense attorney practice might dictate against such evidence being dispositive, but would it be enough to alleviate an award of fees pursuant to Labor Code  5813? Perhaps a defense lawyer could muster evidence from her insurance client to prove that an applicant's attorney similarly credentialed would only command a fee of $250 for representing injured workers. Would such data need to be refined to the relevant community or could that data include all of California or perhaps include fee awards from many jurisdictions? Might defense counsel have produced expert witnesses to testify about how much deposition lawyers should be compensated? Would it be required that such an expert be an applicant's attorney and, if so, is it realistic for defendant to acquire a member of the applicant's bar to testify against his or her self-interest?


When the Appeals Board panel adopted the Alvarez judge's reasoning in denying defense counsel's Petition for Reconsideration, they offered no guidance to members of the workers' compensation community on what is sufficient evidence to contest fee rates or how to prove entitlement to fee rates beyond those rates commonly awarded. When fees are determined solely by discretion and not an evidentiary standard, it is difficult to imagine what evidence a defendant might safely produce to contest a fee and remain free from the consequences of an additional fee award pursuant to Labor Code  5813 should the trial judge disagree. Certainly a more precise definition of discretion is needed so that proof of its abuse can be more readily identified and proven.


Assessing the value of attorney services in workers' compensation cases is a recurring issue WCALJ's frequently encounter. Aside from deposition fees, there are contingency fees that must be approved and awarded. Unlike deposition fees however, there is a great deal more guidance afforded to adjudicators, because an injured worker's recovery is reduced by the amount of contingency attorney's fees awarded, thus requiring enhanced vigilance. California Code of Regulations, Title 8, section (Regulation) 10775, and WCAB Policy and Procedural Manual section 1.140 offer guidelines for ascertaining an appropriate attorney fee. Although not strictly applicable to contingency fees, they are rarely if ever referenced in deposition fee disputes. Regulation 10775 requires an analysis of several factors before setting an attorney's compensation to include the responsibility assumed by the attorney and the care exercised in representing the applicant. Hourly fees are specifically addressed in the WCAB Policy and Procedural Manual, section 1.140, subdivision 4, where it is stated that a recognized specialist with demonstrated skill in the field of workers' compensation "is to be valued much more highly on an hourly basis" than less experienced counsel. Section 1.140, subdivision 4, additionally cites two cases that establish legal standards for assessing the value of attorney services. In Rose, Klein & Marias v. Workers' Comp. Appeals Bd. (1974) 39 Cal. Comp. Cases 771; 1974 Cal. Wrk. Comp. LEXIS 2365, and Bentley v. Industrial Accident Commission, (1975) 75 Cal. App. 2d 547; 171 P.2d 532; 1946 Cal. App. LEXIS 1276, the court considered the responsibility assumed by the attorney, the care employed by the attorney, the time devoted to the case and the results obtained when determining a fee. Perhaps there is guidance in these citations for assessing the value of deposition fees, at least in part by analogy.


Some workers' compensation communities throughout the state have orchestrated novel methods to assist adjudicators in setting deposition fees at levels acceptable to the community as a whole. Bench and Bar committees have been utilized for the purpose of agreeing on recommended fee schedules that formulate various fees depending on a practitioner's level of experience. Although advisory, they have helped reduce the frequency of deposition fee disputes, which is increasingly important. Each deposition fee dispute, whether for $50.00 or $750.00, incur costs way beyond those envisioned by embroiled litigants. Each fee trial requires the services of a court reporter, court time, and judicial resources, not to mention involving the expense of lawyers from both sides of the bench. In an era where hiring freezes restrict the Division of Workers' Compensation from filling open positions, judicial resources are better spent performing core services like adjudicating whether a severely disabled injured worker is entitled to home health care when recovering from a work related surgery or the timely dispensation of a defendant's request for an order terminating temporary disability payments. Extrapolating the number of deposition fee petitions and fee adjudication matters that require judicial resources throughout the more than 20 district offices and over 150 judges statewide, the fiscal impact of fee disputes should not be underestimated.


In an era where government efficiency is a predominant feature of daily news reports, and fewer resources are available to administer government programs, a legislative or regulatory revisit to the issue of deposition fees is evidently needed. A large factor in a functioning workers' compensation system is the regulation of costs. Regulators determine the compensation doctors and pharmacies receive. Permanent disability, a core component to any workers' compensation system, is scheduled by rules drawn by legislatures and regulators. Workers' compensation insurance rate increases are approved by a governmental body. Contingency fee awards are regulated. Perhaps the adoption of a statewide deposition fee schedule, although politically unpopular, is needed so that precious judicial resources can be reserved for the resolution of those disputes that are the core of workers' compensation litigation.


Note: At the time this article was written, it was unknown whether defense counsel had filed a petition for writ of review in this case. Practitioners should check the subsequent history of this case before citing to it.



1. Although Labor Code  5710 was enacted in 1937, the attorney fee provision in subdivision (b)(4) was not included until a 1972 amendment.

2. Apparently, Mr. Alvarez's lawyer filed a petition for the payment of $56.25. Another judge ordered it paid but counsel for defendant timely objected, resulting in the matter being set for trial.

3. See Labor Code  5813, subdivision (a), and California Code of Regulations, Title 8, section 10561, subdivision (6)(A).


Neil R. Robinson, Esq., a former Workers' Compensation Administration Law Judge, is currently Tax Counsel III (Specialist) for the California State Board of Equalization.

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enewsletter archives
Take a deep dive into our past eNewsletters for 2011 and prior...warning - some links to articles may not any linking problems to [email protected].

March 7, 2011

February 28, 2011
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January 24, 2011 (addendum)
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