The employees attorney has negotiated a settlement with the third party and says that he will send us our “lien” less 1/3 attorneys fees. Do I owe him attorneys fees?
The workers’ compensation law recognizes the claim of the plaintiff’s attorney for recovery of a fee from the intervenor in the third party suit. The fee and costs is not to exceed 1/3 of the lien recovery. A fee is also earned if the employer approves the settlement of a third party claim. Again this fee is limited to a maximum of 1/3. Thus, you have some leverage (your approval of the settlement) to negotiate the fee with the attorney. However, the matter becomes more problematic if the settlement funds have already been sent to the attorney, suit has been dismissed and the prescriptive period for you to file suit has passed. These events greatly lessen your leverage, particularly if the amount of the lien recovery offered to you is the full lien less the attorney’s fee. NOTE: You do have the right to take a credit against any future compensation benefits for the net recovery of the employee in the third party suit.
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