When Does The Responsibility to Pay Attorneys’ Fees Shift to Employer or Insurance Carrier in LHWCA Cases?

Man limping after maritime accident and personal injury

In a longshore case, an attorney can collect a fee only if successful in prosecuting the case for the claimant. 33 U.S.C. § 928. In the overwhelming majority of successful cases fees and costs are paid by either the employer or the employer’s insurance carrier.

Under the LHWCA, an attorney may not collect a retainer fee or receive a contingency fee (a percentage of your award) for representing you in your claim. All requests for attorney fees must be submitted to the OWCP, Office of Administrative Law Judges, or to the courts for approval. Fees must be reasonable in relation to the prevailing rates in the attorney’s local area, the time spent on your case, the experience of the attorney, the quality and complexity of the work performed, and the amount of benefits awarded. An attorney may not collect a fee unless that fee is approved by the OWCP, the Office of Administrative Law Judges, or the courts.

The responsibility to pay a Claimant’s attorney’s fees will shift to the Employer of its Insurance Carrier under Scenario 1 or 2.  In all other cases, the Claimant is ultimately responsible for the attorney’s fee as a lien on the compensation award.

Scenario 1: There is a dispute as to the claim and you haven’t been paid within 30 days of the employer receiving notice – Employer must pay.

For some claimants bringing a case under the LHWCA, the employer’s insurance company is responsible for the claimant’s attorney fees.   This does not apply to every case, however.  This situation only arises where there is a dispute as to the claim and you haven’t been paid within 30 days of the employer receiving notice.  If you are being paid after you filed a claim, this does not apply to your case.

If after 30 days of receiving written notice of the claim, the employer or insurance company has not paid you because they don’t think they are liable for the injury, you will should ]consider retaining an attorney.  If you use one, and the attorney is successful, reasonable attorneys’ fees will be approved and charged to the employer or insurance company.  The attorney for the claimant submits a request for payment which reports the number of hours worked on the particular claim.  This is then multiplied by the hourly fee which is deemed reasonable for the geographical area.  This will then be considered by the district director or Board, or court, and a compensation order will be issued.

Scenario 2: Insurance carrier or employer did pay something initially, but then a dispute arises over how much you should be getting.  If, after a hearing, your attorney obtains an award greater than the carrier was willing to pay prior to the hearing, and the employer of his insurance carrier refuses to accept Director’s recommendation within 14 days – the employer or insurance carrier must pay.

This issue typically comes up if there is controversy over your average weekly wage, or over the permanency of the injury, or any number of other reasons.  Section 28 (b) of the Act makes provision for this, but the procedure is complicated.   The district director will set an informal conference where the parties can make their cases.  A recommendation will then be issued based on that hearing, but if the carrier does not abide by the recommendation within 14 days, and the Claimant used an attorney who ultimately obtained a greater award than the carrier was initially willing to pay, those attorney fees must be paid by the carrier or employer.

The Longshore and Harbor Workers Claims Act (“LHWCA”) claim process is an administrative process, and there are many technical compliance requirements, such as filing the correct form within the correct time frame.  Some cases do ultimately end up in litigation, but only after you have first exhausted all your administrative remedies.  An experienced LHWCA attorney will understand every step required in the administrative process, and can help you obtain the best result possible.

Michael Wales is a Maritime Law Attorney in San Diego, California. Mike also owns AGL Yacht Sales, Inc., a San Diego Yacht Brokerage, with his wife Leilani Wales. For assistance with any maritime legal matter you may contact Mike at mwales@waleslaw.com or at 619.493.1700. For information on brokerage boats please visit www.aglyachts.com.