The Problem
In the post-SB 899 world, applicant attorneys are evidencing increasing creativity to step up their revenue stream. Not so very long ago, a CAAA member could make a fortune. Permanent disability based on work restrictions and subjective complaints permitted unconscionable—but lucrative—awards. Penalties calculated on the species of the benefit? Cha ching! Fees for work on vocational rehabilitation issues? Low hanging fruit!
Life was great… for CAAA.
These days, however, applicant attorneys are starving (or so they say!). Lately applicants attorneys have been looking to deposition fees and Labor Code 5710 as important source of income via outrageous rates. How much should you pay?
The Law
What does 5710 say on the subjective? Very little! The relevant portion is 5710(b)(4), which provides:
(b) Where the employer or insurance carrier requests a deposition
to be taken of an injured employee, or any person claiming benefits
as a dependent of an injured employee, the deponent is entitled to
receive in addition to all other benefits…
(4) A reasonable allowance for attorney’s fees for the deponent,
if represented by an attorney licensed by the State Bar of this
state. 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.
Clearly, 5710(b)(4) begs the question: What is a “reasonable…attorney’s fee”?
CAAA To The Rescue?
Claiming that they are attempting to devise an hourly rate to avoid unnecessary WCAB time litigating hourly rate issues, some creative attorneys—and even presiding judges—have created “Attorney Fee Guidelines & Recommendations” that are sent to local boards and widely circulated amongst CAAA members. These “Guidelines & Recommendations” are often followed by the local judges, particularly if not challenged by the defense. Such documents currently circulate at a number of WCAB district offices (Sacramento, San Francisco, San Diego…to name a few). I recently reviewed just such a document that recommended $200 for newbie attorneys with no experience and $350 or more for those with 20+ years in the industry.
To put that into perspective, consider this: what is the rate charged by the senior defense attorney who actually conducts the deposition? Probably significantly less than the amount “recommended” for the freshly minted law school graduate sitting across the table!
A recent review of available case law on the subject suggests that anything over $250/hour should routinely receive an objection, regardless of the suggestions found in the local “Guidelines & Recommendations.” How persuasive are those guidelines?
Not very.
Consider the words of WCJ Dennis Stach, who—after reviewing “evidence” submitted by an applicant attorney that included memos with recommended rates authored by the presiding judges from San Francisco and Stockton—declared:
“…the exhibits… are not only inappropriate under the Labor Code but they are irrelevant immaterial and inadmissible hearsay. They are mere opinions of individuals. Said opinions have not been adopted by administrative directors’ office. Each district and each judge has the prerogative of establishing what is reasonable in a way of a fee in the district in which they preside. It is clear under Labor Code Section 5710 the fee is within the discretion of the WCALJ pursuant to Labor Code Section 5710(b) (4) and board rules 10775. It is within the discretion of the WCALJ as to the reasonable fee for services rendered. 1
Irrelevant?
Immaterial?
Inadmissible hearsay?
Mere opinions?
Now that’s great defense language!
The Test
If the “irrelevant,” “immaterial,” “inadmissible hearsay,” and “mere opinions” of various presiding judges and/or local county bar associations do not dictate the hourly Labor Code 5710 fee, what does? A recent WCAB opinion that included the award of additional fees drafted by Commissioner Caplane provides some fascinating language. Although the opinion was determining an appropriate fee for an appellate attorney’s efforts, the discussion is readily applicable to deposition fees as well:
In determining appellate attorneys fees, the Appeals Board considers the attorney’s time, effort, care, experience, skill and results in opposing the writ. The Appeals Board also considers the complexity of the issues raised by defendant requiring a response by applicant’s attorney, the length of the reply (how many pages), and the number of cases cited. Where the issues are novel, for example, involving the interpretation of a new statute requiring an analysis of legislative intent, or an area of law which has published appellate cases containing holdings in opposition, or a complex issue of law intertwined with a complex factual pattern, or where the issues are numerous, a higher fee is awarded because the case is of “above average complexity.” 2
Hmmm… Let’s see here: “effort” and “care”? Did applicant’s counsel properly object to questions, read a newspaper or fall asleep? (I’ve personally witnessed all three!)
“Skill and results”? A quick reading of the transcript should give a great deal of guidance on these factors!
“Complexity of the issues”? It’s a deposition of an applicant, for crying out loud! How “complex” can it get before the applicant is entirely incapable of answering the questions?
Real Rates?
A review of the available case law suggests $250.00 is at or near the high end, even in expensive areas of California. 3
The Lesson
CAAA members everywhere are looking to increase their revenues. You can either help them (bad decision) or object. If the rate they request exceeds $250/hour (and it regularly does), the law is on your side. OBJECT!
Donald R. Barthel is a Founding Partner of Bradford & Barthel, LLP, as well as B&B’s Rating & File Consultation Services. Mr. Barthel is an acknowledged expert regarding the AMA Guides to the Evaluation of Permanent Impairment and the 2005 PDRS. Much of his time is dedicated to teaching these topics to adjusters, human resource directors, employer representatives, attorneys and physicians throughout California and the United States. Have a PDRS or AMA Guides question? Call Don Barthel at (916) 996-1263 or email him at dbarthel@bradfordbarthel.com.
1 Taken from 3/4/08 Report & Recommendation On Petition for Reconsideration, Haller v City of Riverside; expressly adopting and incorporating the WCJ’s reasoning, the WCAB denied reconsideration.
2 Harvey v Pes Payroll (8/8/07) Opinion & Award of Additional Attorney’s Fees
3 See, for example, WCAB’s 8/8/07 Opinion & Award of Additional Attorney’s Fees in Harvey v Pes Payroll, wherein applicant’s counsel practiced in the fashionable and pricey Santa Monica area. Despite this—and well as the fact that he was (a) a “certified specialist” for over a decade, (b) practicing w.c. “almost exclusively” for over 20 years, and (c) currently “billing” $300/hour for depositions—the Commissioners ruled $250 was “fair.”.
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