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Birmingham Bar Association - Bulletin Fall 2017

Workers’ Compensation Law Michael P. McCready There are no state restrictions to practicing law with federal workers’ compensation cases. Finally, many federal agencies are at a high risk of sustaining work related injuries. Employees of such federal agencies as the United States Postal Service (USPS), the Veterans Health Administration (VA), the Transportation Security Administration (TSA) and the Department of Homeland Security (DHS) are all covered under federal workers’ compensation. Given these factors, there should be a lot of lawyers who handle federal workers’ compensation cases. But there aren’t. Why? First, there are no contingency fees in federal workers’ compensation. In fact, federal law makes it a misdemeanor to charge an injured federal worker a contingency fee. Therefore, all work for federal employees must be billed by the hour with detailed descriptions of the work performed and the time spent. Traditional workers’ compensation and personal injury lawyers are not are no contingency fees in federal workers’ compensation accustomed to keeping track of time and billing clients. Additionally, contingency lawyers will charge a percentage of the recovery, which is forbidden in federal cases. Second, although being able to represent clients nationwide is a positive, when it comes to collecting an unpaid fee for work performed, it is a serious limitation. You can’t be suing people all over the country who do not pay your fee. For this reason, most federal workers’ compensation lawyers charge an upfront retainer. Imagine being injured on the job, perhaps not being paid, and having to send a retainer to a lawyer to represent you in a workers’ compensation case. The contingency tort system is designed to allow everyone access to the courthouse, regardless of economic means. In federal workers’ compensation cases, only those who pay their lawyer have representation. only those who pay their lawyer have representation. Third, assume a client has paid a retainer and you have kept detailed billing records. You are not allowed to transfer the retainer to your operating account until the client has approved the bill. Yes, that’s right, you don’t get paid if the client disapproves of the bill, even if you do the work. In a contingency case, you take the risk that you may not win, and if a contingency lawyer fails to make a recovery, there is no fee. In federal workers’ compensation, you can do the work, and win or lose, you may not get paid if a client does not approve of your fee. you may not get paid if a client does not approve of your fee. Fourth, any compensation received by an injured federal employee is sent directly to the worker, not his or her attorney. In traditional contingency fee practice, you immediately send a notice of attorney lien or letter of representation to protect your right to get paid. Usually, the settlement check is made payable to the lawyer and the client. Not in federal workers’ compensation cases. The check is made payable to the client and mailed directly to the client. As you can imagine, this severely hampers a lawyer’s ability to get paid, and reinforces the need for a retainer. Because the check is mailed to the client, case loan companies will not provide a case advance to pay a retainer. The check is made payable to the client and mailed directly to the client. It should be obvious from the above discussion of federal workers’ compensation why there are so few lawyers handling these cases. The federal government justifies these procedures by proclaiming they want the injured worker to receive as much of the recovery as possible, not an attorney. The prohibition against contingency fees is also meant to protect federal employees from being “overcharged” for legal services. The assurance that attorneys’ fees and the claimant’s recovery are kept separate is part of that protection. But, what they have done is essentially cut lawyers out of the federal system and dethere The federal government justifies these procedures by proclaiming they want the injured worker to receive as much of the recovery as possible, not an attorney. 12 Birmingham Bar Association


Birmingham Bar Association - Bulletin Fall 2017
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