NJ Gov Murphy Signs Law Increasing Workers' Compensation Counsel Fees

NJ Governor Phil Murphy has signed into law legislation that increases counsel fees in Workers' Compensation claims. The law requires the assessment of counsel fees on all offers and tenders made by an employer or insurance companies. The Act is effective immediately. 

Counsel fees are now to be determined in cases in which a workers’ compensation petitioner has received compensation from an insurance company or self-insured employer prior to any judgment or award. The reasonable attorney fee is to based upon the amount of the compensation received after the establishment of an attorney-client relationship (as memorialized in a written agreement), plus any amount of the judgment or award which is in excess of the previously received compensation. Under former law, in such cases involving insurance or self-insurance compensation, the attorney fee was based solely on any amount of a judgment or award that is in excess of the amount of previously received compensation.

This legislation ends the era of voluntary tender and offers (VT) for which no counsel fee could be assessed by the NJ Division of Workers' Compensation. The VT tactic has been used in the past to greatly diminish counsel fees of attorneys representing injured workers and stymied legal representation. The new legislation will level the playing field and provide an incentive to attorneys to represent injured workers. 

Historically, "An offer and tender may be withdrawn or modified by the respondent prior to its full payment. The offer and tender is not binding upon the respondent and is revocable. If the respondent withdraws or modifies the offer prior to the hearing, it will be responsible for a statutory award of the counsel fee to the extent that the final award is in excess of the payment made." Torres v. Miller, 238 N.J.Super. 158, 569 A.2d 301 (App.Div.1990). Gelman, Jon L, Workers’ Compensation Law, 38 NJPRAC 30.2 (Thomson-Reuters 2018).

For specifics on the bill and legislative activity, click here.  

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