‘The New Face’ of Iowa: Compensation Changes for Workers’ Comp Attorneys

Des Moines, IA (WorkersCompensation.com) - As part of the overhaul of the Iowa workers’ compensation system, the new law changes the way that workers’ compensation attorneys will be compensated. (Analyses of the bill as a whole can be found here and here.)

As part of House Study Bill 169 and Senate Study Bill 1170, both of which passed on March 16, the following language is added to Section 86.39:

An attorney shall not recover fees for legal services based on the amount of compensation voluntarily paid or agreed to be paid to an employee for temporary or permanent disability under this chapter, or chapter 85, 85A, 85B, or 87. An attorney shall only recover a fee based on the amount of compensation that the attorney demonstrates would not have been paid to the employee but for the efforts of the attorney.

In short, the proposed change requires that in order to recover a fee, the attorney must be able to prove how much additional compensation the claimant received by virtue of the attorney’s involvement. Also, the attorney can only collect based on that portion and not the entire award.

At first blush, this proposed revision would seem to be a big change to the manner of compensation for workers’ compensation attorneys. However, according attorney Dennis McElwain, a partner in the firm of Smith and McElwain and a long-time workers’ compensation attorney in the state, “this attorney fee provision is a mere codification of long-standing written ethical rules that govern Iowa lawyers in workers’ compensation cases,” he said in an email to WorkersCompensation.com.

“Its transfer as such, from the written code of ethics into the Iowa workers’ compensation statute, will change nothing,” he added. The proposed change was not without effect, though, McElwain said. “This piece of proposed legislation gave business and industry a platform for spreading disinformation and lies about how Iowa trial lawyers ‘reap’ hefty fees from innocent victims,” he said.

McElwain further believes that the proposed change will discourage attorneys from representing claimants. “Defense lawyers candidly acknowledge this fact:” he said, “That the proposed legislation is a defense attorney's dream come true. They will continue to bill out their top hourly rates as they deny and delay claims, and as we litigate the meaning of the new law.”

Furthermore, he stated, “various new features serve to disarm the injured worker in the litigation process, shifting the costs of fighting a case onto the injured worker.” 

The fee change, along with many of the other changes in the proposed bill, are similar to other states. However, this fact does not appease McElwain and other claimants’ attorneys. “The Republicans have taken some of the worse features of surrounding states, and assembled them into one ugly face:  the new face of Iowa,” he said. “For long-time Iowa residents, it will be hard to get used to this ugly face as being our own,” McElwain concluded.

Share This Article: