gavel.gif (3462 bytes) Workers' Comp. Ruling

Assessment of counsel fees
for lack of reasonable contest

In a workers' compensation case, a claimant or counsel does not have to request assessment of counsel fees for lack of reasonable contest prior to the close of record in order for a workers' compensation judge to have the authority to order such payments, the Pennsylvania Supreme Court ruled in Ramich v. WCAB. In a six to one decision written by Justice Sandra Schultz-Newman, the Court held that "Section 440 in its entirety, does not require a claimant to request a fee award at any point during the workers' compensation proceeding. PaTLA's Marc S. Jacobs wrote the Amicus brief on the case. "The Court has finally confirmed the burden of proof on the issue of reasonable contest is on the employer. The burden is not on the claimant to prove a lack of reasonable contest. The act presumes the employer should pay counsel fees unless they show good cause otherwise," said Jacobs.

The case was brought about when Schatz Electic, Inc. filed an unreasonable contest against a claim filed by Carol and Timothy Ramich. Alvin Ramich, Carol's husband and Timothy's father, was killed in the course and scope of his employment as an electrician for Schatz. He died of asphyxiation while using a gasoline generator at a job site. When Carol Ramich filed a workers' compensation claim, the company contested and lost. Ramich then filed a request for counsel fees to the WCJ after the evidentiary record was closed.

The WCJ awarded Ramich attorney's fees and costs under Section 440 (a) of the Workers' Compensation Act, after determining that Schatz Electric unreasonably contested Ramich's claim. Schatz appealed to the WCAB on the grounds that Ramich did not request attorney's fees before the close of the evidentiary record. The WCAB reversed the WCJ's decision.

Ramich appealed to the Commonwealth Court, which concurred with the WCAB, saying that the request had to be filed before the close of the record. Ramich then appealed to the state Supreme Court, which stated in their opinion, "We conclude that the Commonwealth Court erred and reverse."

"Not only is the request requirement of the Commonwealth Court contrary to the plain language of Section 440, but we also find the reasoning of the court for the requirement unpersuasive."

The Court stated that Section 440 (a) says that when an employer unreasonably contests a claim and the claimant wins, the claimant shall be awarded attorney's fees and costs. "Simply stated, a WCJ must award attorney's fees to a claimant who is victorious over an employer who has presented an unreasonable contest, whether the claimant asked for such fees or not."

The wording in Section 440 (b) requires the WCJ to base the amount of fees awarded on time spent by the claimant's counsel working on the case. "While an argument can be made that Section 440 (b) requires a claimant to request counsel fees while the original record is open, we find that the plain language of Section 440 (b) does not require a claimant to do so."

The state Supreme Court sent the case back to the Commonwealth Court, saying, "we hold that the Commonwealth Court erred in reversing the attorney's fees award because of a failure to comply with a request requirement. We remand this case to the Commonwealth Court with directions to remand to the WCAB for consideration as to whether substantial evidence exists in the record to support the award of counsel fees."

It is still unclear how or when the calculation of the fee will take place. Claimant's attorneys will submit with their findings of fact, an outline of the hours spent on the case and what their requested fee should be.

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