Arkansas Court Affirms Commission’s Order Requiring Claimant’s Attorney to Receive Half of Fee Over Nine-Year Period

The Court of Appeals of Arkansas has affirmed a determination by the state’s Workers’ Compensation Commission that ruled that a claimant’s attorney must receive one-half the allowed attorney’s fee in periodic installments stretched out over almost nine years–the attorney had already waited five years for the claimant’s award to become final [see Ard v. Death and Permanent Total Disability Trust Fund, 2011 Ark. App. 774, 2011 Ark. App. LEXIS 823 (Dec. 14, 2011).

Following multiple hearings, at least one earlier appeal, and the passage of more than five years, the injured worker ultimately prevailed before the Commission and was found to be permanently and totally disabled as the result of a compensable back injury. The worker’s attorney was entitled to a fee, half of which was payable by the employer’s insurer and half of which was payable by the worker out of her compensation benefits under Ark. Code Ann. § 11-9-715(a)(2)(B). When the attorney filed a request for payment of his fee in a lump sum, the employer’s insurer agreed to pay its share of attorney’s fees in a lump sum. The Death and Permanent Total Disability Trust Fund, which was paying the worker’s portion of the attorney’s fee out of the compensation that it was paying to the worker, did not agree. The Fund argued that a lump-sum payment of attorney’s fees would force it to assume the risk of overpayment should either the worker or the attorney die or should the worker otherwise become ineligible to receive benefits prior to the Fund’s ability to recoup the lump-sum payment out of weekly benefits being paid to the appellant. 

The administrative law judge found the request to be reasonable, observing that the appellant was only fifty-five years old and that the requested lump-sum payment could be recouped in 8.82 years.  The judge ordered the Fund to pay the appellant’s portion of the attorney’s fee in a lump sum. On de novo review, the Commission noted that approval of a lump-sum attorney’s fee was discretionary with the Commission, found that the worker failed to present any compelling reason for the Commission to order the Fund to pay attorney’s fees in a lump sum, and denied the request.  The worker (and her attorney) appealed.

The appellate court affirmed, noting that the issue was not whether the attorney was entitled to fees, but whether the attorney was entitled to receive payment of those fees in a lump sum from both the employer’s insurer and the Fund. Nothing in § 11-9-716 required the Commission to approve a lump-sum payment of the entire amount of an attorney’s fee.  The statute similarly did not prohibit the Commission from approving a plan by which an attorney’s fee was paid partly by lump sum and partly in installments.  The appellate court declined to interfere with the Commission’s determination on the issue of attorney’s fees where there was no abuse of discretion.