Acting Governor Signs Legislation Increasing Counsel Fees to 25% in Workers’ Compensation Cases

Submitted by New Jersey Workers’ Compensation Lawyer, Jeffrey Hark.

On Thursday, August 22, 2024, Acting Governor Nicholas Scutari signed legislation increasing counsel fees for petitioners’ attorneys from 20% to 25%.  This change in the law is codified in N.J.S.A. 34:15-64. The statute now reads as follows:  “The official conducting any hearing under this chapter may allow to the party in whose favor judgment is entered, costs of witness fees and a reasonable attorney fee, not exceeding 25 percent of the judgment.”

This new counsel fee legislation affects both parties and petitioners’ attorneys. The New Jersey Division of Workers’ Compensation has historically assessed against employers the obligation to pay 60% of the fee of the injured worker.  Injured workers pay 40% of the fee of their own attorney in New Jersey.  While this practice is not codified in any law or regulation, the 60/40 split between employer and injured employee on counsel fees has been followed by judges for well over 70 years.

What does this mean in actual practice?  Consider a hypothetical award of 35% permanent partial disability for a high wage earner.  At 2024 rates, such an award would amount to $110,880.  Assume the Judge of Compensation awards a counsel fee of 25% on a judgment for 35% permanent partial disability:

Total Counsel Fee at 25%:       $27,720
Assessed against respondent:     $16,632
Assessed against petitioner:        $11,088

Compare this to a counsel fee of 20% on an award of 35% permanent partial disability before August 22, 2024:

Total Counsel Fee of 20%:         $22,176.00
Assessed against respondent:     $13,305.60
Assessed against petitioner:        $8,870.40

For Section 20 settlements, the law remains the same.  Injured workers pay the entire counsel fee, now 25% instead of 20%. On a Section 20 settlement of $100,000 a petitioner now pays $25,000 as opposed to $20,000 prior to August 22, 2024.

Undoubtedly, this increased counsel fee percentage will be applied to any Order for Medical and Temporary Disability Benefits.  The law does not specifically mandate that a judge must award 25%, but neither did prior law mandate a percentage of 20%.  In actual practice, the maximum percentage is usually assessed.

The question on everyone’s mind is when does this law take effect?  Most legislation that passes in New Jersey sidesteps this question. This piece of legislation is quite clear: “This act shall take effect immediately and shall apply to all claims pending on or after the date of enactment.”  That means it applies to all cases currently pending in the Division of Workers’ Compensation or filed after August 22, 2024. It does not matter that the case was filed years ago. The key word is “pending.”  If the case settled a month ago, it is no longer pending.  If it is open and unresolved, it is pending.