Longshore and Defense Base Act Reasonable Hourly Rate Determination
Posted by defensebaseactcomp on February 17, 2011
Longshore Act: Reasonable Hourly Rate Determination – Overview of Recent Decisions
By Yelena Zaslavskaya Senior Attorney for Longshore, Office of Administrative Law Judges U.S. Department of Labor, Washington, D.C.
A. The Governing Law
Section 28 of the Longshore Act, 33 U.S.C.S. § 928, provides for an award of a “reasonable attorney’s fee” to a prevailing claimant’s attorney payable by employer (Longshore and Harbor Workers’ Compensation Act, 33 U.S.C.S. § 901 et seq.).
See also 20 C.F.R. §§ 702.132, 802.203.
Section 702.132(a) provides that a fee application must indicate the normal billing rate for each person who performed services on behalf of the claimant. The regulations further provide that any attorney’s fee approved shall be reasonably commensurate with the necessary work done and shall take into account the quality of the representation, the complexity of the legal issues involved, and the amount of benefits awarded.[FN2] 20 C.F.R. § 702.132(a),
see also 20 C.F.R. § 802.203(e).[FN3] In addition, case law addressing what constitutes a reasonable fee under other federal fee-shifting statutes is also applicable to fee determinations under the LHWCA. See City of Burlington v. Dague, 505 U.S. 557, 120 L. Ed. 2d 449, 112 S. Ct. 2638 (1992); see also Stanhope v. Elec. Boat Corp., 44 BRBS 107 (2010) (and cases cited therein).
- Determination of Reasonable Legal Fee.
- In determining whether a fee is reasonable, a number of factors must be considered. A partial list of factors is provided in subparagraph 7b, below, but it is not all-inclusive. Although there may be a broad agreement on the factors to be considered in setting fees, in practice the standards of what is appropriate compensation for claimant’s counsel vary markedly from one State to another (The Law of Workmen’s Compensation, Arthur Larson). The variation is reflected not only in statutory limits but also in administrative and judicial decisions.
- The following factors should be considered in determining a reasonable legal fee (See 20 C.F.R. section 702.132):
- Usefulness and necessity of the representative’s services to the claimant.
- Nature and complexity of the claim.
- Actual necessary work performed (the itemization showing the dates on which services were performed, brief descriptions of services, time spent on each, and the amount of fees requested. Time spent in preparation of a fee application is a appropriate factor to be considered in the determination of a reasonable attorney fee). (See LHWCA Circular No 97-01).
- Amount of benefits involved.
- Customary local charges for similar services.
- Professional qualifications of the representative.
- When the fee is to be assessed against the claimant, the financial circumstances of the claimant are also to be taken into account.
- Enhancement for extraordinary delay in receiving payment. (See Anderson vs. Director 30 BRBS 67 (CRT) and LHWCA Circular No 97-01).
- Whether the fee is reasonable in relation to the results obtained. [(See Bullock v. Ingalls Shipbuilding 27 BRBS 90, July 16, 1993, for a decision of the two-prong test under Hensley vs. Eckerhart 461 U.S. 424 1983).]
- In considering the factors above, emphasis is given to the factor in subparagraph 7b(1), above. Before considering the other factors, the necessity or usefulness of the representative’s services should be considered. If the necessity for the service is questionable, the fee should be kept to a minimum. Many States prescribe, by statute or administrative regulation, the maximum dollar or percentage amount which can be charged. Others permit a sliding scale which allows certain percentages on various portions of the award.Since almost all States in one way or another regulate the amount of legal fees for claimants’ representatives, any person approving a legal fee under this act should be aware of the various States’ workers’ compensation laws governing attorney’s fees in that DO’s jurisdiction.
- If the requested fee is reduced, the DD must advise the attorney or representative in writing of the reduction, and state the reason(s) for the reduction. This may be stated in the compensation order approving the fee or in a letter accompanying the compensation order; however, any change must be justified. The recipient of a fee for representation of a claimant, if dissatisfied with the amount awarded, may appeal to the Benefits Review Board (BRB) for a review of the award.
- In the absence of collusion, when the parties in arm’s length settlement negotiation have reached an agreement on the amount of the fee which is the responsibility of the employer/carrier, the DD should approve the fee unless it is clearly excessive (Ballard v General Dynamics, 12 BRBS 966 (1980) and Watkins v Ingalls, 26 BRBS 179 (1993)).