If you have a workers’ compensation claim, you might be concerned that you cannot afford to hire a lawyer. Fortunately, New Jersey limits the amount that lawyers can charge for workers’ comp cases. Because of these protections, most injured workers can afford to hire an experienced workers’ comp lawyer.
How Does a Workers’ Comp Lawyer Charge?
In New Jersey, all workers’ compensation lawyers are paid on a contingency fee basis. This means that the lawyer is not paid unless you settle your case or receive an order from a workers’ comp judge granting benefits. Instead of charging you an hourly rate for his or her services, the lawyer gets a portion of your settlement or your award. Additionally, most workers’ compensation lawyers will meet with you for an initial consultation for free.
What Is the Most a Workers’ Compensation Lawyer Can Charge?
In New Jersey, the maximum contingency fee in a workers’ comp case is 20%. However, only a portion of this fee will come out of your settlement or award. A workers’ compensation judge will divide the attorneys’ fees between you and the insurance company. Typically, you will pay 40% of the fee and the insurance company will pay 60%. In other words, only 8% of your overall settlement or award will go towards paying your lawyer.
Sometimes, a lawyer will agree to a fee that is lower than the maximum rate. However, this is rare because the maximum fee is relatively low and because workers’ compensation claims often involve a lot of work. However, if your dispute is minor and your claim can be quickly resolved, your lawyer may agree to a reduced fee. (For more information, see Can I Negotiate the Attorneys' Fees in My Workers' Compensation Case?)
How Are Legal Costs Handled?
Legal costs are different than attorneys’ fees; they are the costs of pursuing your case. These costs include expert witness fees (for example, for doctors who testify at a deposition or hearing), court reporter fees for transcribing depositions, and filing fees for appeals.
New Jersey law also places limits on certain legal costs in workers’ comp cases, such as expert witness fees. For example, a treating physician can only charge up to $450 for a medical report and up to $300 per hour for testimony at a deposition or court hearing.
While your lawyer can try to limit legal costs, they are usually unavoidable. Preparing a workers’ compensation case for trial typically requires developing medical evidence and expert testimony. Without this evidence, it could be impossible to win your claim.
Most workers’ comp lawyers will not ask you to cover costs up front. Instead, they will pay for legal costs and then deduct them from your settlement or award. Additionally, most lawyers will forgive the costs if you don’t receive a settlement or award. However, this is not always the case, so be sure to ask your lawyer about how costs are handled before you hire him or her. (For more information, see Who Pays for the Costs of Pursuing a Workers’ Compensation Case?)
How Much Will I Get After Attorneys’ Fees and Costs?
You should discuss fees and costs with your lawyer at your initial consultation, before signing a fee agreement. If you are considering a settlement, your lawyer should also explain how much will be deducted in attorneys’ fees and costs. Below is an example of how a typical settlement might be distributed.
Example: A lawyer negotiates a $100,000 settlement in a disputed claim. The lawyer spent $2,500 on depositions, expert witness fees, and other costs. A workers’ comp judge might approve the following distribution:
- $2,500 in costs to the lawyer
- $19,500 in attorneys’ fees (the maximum fee of 20%, after costs)
- $11,700 is paid by the insurance company (60% of the fee)
- $7,800 is paid by the injured work (40% of the fee), and
- $78,500 to the worker.
Additional sums might be withheld from your portion of the settlement for unpaid medical bills, unpaid child support, and Medicare set-aside agreements. However, under New Jersey law, workers’ compensation benefits are not taxable. (For more information, see our article on what might be taken out of workers’ comp settlements.)
How Are Attorneys’ Fees Approved?
The New Jersey Division of Workers’ Compensation must approve your lawyer’s fees. In fact, it is illegal for a lawyer to accept a fee without the Division’s approval. If your case goes to trial, the Division will approve fees and costs in the written decision. If your case settles, legal fees and costs will be included in the settlement paperwork, which must be reviewed and approved by the Division.