Opinion ID: 1171929
Heading Depth: 1
Heading Rank: 1

Heading: ORS 656.386 and ORS 656.388

Text: ORS 656.386(1) provides: In all cases involving accidental injuries where a claimant finally prevails in an appeal to the Court of Appeals or petition for review to the Supreme Court from an order or decision denying the claim for compensation, the court shall allow a reasonable attorney fee to the claimant's attorney. In such rejected cases where the claimant prevails finally in a hearing before the referee or in a review by the board itself, then the referee or board shall allow a reasonable attorney fee. In the event a dispute arises as to the amount allowed by the referee or board or appellate court, that amount shall be settled as provided for in ORS 656.388(2). Attorney fees provided for in this section shall be paid by the insurer or self-insured employer. (Emphasis added.) At the relevant time, ORS 656.388(2) provided: If an attorney and the referee or board or appellate court cannot agree upon the amount of the fee, each forthwith shall submit a written statement of the services rendered to the presiding judge for the circuit court in the county in which the claimant resides.    There are three prerequisites to the applicability of the attorney fees provision of ORS 656.386(1): (1) the claimant must initiate the hearing process by requesting review from an order or decision denying the claim; (2) the claimant must prevail finally on the issue of compensation (before the forum in which the claimant is the initiating party); and (3) the decision of the referee, board or court in which the claimant prevails finally must be from an earlier decision or order denying, rather than allowing, the claim for compensation. Shoulders v. SAIF, 300 Or. 606, 611-12, 716 P.2d 751 (1986). A claimant prevails finally before a forum if that forum holds in the claimant's favor on the issue of the claimant's right to workers' compensation and that determination is not appealed within the time allowed by statute. For example, [u]nder ORS 656.289(3), the matters determined by [a referee's order become] final unless `within 30 days after the date on which a copy of the order is mailed to the parties, one of the parties requests review by the board under ORS 656.295.' Farmers Ins. Group v. SAIF, 301 Or. 612, 619, 724 P.2d 799 (1986). [2] Had the claimant in this case prevailed finally before the referee on the merits of his workers' compensation claim, leaving only attorney fees in dispute, the circuit court would have been the proper forum to review the referee's award of attorney fees. However, in the present case, SAIF, the employer's insurer, timely sought review of the referee's order. Because the claimant did not prevail finally before the referee, ORS 656.386(1) is not applicable. In this case, and in two companion cases, Guill v. Pendleton Woolen Mills, 305 Or. 21, 749 P.2d 136 (1988) and Short v. SAIF, 305 Or. 102, 750 P.2d 496 (1988), both decided this date, the referees' orders concerning attorney fees were in the orders concerning the merits of the case. We do not dispute the efficiency of that practice. But we must recognize that ORS 656.386 does not authorize a referee to allow a reasonable attorney fee until the claimant prevails finally on the merits. ([W]here the claimant prevails finally   , then the referee or board shall allow a reasonable attorney fee.) (emphasis added.) If the referee issues such an order before the claimant prevails finally, it is interlocutory in nature unless and until the 30-day appeal period runs. [3] If the merits are appealed, the attorney fees issue becomes part of the appeal and the board has authority to determine a proper fee for legal representation before it as well as a proper fee for representation before the referee. Should the claimant successfully defend against the employer's insurer's appeal, as in this case, attorney fees are awarded under ORS 656.382, discussed below.