Court Opinion

ID: 9689624
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:41:37.342824+00
Date Added: 2024-06-11T18:18:50.852886
License: Public Domain

Blair Moody, Jr., J.
We granted leave to appeal and consolidated the following three cases: Franges v General Motors Corp, 398 Mich 810 (1976); Schalk v Michigan Sewer Construction Co, 398 Mich 810 (1976); Betker v General Motors Corp, 398 Mich 810 (1976).
Each of these cases involves a recovery by an employee/personal representative and his employer/insurance carrier against a third-party tortfeasor. The common issue presented is whether and to what extent the dollar amount credited to the employer as advance payment of future workers’ compensation benefits should be included in computing the share of recovery expenses (legal fees and costs) attributable to the employer or its workers’ compensation insurance carrier. MCLA 418.827; MSA 17.237(827).
*602Facts
Certain common elements appear in these three cases. In each case, the intervenor, the individual workers’ compensation insurance carrier, has appealed the trial court’s apportionment of settlement1 recovery expenses reached in the third-party tortfeasor action. While computing the apportionment of total expenses by slightly different methods, all three trial judges basically followed the reasoning of Crawley v Schick, 48 Mich App 728; 211 NW2d 217 (1973). In determining the interests of the insurance carrier, each court included the dollar amount credited as advance payment of future workers’ compensation benefits.

Franges

In February of 1970, the plaintiff, Joseph Franges, Jr., an employee of a company insured by Michigan Mutual Liability Company, sustained a work-related injury on the premises of General Motors Corporation. The Worker’s Disability Compensation Bureau issued an open-end award2 requiring plaintiff’s employer through its carrier Michigan Mutual to pay workers’ compensation benefits at the rate of $104 per week for Franges’ life or until his disability ended.
Two years later, a third-party damage action against defendant General Motors Corporation was filed and Michigan Mutual intervened as a party plaintiff pursuant to § 827 of the Worker’s Disability Compensation Act. On December 13, 1974, *603plaintiffs-appellees3 settled their cause of action against the defendant for $120,000 and on April 7, 1975, an opinion and order for disbursement of funds were filed by the Wayne Circuit Court as follows:
Gross Recovery $120,000.00
Insurer’s Reimbursement — 27,184.03
Total Cost of Recovery — 40,807.17
Advance Payment Credit $ 52,008.80
The total cost of recovery was apportioned between the parties as follows:
Employee’s Pro Rata Share (34%) $ 13,874.55
Insurer’s Pro Rata Share (66%) 26,932.62
Total Cost of Recovery $ 40,807.17
The Court of Appeals in an unpublished per curiam opinion affirmed the disbursement of the trial court on March 30, 1976.

Schalk

Plaintiff-appellee, Allen Schalk, also received injuries during the course of his employment. Plaintiff brought a negligence action against the defendants as third-party tortfeasors and the workers’ compensation insurance carrier, Aetna Casualty and Surety Company, intervened. This action resulted in a settlement of $125,000 of which plaintiff’s wife, Mildred Schalk, received $15,000 and the injured plaintiff $110,000. On July 1, 1974, an order was entered apportioning the cost of recovery and approving the distribution of settlement proceeds as follows:
Gross Recovery4 $110,000.00
Insurer’s Reimbursement — 22,588.13
Total Cost of Recovery — 38,832.95
Advance Payment Credit $ 43,411.87
*604The total cost of recovery was broken down between the parties as follows:
Employee’s Pro Rata Share (40%) $ 15,533.18
Insurer’s Pro Rata Share (60%) 23,299.77
Total Cost of Recovery $ 38,832.95
The Court of Appeals determined that the trial judge incorrectly applied the Crawley formula. The insurer’s pro rata share should have been 64.6973% or $25,122.87, and $48,578.92 should have been treated as advance payment credit. Nevertheless, the court affirmed the awards since the employee failed to contest the decision. 62 Mich App 658; 233 NW2d 825 (1975).

Betker

This cause of action arose out of the accidental death of plaintiff-appellee’s husband, Ralph Betker. Mr. Betker, an employee of Carlson Brothers, Incorporated, fell 40 feet to his death while attempting to repair a heating and ventilation unit located in the defendant General Motors Corporation’s Fisher Body plant. Plaintiff-administratrix, Gloria Betker, commenced a wrongful death action and Hardware Mutual Casualty Company, Carlson Brothers’ workers’ compensation carrier, intervened as a party plaintiff. While a trial on the merits was in progress, the parties agreed to settle the suit for $150,000. The Oakland Circuit Court’s order apportioning the costs of recovery and distributing the proceeds was entered on December 12, 1974, as follows:
Gross Recovery $150,000.00
Insurer’s Reimbursement — 23,825.20
Total Cost of Recovery — 57,131.99
Advance Payment Credit5 $ 19,935.00
*605The total cost of recovery was apportioned between the parties as follows:
Employee’s Pro Rata Share (70.83%) $ 40,466.59
Insurer’s Pro Rata Share (29.17%) 16,665.40
Total Cost of Recovery $ 57,131.99
On August 2, 1976, the Court of Appeals granted plaintiff-administratrix’s motion to affirm the disbursement of the trial court.
Discussion
The basic issue before this Court is whether the employer or its insurance carrier in a third-party action is entitled by statute to a credit against workers’ compensation benefits potentially payable in the future, without sharing the burden of the recovery expenses (attorney fees and costs).
The statutory provisions concerning litigation expenses incurred in actions against third-party tortfeasors which have been referred to the courts for interpretation fall into three general classifications:
(1) those statutory provisions which contain no express reference to attorneys’ fees and costs incurred by the employee in the third-party tort action;
(2) those statutes which provide for the deduction from the third-party recovery fund of the attorneys’ fees and costs incurred by the employee in the third-party litigation, but which do not expressly provide for the apportionment of such fees and costs between the employee and the employer or insurance carrier;
(3) those statutory provisions which contain an *606express direction that the attorneys’ fees and costs incurred by the employee in the third-party tort action should be apportioned between the employee and the employer or compensation insurance carrier.
Anno: Workmen’s Compensation: Attorney’s Fee or Other Expenses of Litigation Incurred by Employee in Action Against Third Party Tortfeasor as Charge Against Employer’s Distributive Share, 74 ALR3d 854.
In 25 jurisdictions, including Michigan, "when the suit is brought or recovery is effected by the employee, and sometimes in all cases, the carrier is obligated to pay a portion of the attorney’s fee out of his share, usually in proportion to his share of the recovery”. 2A Larson, Workmen’s Compensation Law, § 74.32.6
Section 827 of the Worker’s Compensation Act of 1969, MCLA 418.827; MSA 17.237(827), sets forth *607the procedure that must be followed in Michigan suits against third-party tortfeasors. Subsections 5 and 6, the controlling provisions for these cases, prescribe how the judgment is to be divided. Since the Michigan statute fits firmly into the third category, we will evaluate only those interpretations of statutory provisions which contain express directions for apportionment of recovery expenses between the employee and the employer or insurer.
Within this third category of statutory provisions, three general approaches have been developed by the courts in dealing with the problem of whether the future compensation credit should be included as an interest of the insurer when computing the apportionment of fees.
One approach is that the employer’s pro-rata share of expenses should be based upon the total benefit realized — including reimbursement for compensation benefits already paid to the employee and relief from future compensation liability. This view will be generically referred to as the Pennsylvania approach. It has been followed in a number of jurisdictions across the country,7 and is the basis for the Crawley v Schick formula of our *608own Court of Appeals. The Pennsylvania approach was generally applied in each of the instant cases by the trial court and approved by the Court of Appeals.
A second approach, which we will label the Missouri approach,8 is that the employer’s share should be based exclusively upon the amount of reimbursement for compensation benefits already paid. This approach to apportioning recovery expenses does not take into consideration credit for any future compensation liability. The rationale for adopting this second view, despite the potential windfall to the insurer in receiving future credit without incurring the normal expenses of recovering that credit, is based upon the contingent nature of the benefit to the insurer.
A recent New Jersey case9 and a Pennsylvania Federal district court decision10 illustrate what we believe to be a third, more equitable view. This third approach, "pari passu”,* 11 provides a means whereby the employer and insurer pay their share as they receive their benefit and follows the statutory requirement that the employer and insurer *609pay a proportionate share of the recovery expenses.
Thus, in interpreting the Michigan statutory language in question, we are mindful of the three basic approaches for apportioning the costs of producing dollars which represent future compensation credit.
Statutory Construction
Subsections 5 and 6 of MCLA 418.827; MSA 17.237(827) prescribe how the third-party judgment is to be divided:
"(5) In an action to enforce the liability of a third party, the plaintiff may recover any amount which the employee or his dependents or personal representative would be entitled to recover in an action in tort. Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or carrier for any amounts paid or payable under this act to date of recovery and the balance shall forthwith be paid to the employee or his dependents or personal representative and shall be treated as an advance payment by the employer on account of any future payments of compensation benefits.
"(6) Expenses of recovery shall be the reasonable expenditures, including attorney fees, incurred in effecting recovery. Attorney fees, unless otherwise agreed upon, shall be divided among the attorneys for the plaintiff as directed by the court. Expenses of recovery shall be apportioned by the court between the parties as their interests appear at the time of the recovery.” (Emphasis added.)
Appellant insurers argue that subsection 5 establishes the following priorities for the distribution of a recovery against a third party:
*610(1) deduction of recovery expenses, including attorney fees, deemed to be reasonable;
(2) reimbursement to the carrier for past benefits paid;
(3) and distribution of any balance to the employee, to be credited against any future benefits to which the employee would be entitled as a result of his injury.
In support of this priority system the insurers refer us to the Delaware statutory provisions12 which are virtually identical to MCLA 418.827(5), 418.827(6); MSA 17.237(827X5), 17.237(827X6), and to the Delaware Supreme Court’s interpretation of those provisions in Cannon v Container Corp of America, 282 A2d 614, 616 (Del, 1971). The Delaware Court held that the three priorities previously referred to were clearly established by the Delaware provisions. In addition, that Court not only approved a 100% reimbursement to the compensation carrier of monies previously paid in benefits, but further held that the insurer did not have to pay any portion of the costs of recovery.
We cannot accept that reasoning of the Dela*611ware Court which ignores completely the final sentence of subsection (f): "The expenses of recovery above mentioned shall be apportioned by the court between the parties and as their interests appear at the time of said recovery.” 19 Del Code 2363(f). The mirror language in the Michigan statute is the final sentence of subsection 6: "Expenses of recovery shall be apportioned by the court between the parties as their interests appear at the time of the recovery.” MCLA 418.827(6); MSA 17.237(827X6).
The Delaware priority system does not take into account the apportionment of recovery expenses between the insurer and the employee required by the final sentences of the Delaware and Michigan statutes. Those sentences make apparent the intent of the state legislatures to require the court to apportion the recovery expenses.
On numerous occasions, this Court has discussed the rule of construction to be employed when interpreting statutory language in order to determine legislative intent. In construing legislative intent it is mandatory, if possible, to construe an act as a whole, thus avoiding the construction of one provision in such a manner as to negate another. Joslin v Campbell, Wyant & Cannon Foundry Co, 359 Mich 420; 102 NW2d 584 (1960). Subsection 5, which spells out how judgments in third-party workers’ compensation cases are to be divided, cannot be read to establish strict priorities for distribution in view of the mandatory nature of the word "shall”13 in the final sentence of subsection 6. Such a reading of subsection 5, which establishes the system of priorities adopted in Cannon, supra, would render void the language of *612subsection 6 requiring the apportionment of expenses.
Another frequently applied rule of statutory construction is that statutes should be construed to prevent absurdity, hardship, injustice or prejudice to the public interest. Gardner-White Co v State Board of Tax Administration, 296 Mich 225; 295 NW 624 (1941); Zawacki v Detroit Harvester Co, 310 Mich 415; 17 NW2d 234 (1945); General Motors Corp v Unemployment Compensation Commission, 321 Mich 604; 33 NW2d 90 (1948). Therefore, in order to fairly interpret the provision governing the apportionment of expenses, it is necessary for us to examine these concepts in light of the purpose for providing an opportunity for recovery against third-party tortfeasors.
Under the various state workers’ compensation systems the cost of industrial injuries is shared by the employee and industry, and the employee absorbs a substantial portion of his loss. Atleson, Workmen’s Compensation: Third Party Actions and the Apportionment of Attorney’s Fees, 19 Buffalo L Rev 515, 520 (1970). As stated in Arthur Larson’s classic treatise on workers’ compensation law:
"A compensation system, unlike a tort recovery, does not pretend to restore to the claimant what he has lost; it gives him a sum which, added to his remaining earning ability, if any, will presumably enable him to exist without being a burden to others.” 1 Larson, Workmen’s Compensation Law, § 2.50.
As pointed out by Professor Allan McCoid, one of the major reasons for retention of rights against third parties, despite the general acceptance of the enterprise liability concept of workers’ compensation laws, is protection of the worker and his *613family. The retention of such rights acknowledges that benefits provided by existing compensation acts are not expected to be full payment for all losses suffered. McCoid, The Third Person in the Compensation Picture: A Study of the Liabilities and Rights of Non-Employers, 37 Texas L Rev 389, 401 (1959).
Additionally, another primary aim of this legislation is to provide the insurer a right to recover from the tortfeasor compensation expenditures. The Michigan statute provides that in the event the injured employee does not commence a third-party action within one year after the occurrence of the injury, the employer or insurer can proceed to enforce the interest of such employee.14
Accordingly, we believe that one of the major purposes for the Legislature permitting actions by both the injured employee and the insurer is to provide the opportunity for full recovery by each and thereby place the liability for the injury and the resulting cost upon the negligent party.15
Pursuant to the statute, past compensation pay*614ments made by the insurer to the employee are to be recovered by the insurer before the employee may benefit. Nevertheless, any decision on our part which would require a non-negligent injured employee to bear the full burden of recovery expenses, including a recovery that excuses a compensation insurer’s future obligation, is contrary to this legislative purpose. The injured employee would thereby receive less than his full share of the recovery (after deduction of apportioned expenses).
Likewise, a determination that would obligate the insurer to pay recovery expenses attributable to amounts credited as advance payment of future compensation liability, when future compensation payments may never be required, would also be contrary to the legislative purpose. The insurer would thereby receive less than its full share of the recovery (after deduction of apportioned expenses).
We view the crux of the issue presented by these cases as being a determination of what the Legislature intended by the use of the word "interests” within the statutory language: "as their [the employee or his representative and the employer or its insurance carrier] interests appear at the time of the recovery.” MCLA 418.827(6); MSA 17.237(827X6).
Subsection 5 sets forth the three "interests” of the parties that "appear” in a recovery from a third-party tortfeasor and, thus, defines the word "interests” as it is used in the final sentence of subsection 6. The employee or his dependents or personal representative has only one interest which may appear, a lump sum dollar recovery that is treated as an advance payment of future compensation benefits. The employer or its insur*615anee carrier may receive two interests in any given third-party action. First, there is the reimbursement interest: the refunding of monies previously paid or payable as workers’ compensation benefits as of the date of judgment. Additionally, a second interest appears when the dollar amount of recovery exceeds the insurer’s reimbursement. That interest is a dollar amount obtained by the employee but treated by the employer or insurer as a future credit against payment of additional compensation benefits.
Since the excess received by the employee is also an interest of the insurer which appears at the time of recovery and excuses future workers’ compensation liability, the insurer must bear the cost of receiving its part of the benefit of this interest. In view, however, of the contingent quality of this interest, we hold that payment of the apportionment percentage of total costs based upon gross recovery will be made as this interest of the insurer becomes dollars credited against compensation liability.
Accordingly, we conclude that the third view mentioned heretofore, e’pari passu”, is the approach which best reflects the intention of the Legislature to effectuate the purposes of the Worker’s Disability Compensation Act.
This conclusion is buttressed by two other considerations. First, if we were to adopt the Missouri approach, we would be requiring the trial judge to disregard completely the interest which the insurer receives as future credit. Such an approach would ignore the statutory language and give a windfall to the insurer. It would also encourage delays at the trial court level and favor employees in the metropolitan areas where clogged civil dockets delay trials for years, while disadvantaging *616employees in sparsely populated areas of the state. As stated in Kroll v Hyster Co, 398 Mich 281, 299; 247 NW2d 561 (1976) (opinion by Williams, J.):
"If the interest of the insurer, and therefore its share of the expenses, is calculated on the basis of the amount of benefits the insurer had paid the employee at the time of recovery, delay becomes the ally of the employee. The longer the period of time which passes before the time of recovery, the more benefits the insurer will have actually paid at the time of recovery, and therefore the greater the share of the expenses it will have to carry. It is very difficult to believe that the Legislature intended to create a situation where an aggrieved party would be rewarded for delaying a suit until long after the cause of the grievance, and for prolonging the course of litigation.
"Moreover, employees in virtually identical situations would have substantially different recoveries because one employee brought his suit in a court where docket congestion was particularly a problem, causing an unintentional delay in the time of recovery which will in turn increase the share of the expenses the insurer will be liable for.”
Conversely, the Pennsylvania view as reflected by Crawley and applied by the trial courts in these cases requires the trial judge in most instances to include the total net recovery initially received by the employee as an interest of the insurer when calculating the insurer’s share of expenses. This could result in a potential windfall to the employee in view of the contingent nature of the future credit. The insurer could be charged for expenses but, due to happenstance, may never receive the benefit of the full advance payment credit.
Neither result is compatible with the purpose of the legislation. Therefore, we interpret subsections 5 and 6 as requiring a six step post-recovery *617procedure when the parties themselves cannot agree upon a division of the recovery expenses. In working through this step-by-step procedure, the Franges facts will be employed for illustrative purposes.
I. Apportionment Percentage
The statutory language of subsection 6 makes it clear that "expenses of recovery” include costs plus reasonable attorney fees. Therefore, the trial court must first determine what would be a reasonable attorney fee before dividing that fee between the attorneys for the plaintiffs.
As the statute indicates, if the division of attorney fees has been agreed upon or stipulated to by counsel, then as long as the fee percentage of recovery is not excessive under the guidelines of GCR 1963, 928, the agreement will govern the division of fees.16 However, if there is no such *618agreement, the attorney fees "shall be divided among the attorneys * * * as directed by the court”.
In Kroll, supra, 295, Justice Williams set forth succinctly the factors to be considered by the trial court in dividing attorney fees:
"The court in making the division should consider the value of the services performed by attorneys, the agreement each attorney had with his client, and the necessity of ensuring that attorneys working on a contingent fee basis are compensated sufficiently to ensure that the incentive to take third-party actions on such a fee basis is protected. If the total reasonable attorneys’ fees determined by the court are less than the sum of the amounts originally agreed to by the attorneys and their clients, the fees of both attorneys should be appropriately reduced, assuming the insurer’s attorney contributed in the preparation and trying of the suit.”
In Franges, the parties do not dispute the division of fees or the reasonableness of expenditures.17 *619The total cost of recovery amounted to $40,807.17.
Once the total cost of recovery is ascertained, the division of those expenses between the plaintiffs must be determined. Since subsection 6 requires the expenses of recovery to be apportioned between the insurer and the employee, the first step is to determine what percentage of the gross recovery the total expenses of recovery represent. This "apportionment percentage” is computed by dividing the gross recovery into the total cost of recovery:
Total cost of recovery $40,807.17
Gross recovery of $120,000.00
= Apportionment Percentage of 34.005975%
II. Insurer’s Reimbursement
The trial court must then determine the amount to reimburse the insurer for compensation previously paid. The insurer in Franges had paid $27,184.03 in compensation benefits as of the date of settlement:
Insurer’s Reimbursement $ 27,184.03
III. Apportionment of Expenses for Reimbursement Interest
The insurer’s portion of the costs of recovery representing its reimbursement interest is determined by multiplying its reimbursement recovery by the apportionment percentage:
Insurer’s Reimbursement $ 27,184.03
Apportionment Percentage X .34005975
Insurer’s Share of Cost of Reimbursement Recovery $ 9,244.19
*620IV. Employee’s Recovery
By statute the amount remaining after reimbursement is received by the employee, his dependents or personal representative. Thus, the total recovery less the insurer’s reimbursement equals the employee’s recovery:
Gross Recovery $120,000.00
Insurer’s Reimbursement — 27,184.03
Employee’s Recovery $ 92,815.97
V. Apportionment of Expenses for Employee’s Recovery
This portion of recovery expenses is determined by multiplying the balance of the recovery (the employee’s recovery) by the apportionment percentage. Although the insurer may ultimately receive the benefit, this share of recovery expenses is initially borne by the employee since he initially receives the benefit:
Employee’s Recovery $ 92,815.97
Apportionment Percentage (34.005975) X .34005975
Employee’s Share of Cost of Recovery $ 31,562.98
VI. Insurer’s Future Credit
By statute, the dollar amount actually received by the employee, his dependents or personal representative is treated as a credit against any future compensation the employer or insurer would have been required to pay but for the third-party recovery. Therefore, the total recovery less the insurer’s reimbursement and the employee’s share of cost of recovery equals the insurer’s future credit:
*621Gross Recovery $120,000.00
Insurer’s Reimbursement - 27,184.03
Employee’s Share of Cost of Recovery -31,562.98
Insurer’s Future Credit $ 61,252.99
The cost of recovery amount deducted in the example above does not include the insurer’s share of cost of reimbursement recovery (see III, supra) since that dollar amount is paid out of the insurer’s reimbursement. The inclusion of that sum of $9,244.19 in the cost of recovery subtraction would amount to a double subtraction of the insurer’s share of cost of reimbursement recovery. Such a procedure would disadvantage the insurer by further reducing the amount of the insurer’s future credit, thereby resulting in earlier exhaustion of the future credit and earlier resumption of the insurer’s liability to pay compensation benefits.
VII. Apportionment of Recovery Expenses for Future Compensation Credit
Along with the actual recovery which benefits the employee, an interest which benefits the insurer is discernible at the time of settlement or judgment. That contingent future interest18 is the dollar amount recovered by the employee after payment of recovery costs and credited to the insurer as advance payment of future compensation benefits. In fact, this contingent interest begins to accrue and to vest the first day after settlement, provided the employee would have qualified for continued compensation but for the third-party tortfeasor recovery.
Therefore, we decide that when and as the insurer’s contingent interest becomes a liability but *622for the third-party recovery, the insurer must reimburse the employee for the expenses of recovery chargeable to that amount. This shall be accomplished by multiplying each credit as it accrues by a second apportionment percentage to arrive at an amount the insurer must then pay to the employee.
This second apportionment percentage is computed by dividing the employer’s or insurer’s future credit into the employee’s share of cost of recovery.
Employee’s Share of Cost of Recovery $31,562.98
= Apportionment Percentage for reimbursement to employee for cost of recovery 51.52888%
Employer’s-Insurer’s Future Credit $61,252.99
According to the existing order of the Worker’s Compensation Bureau, employee Franges is to
receive an award of $104 per week for the rest of his life or until his disability ceases. Thus, each week Franges is entitled to receive compensation benefits but for the third-party recovery, the insurer must pay the following to the employee:
Employee’s Compensable Wage Loss $ 104.00
Apportionment Percentage (51.52888%) X .5152888
Reimbursement to Employee by Insurer for Cost of Recovery $ 53.59 per week19
Until the future credit is exhausted, the same formula applies to all other claims compensable under the Worker’s Disability Compensation Act. *623The insurer will reimburse the employee an amount equal to any of the employee’s future expenses which are compensable under the act multiplied by the second apportionment percentage, the apportionment percentage for reimbursement to the employee for cost of recovery.
Conclusion
The foregoing seven steps are to be applied to the two other cases under consideration. These cases are remanded to the trial court for a redivision of the respective recoveries consistent with this opinion. This opinion and its apportionment formulae are to be applied prospectively. Only those cases pending on appeal in which this issue has been specifically raised are subject to this determination. Remanded for further proceedings; jurisdiction is retained.20
No costs, neither party prevailing in full.
Kavanagh, C.J., and Williams, Fitzgerald, Ryan, JJ., concurred with Blair Moody, Jr., J.
Kavanagh, C.J.
I have signed Justice Moody’s opinion because I am now persuaded that the construction for which I wrote in Kroll v Hystér Co, 398 Mich 281; 247 NW2d 561 (1976), is too limited.

 Although each of the consolidated cases involves a settlement or consent judgment, this opinion applies equally to jury and non-jury judgments.

 An open-end award is one which grants compensation to an employee for an indefinite period of time or so long as the facts on which the award was predicated continue.

 Constance Franges, the wife of the injured employee, joined in the action but did not receive an individual award in the settlement.

 The gross recovery figure does not include the $15,000 amount in the settlement representing plaintiff-wife’s recovery for loss of consortium.

 Unlike the advance payment credit amounts in the Franges disbursement order and in the Schalk Court of Appeals opinion, the *605$19,935 credit is not equal to the gross recovery minus the insurer’s reimbursement and total cost of recovery. Franges and Schalk involve open-end compensation benefits; this case involves survivor’s benefits with a specific dollar amount ceiling.

 2A Larson, Workmen’s Compensation (Supp, 1977), § 74.32, p 14-233 lists the applicable statutes as follows:
’’Alabama: Ala Code tit 26, § 312. Florida: Fla Stat Ann 440.39. Hawaii: Hawaii Rev Stat 386-8. Idaho: Idaho Code 72-223. Illinois: Ill Ann Stat ch 48, § 138.5 (Smith-Hurd). Indiana: Ind Stat Ann 22-3-2-13 (Burns). Kansas: Kan Stat Ann 44-504, only as to employer’s subrogation suit. Kentucky: Ky Rev Stat 342.700. In employee’s suit, employer is subrogated to entire amount less attorneys’ fees. Maryland: Md Ann Code art 101, § 58. As to employer’s suit see fn 54, supra, this subsection, under Maryland. Michigan: MCLA 418.827 [MSA 17.237(827)]. Apportionable as interests of parties appear. Minnesota: Minn Stat Ann 176.061. Missouri: Mo Ann Stat 287.150 (Vernon). Nebraska: Neb Rev Stat 48-118. Aliter, if no notice of suit is given. New Hampshire: NH Rev Stat Ann 281:14. Apportioned by court 'as justice may require’. New Jersey: NJ Stat Ann 34:15-40. New York: See reference to amendment in discussion of Koutrakos v Long Island College Hospital [47 AD2d 500; 368 NYS2d 528 (1975)] fn 54, supra, this subsection, under New York. North Carolina: NC Gen Stat 97-10.2. North Dakota: ND Cent Code 65-01-09. Pennsylvania: Pa Stat Ann tit 77, § 671. Rhode Island: RI Gen Laws Ann 28-35-58. South Dakota: SD Compiled Laws Ann 62-4-40. Texas: Texas Rev Civ Stat Ann art 8307, § 6a (Vernon). Employer pays fees of employee’s attorney in employee’s third-party suit. Utah: Utah Code Ann 35-1-62. Virginia: Va Code Ann 65.1-43. Washington: Wash Rev Code Ann 51.24.010.”

 The Pennsylvania approach has been adopted by the following states: Pennsylvania, New Jersey, Nebraska, Indiana, Minnesota, Utah and Virginia. Cases holding that the insurer’s future credit is to be included when apportioning recovery costs between the insurer and the employer include:
Anderson v Twin City Lines, 289 Minn 11; 182 NW2d 193 (1970); Indiana State Highway Commission v White, 259 Ind 690; 291 NE2d 550 (1973); Zuchowski v John S. Marvin Building Co, 197 Pa Super 520; 179 A2d 239 (1962); Wall v Conn Welding & Machine Co, 197 Pa Super 360; 179 A2d 235 (1962); Caputo v Best Foods, Inc, 17 NJ 259; 111 A2d 261 (1955); McMullen v Maryland Casualty Co, 123 NJ Super 248; 302 A2d 181 (1973); Prettyman v Utah State Department of Finance, 27 Utah 2d 333; 496 P2d 89 (1972); Gillotte v Omaha Public Power Dist, 189 Neb 444; 203 NW2d 163 (1973); Sheris v Travelers Insurance Co, 491 F2d 603 (CA 4, 1974), cert den 419 US 831; 95 S Ct 54; 42 L Ed 2d 56 (1974) (applying Virginia law).

 The Missouri Supreme Court adopted this second approach in the case of Ruediger v Kallmeyer Brothers Service, 501 SW2d 56 (Mo, 1973).

 The New Jersey court in Pagan v Hillside Metal Products, Inc, 140 NJ Super 154, 160; 355 A2d 690, 693 (1976), applied this third approach stating:
"The obligation of the carrier to pay to petitioner a pro rata share of the attorney’s fee only arises when a weekly payment otherwise due need not be paid due to the third-party recovery. There is no statutory basis for compelling the carrier to make payments to petitioner which it might not he required to make should the petitioner suffer an untimely demise and leave no dependents surviving.”

 DiVirgilio v Norton Co, 344 F Supp 552 (WD Pa, 1972).

 The Latin phrase "pari passu", meaning by equal progress or ratably, was used by the Pennsylvania Federal district court to describe the method of reimbursement payment by the employer to the employee for recovery expenses previously paid by the employee attributable to future compensation credit as and when the credit matures. DiVirgilio, supra, 554.

 19 Del Code 2363(e), 2363© states:
"(e) In an action to enforce the liability of a third party, the plaintiff may recover any amount which the employee or his dependents or personal representative would be entitled to recover in an action in tort. Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or its workmen’s compensation insurance carrier for any amounts paid or payable under the workmen’s compensation act to date of recovery, and the balance shall forthwith be paid to the employee or his dependents or personal representative and shall be treated as an advanced payment by the employer on account of any future payment of compensation benefits.
"ffi Expenses of recovery shall be the reasonable expenditures, including attorney fees, incurred in effecting such recovery. Attorney fees, unless otherwise agreed upon, shall be divided among the attorneys for the plaintiff as directed by the court. The expenses of recovery above mentioned shall be apportioned by the court between the parties as their interests appear at the time of said recovery.”

.See Smith v School District No 6, Fractional, Amber Twp, 241 Mich 366; 217 NW 15 (1928).

 MCLA 418.827; MSA 17.237(827) provides in part:
"(1) * * * If the injured employee or his dependents or personal representative does not commence the action within 1 year after the occurrence of the personal injury, then the employer or carrier, within the period of time for the commencement of actions prescribed by statute, may enforce the liability of such other person in the name of that person. Not less than 30 days before the commencement of action by any party under this section, the parties shall notify, by certified mail at their last known address, the bureau, the injured employee, or in the event of his <leath, his known dependents or personal representative or his known next of kin, his employer and the carrier. Any party in interest shall have a right to join in the action.
"(2) Prior to the entry of judgment, either the employer or carrier or the employee or his personal representative may settle their claims as their interest shall appear and may execute releases therefor.
"(3) Settlement and release by the employee is not a bar to action by the employer or carrier to proceed against the third party for any interest or claim it might have.”

 Accord, McCoid, supra.

 GCR 1963, 928, provides:
".1 In any claim or action for personal injury or wrongful death based upon the alleged conduct of another, in which an attorney enters into an agreement, express or implied, whereby his compensation is dependent or contingent in whole or in part upon successful prosecution or settlement or upon the amount of recovery, the receipt, retention, or sharing by such attorney, pursuant to agreement or otherwise, of compensation which is equal to or less than the fees scheduled in subrule 923.2 is deemed to be fair and reasonable. The receipt, retention, or sharing of compensation which is in excess of such scheduled fees shall be deemed to be the charging of a 'clearly excessive fee’ in violation of Canon 2, DR 2-106(A) of the Code of Professional Responsibility and Canons.
".2 The following is the schedule of reasonable fees referred to in subrule 928.1:
"(1) Not to exceed 40% of the first $5,000 recovered, not to exceed 35% on the next $20,000 recovered, not to exceed 25% on the next $225,000 recovered, not to exceed 20% on the next $250,000 recovered, and not to exceed 10% on any amount recovered over $500,000.
"(2) Alternatively, the attorney and client may agree to a contingent fee of one-third of the entire recovery that does not exceed $250,000 and 20% of the next $250,000, and not to exceed 10% of any amount recovered over $500,000.
".3 The percentages referred to in subrule 928.2 shall be computed *618on the net sum recovered after deducting from the amount recovered all disbursements properly chargeable to the enforcement of the claim or prosecution of the action. In computing the fee, the costs as taxed and any interest included in or upon the amount of a judgment, shall be deemed part of the amount recovered.
".4 An attorney may enter into contingent fee arrangements calling for lower percentages or for less compensation than that set forth by subrule 928.2.
".5 An attorney shall advise his client, before entering into a contingent fee arrangement, that attorneys may be employed under other fee arrangements whereby the attorney is compensated for the reasonable value of his services, such as on an hourly or per diem basis. The method of compensation utilized by any individual attorney remains the attorney’s option and this rule does not require any attorney to accept compensation in a manner other than he chooses.
".6 All contingent fee arrangements entered into by an attorney with his client shall be in writing and a copy thereof provided to the client.
".7 This rule does not apply to agreements reduced to writing before May 3, 1975.” (Added May 2, 1975.)

 The attorney fees in these three cases do not have to comply with the guidelines of GCR 1963, 928, supra, since the rule does not apply to agreements reduced to writing before May 3, 1975.

 We do not use the language "contingent future interest” in the traditional property law context. We use this language as a descriptive phrase characterizing the insurer’s future compensation credit.

 The insurer’s future credit is still reduced on a weekly basis by the amount of compensation benefits the employee would have received but for the third-party recovery.
Thus, with employee Franges, the insurer’s future credit of $61,252.99 would be reduced on a weekly basis by $104, the weekly compensable wage loss and by any other claims compensable under the act.

 Since the weekly reimbursement of recovery expenses by the insurer to the employee changes the redistribution dollar amounts each week, calculation of these amounts should be made by the respective trial courts. Any calculation by this Court would be inaccurate when the case reaches the trial court on remand. Additionally, the Schalk case record does not indicate the dollar amount of employee Schalk’s weekly compensation award. The lack of this information makes computation of step VII, apportionment of recovery expenses for future compensation credit, impossible.