Court Opinion

ID: 4130322
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:02:55.658753+00
Date Added: 2024-06-11T14:32:03.606553
License: Public Domain

THE       ATTORNEY        GENERAL
                          OF   TEXAS

                          March 19, 1990

Honorable Hugh Parmer                   Opinion No.   JM-1147
Chairman
Intergovernmental Relations             Re: Rules of the Indus-
   Committee                            trial Accident Board
Texas State Senate                      (RQ-1813)
P. 0. Box 12068
Austin, Texas 78711

Dear Senator Parmer:

     You have requested an opinion a&ut   the validity  of
several rules adopted recently by the Industrial  Accident
Board.

     One of the rules you ask about deals with board
approval of attorney  fees in worker's compensation cases.
28 T.A.C. 5 64.10.   Section 7c of article 8306, V.T.C.S.,
provides in part:

             All fees of attorneys    for representing
        claimants before the     [Industrial Accident]
        Board under the provisions of this law shall
        be subject to the approval of the Board.     No
        attorneys' fees for representing      claimants
        before the Board shall be allowed or approved
        against any party or parties not represented
        by such    attorney, nor exceeding   an amount
        equal to twenty-five    per cent  (25%) of the
        total recovery, in addition to the reasonable
        expenses incurred by the attorney       in the
        preparation    and presentation   of the said
        claim   before the Board, such expenses to be
        allowed by the Board.

          The new board rule provides:

            (1) Attorney fees shall not total, more
        than 25% of the claimant's recovery.

            (2) A percentage fee of more than 15% of
        the claimant's recovery will not be approved
        unless the board determines that a higher
        percentage is justified by the time expended
        by an attorney on the claim.

                                  P. 6056
Honorable Hugh Parmer - Page 2   (JM-1147)

28 T.A.C.  § 64.10(c).   In other words,    the board rule
provides that attorney fees will be limited to an amount not
to exceed 15% of the claimant's recovery unless the attorney
shows that his time involved    in the matter   justifies  a
higher percentage.  We think that rule is unreasonable as a
matter of law. &&8 Allstate Ins. Co. v. State Bd. of In .,
401 S.W.Zd  131, 132 (Tex. Civ. App. - Austin 1966, writ
ref'd n.r.e.) (administrative rules must be reasonable).

     There are a number of factors other than time that are
commonly considered  by courts in approving      attorney   fee
awards. G If a ina       . v. ofstedt,    188 S.W.Zd 155, 160
(Tex. 1945: (h%ng     t:at in ascertaining reasonable     value
of attorneys'   services jury should consider       nature of
litigation, amount involved, interests     at stake, capacity
and fitness of lawyers for work, services and labor, time
involved, benefit to clients): International & G.N.R. Co. v.
Clark, 16 S.W. 631, 632 (Tex. 1891); Fox v. Boese, 566
S.W.Zd 682, 686 (Tex. Civ. App. - Houston [lst Dist.]     1978,
writ ref'd n.r.e.). The rule in question disregards       those
factors and allows consideration only of time spent on a
case. Under that rule an experienced worker's     compensation
lawyer who, by virtue of his experience and expertise, could
handle a case in fewer than average hours would be limited         4.

to a fee of 15 percent   of his client's recovery. A lawyer
handling his .first worker's   compensation case who had to
spend a number of hours learning the rudiments of worker's
compensation law might receive more than 15 percent of his
client's recovery.  Consequently, we think that the rule in
question is unreasonable as a matter of law.     See aeneralle
Attorney General Opinions JM-512 (1986); H-1162 (1978).

      We also note. that the board hasauthority     to ~~allow*~
and "approve@' attorney   fees in worker compensation    cases,
whereas courts have authority to "allow" and "fix" attorney
fees.    V.T.C.S.  art. 8306, 5 7d.       See aenerallv    Texas
Emnlovers Insurance Association   v. Motley     491 S.W.Zd   395
(Tex. 1973) (comparing authority of cour& and Industrial
Accident Board in regard to attorney         fees in worker's
compensation cases).    Because we conclude that the board's
new rule is invalid for a different reason, we need not
consider the argument raised that the new rule is an invalid
attempt to fix attorney fees.

     You also ask about a board rule that would require an
attorney and a client in a worker's   compensation case to
enter into an agreement    for representation    on a form

                               P. 6057
Honorable Hugh Parmer - Page 3   (JM-1147)

prescribed by the board.1     Inds. Act. Rd., Prop. Rule 14,
TX. Reg. 4681 (1989). Section 7c of article 8306, V.T.C.S.,
provides that the board shall approve attorney       fees for
representing claimants before the board.        Certainly  the
authority to approve     fees would authorize   the board to
require attorneys to provide to the board written     evidence
of representation   and information    relevant  to the fees
attorneys are seeking in a particular worker's    compensation
case. Even though the board's approval power would allow it
to disregard   agreements between an attorney    and a client
that would authorize fees not approved by the board, we do
not think that the authority to approve fees implies the
authority   to mandate    specific contractual    arrangements
between lawyers and their clients. See aenerallv      Fidelity
Casualtv Co. v. Daooerman, 53 S.W.Zd 845 (Tex. Civ. App. -
Amarillo,  writ ref'd.) (contract      for fee in     worker's
compensation case not binding in light of court's    authority
to fix fees); Gov't Code 82.065 (contingent fee contract. for
legal services must be in writing and signed by attorney and
client).

     You also ask   about section 64.20   of the board    rules,
which provides:

            (a) On the date the attorney disburses
        the proceeds   of a workers'    compensation
        claim, the    attorney shall   present    the
        claimant with a written disbursement   state-
        ment, on a form prescribed   by the board,
        setting out:

                (1) the monetary amount received     by
           the claimant(s); and

                (2) the monetary amounts retained by
           the attorney, itemized by specific charge.

           (b) The claimant(s)     and the   attorney
        shall sign the disbursement statement.

            (c) The attorney shall retain the dis-
        bursement statement for four years from the
        date of disbursement.

     1. We understand   that the board has not adopted by
rule a particular form contract.     G. 28 T.A.C.   § 53.40
(specifying exact working of transmittal letter by which a
carrier tenders a lump sum payment for medical disabilities
to a claimant).

                              p. 6058
Honorable Hugh Parmer - Page 4     (JM-1147)

                                                                --.

            (d) The board may request the disburse-
        ment statement at any time within the reten-
        tion period established in subsection (c) of
        this section.    The attorney   shall comply
        within 10 days of receiving a request.

Although the board has only limited disciplinary   authority
over attorneys, m     V.T.C.S. art. 8307, 5 4(d) (board may
bar persons guilty of fraudulent or unethical conduct    from
practicing before the board), we think that the board's
authority to approve attorney fees includes the authority to
require some evidence   of disbursement.  Whether the rules
set out above are reasonable also involves resolution      of
fact issues. We cannot resolve those issues in the opinions
process.

       You also ask about a new board rule that defines
"recovery" for purposes   of calculating  attorney fees.   28
T.A.C.   § 64.10(a). The historical interpretation of section
7c is relevant to your question.     Because the briefs  sub-
mitted to us in regard to your request did not address that
aspect of the question, we will reserve answering         the
question until interested parties have had an opportunity to
respond.    In addition,  YOU ask us to determine     whether
certain types of rules would conflict with the worker's
compensation statutes.   In the absence of specific rules, we
cannot make those determinations.

                       SUMMARY

          A rule adopted by the Industrial Accident
       Board to govern the amount of attorney fees in
       worker's compensation cases. is unreasonable as
       a matter of law and therefore invalid.      The
       board can require written evidence of repre-
       sentation and disbursement of attorney fees in
       a worker's compensation case.

                                  J
                                   Very truly y

                                           A
                                    JIM     MATTOX
                                    Attorney General of Texas

MARY KELLER
First Assistant Attorney General

JUDGE ZOLLIE STEAELEY
Special Assistant Attorney General

                                 P. 6059
Honorable Hugh Parmer - Page 5   (JM-1147)

RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Sarah Woelk
Assistant Attorney General

                              p. 6060