Court Opinion

ID: 3841646
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:10:57.79595+00
Date Added: 2024-06-11T13:45:06.200755
License: Public Domain

The attorneys for Gerald Francis Cox, the respondent herein, have filed a motion for an order fixing the fee for their services as attorneys in this court. Accompanying the motion is a statement signed by their client, under date of February 25, 1942, to the effect that he had agreed to pay them a fee of $250 in connection with the appeal of this case. In this statement Cox requests that such fee be paid in a lump sum out of the compensation that is now due him from the State Industrial Accident Commission.
The original opinion in this case was rendered February 10, 1942. One of the two matters therein decided was that the trial court's approval of $500 as attorneys' fees, to be paid in a lump sum from moneys then due the claimant Cox, was within the discretionary power of that court, and that there was no such manifest abuse of discretion on the part of the court as to call for a reversal or modification of its order. *Page 522 
Section 102-1775, O.C.L.A., provides in part as follows:
"No claim for legal services or for any other services rendered before the commission in respect to any claim or reward for compensation, to or on account of any person, shall be valid unless approved by the commission, or if proceedings on appeal from the order of the commission in respect to such claim or award are had before any court, unless approved by such court."
This was passed by the legislature as § 1 of chapter 115, Oregon Laws 1933. Shortly after this enactment a committee was appointed by Oregon State Bar to recommend a "proposed schedule of maximum fees in workmen's compensation cases". The schedule recommended by the committee was approved by the board of governors of Oregon State Bar. See Oregon State Bar Bulletin, XVI Oregon Law Review (1936-1937) Supplement, pages 57-59, andHinkle v. State Industrial Accident Commission, 163 Or. 395,97 P.2d 725.
In making the report containing the schedule the committee stated, among other things, the following:
"Since the enactment of the workmen's compensation law in 1913, until 1933, there was no provision in the law relating to the fixing of attorney's fees in compensation cases. While many county bar associations had adopted schedules of minimum fees, no recommendation was made with regard to fees in this class of cases. It was the practice among attorneys generally to charge claimants under the compensation law in accordance with the schedule of contingent fees in personal-injury actions. There were numerous abuses, and many complaints were made to the State Industrial Accident Commission by injured workmen respecting the fees charged, and a considerable number of these complaints were justified. It was the practice of some attorneys to base their fee charges upon the entire amount of compensation awarded to the claimant, even *Page 523 
though the claimant may have obtained a portion of the award in the first instance without the intervention of the attorney."
The report, after setting forth the statute here involved, thus continued:
". . . We are attaching hereto a suggested schedule of fees, which, unlike other schedules that have been adopted, is a schedule of maximum fees applicable to all cases except those in which unusual services have been rendered. The great majority of cases involved under the workmen's compensation law involve only the question of the amount of compensation to be awarded. In a smaller number of cases there may also be involved the question as to whether the injuries are compensable, that is, whether they arose out of and in the course of the workman's employment and were sustained by accidental means. The procedure in all of the cases is practically identical, and in the great majority of cases the services rendered by the attorneys are comparable. The committee, therefore, believes that a schedule of maximum fees is indicated."
We shall not here refer in detail to the schedule of fees based on the recommendations of that committee and approved by the board of governors, for the reason that on August 23, 1941, the board of governors of Oregon State Bar approved a schedule of maximum fees in workmen's compensation cases recommended by another special committee of Oregon State Bar, which schedule is not essentially different from that contained in the former report above mentioned. (For a summary of the later report see Oregon State Bar Bulletin for September, 1941.) Attention is directed to the following, contained in the schedule last approved by the board of governors:
"2. Attorney's fees shall be based only upon the amount of compensation paid to the workman and not upon medical, hospital and other expenses of treatment.
                                  *      *      * *Page 524 
"5. If an appeal is taken from the award of the State Industrial Accident Commission to the circuit court, a fee shall be allowed not exceeding 30% of the increase in compensation, with a minimum fee of $50.00 and a maximum fee of $500.00, provided a trial has been had or commenced upon the merits.
"6. A fee of $750.00 shall be the maximum fee to be allowed an attorney for a trial in the circuit court and an appeal to the supreme court.
"7. If exceptional circumstances be shown in a detailed, sworn statement setting forth the actual work which the attorney has done, the commission or court may allow a larger attorney's fee than the maximum amount fixed herein. It is believed that cases justifying larger fees than the maximum fees above mentioned will be extremely rare."
These schedules of fees as approved by the board of governors of Oregon State Bar are of material assistance to courts in passing upon the fees to be allowed attorneys in workmen's compensation cases: Hinkle v. State IndustrialAccident Commission, supra.
In the instant case the total amount of the plaintiff's recovery was $2,020 in compensation in addition to payment of his medical, surgical and hospital expenses. The question involved in the trial of the case in the circuit court was whether the plaintiff was, at the time of the accident in which he sustained injuries, the employee of his father or of one Fred Randall. The transcript of testimony, which includes all the evidence introduced in the circuit court, comprises forty-two pages. No evidence was offered on the part of the defendant, the State Industrial Accident Commission. At the close of the plaintiff's case the defendant moved for a directed verdict, and the plaintiff made a similar motion, whereupon the trial court directed the jury to return a verdict in favor of the plaintiff. *Page 525 
The brief of the respondent in this court consists of twenty-six pages, fifteen of which are taken up with the question of whether the plaintiff was subject to the provisions of the workmen's compensation act at the time the accident occurred; and the remaining pages are devoted to a discussion of whether the court had discretion to order the payment of attorneys' fees in a lump sum.
In Wintermute v. Department of Labor and Industries,183 Wash. 169, 48 P.2d 627, the supreme court of Washington had before it the question of reasonableness of a fee allowed attorneys for an injured workman. The Washington "statute provides for an attorney's fee, not in excess of a reasonablefee, in an appeal from the department to the courts". In that instance the trial court allowed attorneys' fees of $1,000. In reducing the amount to $400 the supreme court said:
"There is nothing difficult in the procedure for attorneys in taking an appeal, the burden being mostly on the department to file a certified record in the superior court. The trial in this case to a jury, it appears, lasted about one day. The statement of facts contains sixty-eight typewritten pages. Other features of the case, essential to be considered in fixing the fee, though not more specifically mentioned or referred to here, have been duly considered, and, in our opinion, the amount fixed by the trial court is so greatly unreasonable and excessive as to require a modification".
The facts in that case, briefly, are the following: Peter Wintermute, while working in hazardous employment, received an accidental fracture of his left hip. His claim for compensation was allowed, and on December 28, 1931, finally closed with payment for time lost to December 10 of that year, with an award *Page 526 
of twenty-five degrees permanent partial disability. In January, 1933, Wintermute made an application to reopen his case on the ground of aggravation of his disability, and this was denied. He then applied for a rehearing before the joint board of the department of labor and industries. A rehearing was granted, but before it was held and on February 10, 1933, the claimant died. "His widow, Ivie M. Wintermute, then filed an application for compensation, spoken of as a `pension,' on account of his death, on the ground that the injury suffered by him on May 8, 1930, was the cause of his death. She also made claim for compensation due deceased for which he applied prior to his death. Upon both of her claims being disallowed by the department, including the joint board, she appealed to the superior court." The cause was tried by a jury, which returned a verdict in favor of Mrs. Wintermute on both her claims. The judgment entered on the verdict was affirmed on appeal.
Adkins v. Staker et al., 130 Ohio St. 198, 198 N.E. 575, was an action by an injured employee to recover from the defendants, his attorneys, the sum of $700 received by them as fees in excess of the amount allowed by law. The plaintiff had applied to the industrial commission for a disability award, which was denied. He then appealed to the court of common pleas, where he was represented by the defendants and a judgment was rendered in his favor, resulting in an award of $1,456. On application of the attorneys the trial judge allowed them the sum of $195.60 as their fee.
At the time they were employed by the plaintiff, the attorneys entered into a written agreement with him, by the terms of which they were to receive for *Page 527 
their services one-half the total award made by the commission, but in the event that no award was made, the attorneys were to receive nothing for their services. The Ohio statute then in force provided as follows:
"The cost of any legal proceedings, authorized by this section, including an attorney's fee to the claimant's attorney to be fixed by the trial judge, shall be taxed against the unsuccessful party; provided, however, that such attorney fee shall not exceed twenty per cent of any award up to the sum of five hundred dollars, and ten per cent of all amounts in excess thereof, but in no event shall such fee exceed the sum of five hundred dollars."
In Ohio the amount of the fee fixed by the trial judge for the attorney of a successful claimant is paid out of the industrial accident fund in addition to the award of compensation. In the case under discussion the attorneys received the $195.60 fixed by the trial judge and in addition $700 out of the compensation awarded to the claimant. With reference to the statute last quoted, the Ohio court said:
"Under the above-quoted section the trial judge has discretion to fix the fee within the percentages named, basing the amount fixed upon the nature and character of services rendered by the attorneys; however, he is precluded in any case from fixing a fee exceeding the sum of $500. It is clear that any private contract which entails the payment of a greater fee than that specified by statute is invalid; for if claimant and attorney are permitted to fix fees it would nullify and render ineffectual that clause authorizing the trial judge to do this. * * *
"Many states have adopted statutes controlling fees paid in workmen's compensation cases and, where it appears that fee contracts are controlled or inhibited by state law, they have been held to be unenforceable, *Page 528 
and if money has been paid thereon by a claimant to an attorney, it may be recovered by the claimant."
The opinion then points out that the compensation payable to an injured employee under the workmen's compensation act is not a private matter between employer and employee, but the public is also interested in preserving and safeguarding the fund. After holding that the maximum fee that the attorneys were entitled to receive therein was the amount fixed by the trial judge in the appeal from the commission's order, the court said:
"This was not a total disability award. Let us assume that it was; that a bread-winner maimed for life, or that his widow with minor children, was the claimant; and that a similar fee contract was under consideration by this court. We can conceive of no state court, functioning under a constitution and law similar to our own, that would sustain an equal division in the proceeds awarded to the bread-winner or to his widow. With a knowledge of the facts and a better acquaintance with the law, the lawyer occupies a tremendous advantage over the claimant which it is possible for the former to capitalize."
In the case at bar it appears from the record that the claimant has agreed that his attorneys shall have a fee of $750. It is only in instances of such an agreement had between claimant and attorney, however, that the court has authority and occasion to pass upon the reasonableness of the fee charged. This was pointed out in Davis v. State Industrial Accident Commission,156 Or. 393, 404, 64 P.2d 1330, 66 P.2d 279,68 P.2d 118, which involved the statute herein controlling, in the following language:
"The statute is inartfully drawn. We have examined it again and have arrived at the conclusion that *Page 529 
it confers authority upon the commission and the courts to approve fees only after the client and attorney have agreed upon the amount. We have become convinced that it confers no authority upon the commission nor the courts to do anything about fees, in the absence of an agreement between client and attorney in regard thereto. If a dispute arises between the attorney and the commission concerning the approval of the fee, then the court may adjust the dispute after the parties to it have submitted statements."
The legislature in enacting in 1933 what is now § 102-1775,supra, recognized the urgent necessity of protecting the injured workman by requiring that all claims for attorneys' fees for services rendered in cases coming under the workmen's compensation law should be subject to supervision by the commission and the courts. Oregon State Bar has also taken note of the difference between this and other kinds of service rendered by attorneys, by adopting a schedule of maximum fees for workmen's compensation cases, in contrast to minimum fees in other matters.
In the instant case the plaintiff suffered the loss of his right hand and forearm to a point about one-third below the elbow, for which he was entitled to $1,900 in compensation: § 102-1760, O.C.L.A. The additional $120 which he was awarded was for temporary total disability for four months at the rate of $30 a month.
The nature of the injury suffered by the workman and the amount fixed by statute as his compensation therefor should be kept in mind in determining the reasonableness of his attorneys' fees. In most appeals from the commission to the courts there is only one question to be decided, either whether the workman is subject to the workmen's compensation act, or the *Page 530 
extent of his injuries. Few appeals involve both questions. If the workman is subject to the act, the law provides the amount of the award to be made him. The degree of his injury is fixed by the jury, when an appeal is taken to the circuit court from the order of the commission. The procedure in appeals from the commission's orders is not difficult and is practically standardized. If the claimant is successful, the fee for his attorneys as approved by the court is made a lien upon the compensation payable to him.
The reasonableness of attorneys' fees is usually presented to the court ex parte. Seldom is the compensation claimant's voice heard. He does not have knowledge of the work performed by his attorneys or the reasonableness of the fee to which he has agreed. He is not in a position to employ other lawyers to represent him in court on the question of fees.
When we are called upon to determine the reasonableness of attorneys' fees in compensation cases, we must bear in mind the purpose sought to be accomplished by the enactment of the workmen's compensation law and the fact that attorneys' fees for services thereunder were by the 1933 act (§ 102-1775, supra), in furtherance of that purpose, made subject to supervision by the commission and the courts. It is our opinion that the $500 allowed in the instant case as the fee of attorneys for the plaintiff is liberal payment for the work done by them both in the circuit court and the supreme court. Therefore, the motion for an additional attorneys' fee in this court is denied.
KELLY, C.J., and BELT, J., did not participate in the consideration of this motion. *Page 531