Court Opinion

ID: 9749365
Source: CourtListenerOpinion
Date Created: 2023-08-27 16:40:39.554274+00
Date Added: 2024-06-11T07:25:47.487560
License: Public Domain

BLATT, Senior Judge,
dissenting.
Although I agree with the majority’s conclusion that the Board improperly placed a cap of 12 months on the attorney’s fee, I do not believe that a remand is necessary. Instead, I would prefer that the Board be reversed. I must, therefore, respectfully dissent.
*60The referee found that a fee agreement for 20% of the award existed between the claimant and her counsel. As the majority acknowledges, a 20% fee agreement is “reasonable per se” under Section 442 of the Act.1 Workmen’s Compensation Appeal Board v. Leuschen, 21 Pa.Commonwealth Ct. 39, 342 A.2d 810 (1975). Consequently, I believe that nothing more was required of the referee than his finding of fact that such an agreement existed.
The majority evidently believes, however, that this standard of reasonableness is inapplicable under Section 440 of the Act.2 Its reasoning as to what constitutes a “reasonable sum for costs incurred for attorney’s fee” under Section 440 does no less than establish a double standard as to what is “reasonable” based merely upon who is paying the bill, the claimant or the employer.
If, in this case, the claimant were paying her attorney’s fee, there would be no question that this fee agreement is reasonable. However, because the employer is responsible for this fee as a result of its unreasonable contest of the claim, the majority evidently believes that the purpose of Section 440 is best effectuated by applying a different standard.
The majority attempts to justify this position by characterizing the amount of money involved here as punitive in nature, rather than serving the purpose of this section by “protecting claimants against unreasonable contests of a claimant’s initial or continuing right to the benefits of the act ...” Weidner v. Workmen’s Compensation Appeal Board, 497 Pa. 516, 521, 442 A.2d 242, 244 (1982). Essentially, Section 440 was enacted by the legislature to ensure that claimants would incur no obligations because an em*61ployer unreasonably contested a claim. Here, when faced with an unreasonable contest of her claim, the claimant incurred the reasonable per se obligation for attorney’s fees of 20% of the entire award. It is from this type of obligation that Section 440 was intended to protect a claimant by ensuring that the contesting party would be responsible for all attorney’s fees.
Addtionally, I feel that I must address the conflicts and possible consequences of the majority’s interpretation of Section 440. If, upon remand, the referee finds that a “reasonable sum” under Section 440 is less than the 20% agreed upon by the claimant and her attorney, the referee, by making such a finding, has effectively disapproved a fee agreement which the legislature has deemed reasonable per se under Section 442. It seems clear to me that a referee does not have this authority.
Alternatively, however, if both Section 440 and 442 are given effect as the majority interprets them, the claimant’s attorney would still have an enforceable fee agreement with the claimant. Because this agreement provides that her attorney is entitled to 20% of the entire award, the claimant would be responsible for paying that portion of her attorney’s fee which the employer does not pay under Section 440. The claimant would then become obligated to pay attorney’s fees to defend an unreasonable contest to her right to benefits, and the purpose of Section 440 would be defeated.

. The Pennsylvania Workmen’s Compensation Act, Act of June 2, 1915, P.L. 736, as amended, added by Section 3 of the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. § 998.

. 77 P.S. § 996. Section 440 provides in part that where an employer unsuccessfully contests its liability for a claim, the claimant "shall be awarded ... a reasonable sum for costs incurred for attorney’s fee” unless the employer establishes a reasonable basis for the contest.