Can an Employer Seek Reimbursement for Attorney Fees After an Unreasonable Contest?

Under the Workers’ Compensation Act, a Worker Compensation Judge is able to award a claimant attorney fees when after an unreasonable content is a petition. This type of award is based on the facts and legal issues that were involved in needing an attorney for the petition. A WCJ will also decide the amount and the length of time allowed for the claimant to be reimbursed for such fees and weigh the skills needed, how long the proceedings took, along with the time and effort expended.

This becomes complicated when an appeal on the award is successful. When a WCJ awards the claimant attorney fees and the decision is reversed, the claimant is technically no longer entitled to that compensation. However, there was no clear precedent on refunding that compensation. A decision in 2016 by the Commonwealth Court of Pennsylvania determined the Employer and Insurer could request that a WCJ order can direct claimant counsel to refund those contest fees when the Employer is successful in their appeal.

Reasoning Behind the Decision

The Court based its decision on Barrett v. WCAB (Sunoco Inc.) (Pa. Cmwlth. 2010). In the case, it was held that an employer and insurer can request reimbursement of litigation costs that were awarded and paid in the case when an appeal is successful. In Barrett, it was decided that allowing the claimant to keep the legal costs in which they were no longer entitled would be unjust enrichment. Furthermore, the Employer would be unable to recover legal cost awards from the supersedeas fund, meaning they would be deprived of any meaningful appeal after an incorrect award.

This reimbursement doesn’t put the claimant in any hardship as recovery is sought directly from the claimant’s counsel as opposed to the claimant. Prior to this decision, the Court believed the same reasoning could be considered just as applicable to the unreasonable contest attorney fee issue.

If you had an appeal go through successfully and are being asked to reimburse attorney fees directly, we can help. At Vanasse Law, our team understands the intricacies of these laws and will put together a defense in your favor. Contact us today to find out how we can help.