In Illinois, workers’ compensation lawyers charge a contingency fee for handling workers’ compensation claims. The lawyers receive up to 20% of the award actually paid to the worker if that worker won his or her case. This amount may be adjusted if the worker has died due to the injury or is awarded compensation for undisputed medical expenses or benefits for total or partial disability. Attorneys may also receive a reduced or nominal amount for handling claims where they have suffered from specific injuries (such as amputation). The Illinois Workers Compensation Commission must approve the fee arrangement.
Illinois Workers’ Compensation Act
In Illinois, the Illinois Workers’ Compensation Act governs the area of work-injury cases. In the Act, employers are required to obtain and maintain workers’ compensation insurance. The law also sets the type and amount of coverage that employers’ workers’ compensation insurance must cover. Just as auto insurance serves to address the economic loss of motor vehicle accidents, workers’ compensation insurance serves the purpose of redressing the economic loss experienced by workers and their families if the worker is injured in a workplace accident.
Some industries are not covered by the Illinois Workers’ Compensation Act. For example, injured police officers and firefighters that work within the city of Chicago may qualify for benefits under another Illinois law, the Illinois Pension Code. Injured police officers and firefighters who work with the city of Chicago are encouraged to speak with Chicago workers’ compensation lawyers to discuss the specific requirements that pertain to their situation.
The Illinois Workers’ Compensation Act establishes the Illinois Workers’ Compensation Commission. The Commission oversees formal workers’ compensation disputes between the injured worker, the employer, and the workers’ compensation insurance company. The Commission is also responsible for reviewing agreements for legal fees and making sure that such agreements are in the form and for the amount required by the law and the Commission.
Legal Fees vs. Legal Costs in Workers’ Compensation Claims
Legal fees include those fees paid to an attorney or law firm to provide legal services and counsel during a workers’ compensation claim. Fees paid to an attorney for legal services do not include legal costs, such as filing fees or fees for requesting medical records. Workers’ compensation attorneys may try to reduce these legal costs as much as possible; however, it is likely that fees will be incurred, such as the cost to have expert medical testimony at the hearing.
Legal costs may be handled and charged differently depending on the agreement between the injured worker and the employer. For example, the worker’s attorney may pay for these legal costs during representation, in which case the worker will be responsible for paying those costs at the conclusion of the case. If the worker’s claim is unsuccessful, however, the attorney may agree to waive the costs entirely. Workers are encouraged to thoroughly review a legal fee agreement and discuss the same with their workers’ compensation attorney prior to signing to make sure they understand what they will and will not be responsible for paying, and when.
Agreements for Legal Fees Subject to Approval
In Illinois, any agreement for attorneys’ fees between a workers’ compensation lawyer and an injured worker is subject to review and approval by the Illinois Workers’ Compensation Commission. The contract for legal fees must be written up in the form required by the Commission, and the contract filed with the Commission. The Commission will review the agreement for attorney’s fees to make sure that it follows the requirements set forth by the Illinois Workers’ Compensation Act and the Commission.
In the event of a dispute between the worker and the workers’ compensation attorney over the fee arrangement, the Commission will preside over the disagreement and decide the proper course of action.
Contingency Legal Fees – Definition and Purpose
Contingency fee arrangements are where the lawyer agrees to not receive any money unless the client wins his or her case. In contingency arrangements for workers’ compensation claims, the attorney additionally agrees to only receive a percentage of the benefits actually paid to the employee or the employee’s dependents.
The purpose of the cap on attorney’s fees serves in part to remove potential barriers to injured workers’ access to legal services. Injured workers may be reluctant, or unable, to seek legal counsel in the absence of the contingency fee arrangement. It can give workers the confidence to know that their workers’ compensation lawyers are truly fighting for the interests of the workers, and that the attorneys only get paid if the worker gets paid.
Workers’ Compensation Attorneys Are Paid a Percentage of Benefits Actually Received
In Illinois, the compensation received by an attorney for securing payment of workers’ compensation benefits to his or her client cannot exceed 20% of the compensation actually received by the worker. If the worker is receiving compensation because of the death, or total or partial disability of the worker, the legal fees received by the attorney cannot exceed 20% of the sum of 364 weeks of compensation which would be paid for permanent total disability benefits. This base amount is calculated using the worker’s total, gross weekly wages prior to the accident; however, this amount cannot exceed the maximum weekly benefits that the worker can receive under the Illinois Worker Compensation Act.
Undisputed Medical Expenses
If the medical expenses incurred by the worker due to the injury are not in dispute, then the amount of these expenses is not included in the calculation of the contingency fee received by the workers’ compensation attorney.
Undisputed Liability of Employer to Pay Compensation
If the worker and the employer agree (1) that the employer is responsible for paying compensation in a timely manner or in the proper amount and (2) that the work accident caused specific injuries, the attorney may receive a nominal fee for services rendered, not to exceed $100. The Illinois Workers’ Compensation Commission will determine the exact amount to be paid to the attorney.
The attorney will receive nominal fees based on the above in two situations: The first is where the accident resulted in things such as the worker’s death or permanent disability, or the amputation of a worker’s finger, toe, or member. The second is where the accident resulted in the fracture of a skull, vertebrae, or facial bones, or the removal of a kidney, spleen, or lung. In this second situation, the attorney will only be paid this nominal amount if the worker is awarded the minimum amount for the specific injuries as stated in the Illinois Workers’ Compensation Act.
Other Limits on How Much an Attorney Can Charge in a Workers’ Compensation Case
The Illinois Workers’ Compensation Act places additional limits on when and how much a workers’ compensation lawyer can be paid for handling a workers’ claim.
The attorney may not be paid, for example, if the amount that the worker receives (or will receive) in compensation is the same or less than the amount offered by the employer prior to the worker’s attorney taking on the case. Likewise, the attorney may not be paid out of compensation received by the worker for temporary total disability; however, the attorney will be paid if the employer refuses to pay the right amounts at the right frequency (e.g., X dollars every two weeks) and the attorney successfully provides legal services to the worker for him or her to receive the amounts rightfully owed.
Prohibited Referral Compensation – Gifts
By law, attorneys are prohibited from giving to or receiving gifts from anyone in exchange for referring a client in a workers’ compensation case, except where allowed in the rules of professional conduct. The definition of gifts includes discounts, and loans in the form of cash or other forms of compensation.