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On behalf of our member companies that make NJBIA the largest, most impactful statewide business association in the nation, I write to you in opposition to Senate Bill No. 3818 (Lagana) which would mandate a 25% fee be paid to petitioner’s attorneys in workers’ compensation cases. This attorney fee increase will significantly raise workers’ compensation cost for all employers, including small businesses, and even chip away at awards for injured workers. As the Legislature continues its focus on making New Jersey a more affordable and attractive place to live, work and run a business, this legislation runs counter to those goals.

Despite the fact that Garzon v. Morris County Golf Club is not a published opinion and thus has no precedential value, it is being utilized as a basis of this legislation to significantly impact the entire workers’ compensation system. Currently, attorneys can be awarded a reasonable fee of up to 20% of the judgement in workers’ compensation cases at the discretion of the presiding judge. In these cases, judges can determine what is reasonable based on the complexity of each individual case, amount of work required by an attorney and other factors. Mandating attorneys receive 25% regardless of the factors of a case directly removes judicial discretion from the system. When paying attorney fees, employers typically end up covering 60% of this cost and the other 40% is paid by injured workers through a deduction in their final settlement. Settlement awards, and thus attorney fees, have steadily increased each year based on changes in the State Average Weekly Wage. This figure is recalculated each year by the New Jersey Department of Labor and Workforce Development and has seen increases every year since 1995 with the exception of a decrease in 2009. Over the last decade, the State Average Weekly Wage has increased more than 28%, providing a direct increase to fees paid to attorneys based on those amounts. As a result, we do not believe there is a need to arbitrarily increase attorney fee awards at the expense of employers and injured workers.

This legislation combined with a bill that recently moved through the legislature to increase physician fees in workers’ compensation cases will serve as a one-two punch to employer workers’ compensation costs in New Jersey. We urge the Legislature to proceed with caution and take into consideration the collective impact bills like these will have on our business climate.

For these reasons, we respectfully ask you to vote NO on S-3818.

Employment & Labor Law News

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