Monday, August 1, 2011

Attorney's and Representatives revisited...contingency fees

I've been asked a lot recently about OWCP and representative's charging a contingency fee. Although I've written on this topic before, I'm revisiting it because of the amount of chatter I'm hearing recently.

As I wrote earlier; an attorney or representative for an OWCP claim cannot charge you a contingency fee, which is a percentage of your compensation and/or schedule award.

Although I don't know for sure, I think an attorney or representative gets away with charging a contingency fee because Claimant's aren't bringing this practice to the attention of OWCP or they're just not aware the representative isn't allowed to charge on a contingency basis. My guess would be the Claimant thinks THEY will get in trouble. That seems reasonable since Claimant's are always getting the fuzzy end of the lollipop in OWCPland. Well, I'm here to tell you, this is one of those rare instances that you should not get in trouble if you bring this issue to the attention of OWCP.

Even if a Claimant signs a contingency fee contract with an attorney or representative, the Claimant is not held responsible if contingency fees are brought to the attention of OWCP. Why? Because OWCP will not approve ANY contingency fee and like everything else in OWCPland, OWCP makes the final decision. If there is a contingency fee agreement, OWCP should determine that contract null and void, again because OWCP does not recognize or approve contingency fees. The Claimant should then be charged an hourly rate for the work performed on their claim.

Because OWCP makes the final decision, an attorney or representative can't sue you because of fees. Like everything else, what OWCP says goes unless the decision is overturned on appeal. So don't freak out if an attorney or representative says they're going to sue you, because they can't. An OWCP appeal is their only recourse...just like you.

The Code of Federal Regulations, which was recently updated in the Federal Register, shows Section 10.703 was amended to make it clear that OWCP can only approve representative's fees for services that have been performed before OWCP. This means you can only be charged for work on your OWCP case.

This section states; the Employees' Compensation Appeals Board , (the ECAB or the Board) must approve fees for services performed in from of the ECAB. This means that if you appeal to the ECAB, your attorney/representative fees must be approved by the ECAB not OWCP.

This section (10.703) of the Code of Federal Regulations has also been clarified that contingency fees will not be approved FOR ANY REASON. If the fee is disputed, OWCP/ECAB will consider the customary local charge for a representative with similar qualifications in considering what constitutes a reasonable fee. In other words, OWCP/ECAB will convert the fee into an hourly rate using the average rate of attorneys/representatives in your area. This applies to ALL disputed attorney/representative fees not just contingency fees.

Here's the link showing the amendments. Scroll down to 10.703: http://webapps.dol.gov/FederalRegister/HtmlDisplay.aspx?DocId=24143&AgencyId=13

This information is also in OWCP's regulations. You can find OWCP's regulations on representative fees at http://www.dol.gov/owcp/dfec/regs/compliance/DFECfolio/CA-810.pdf Scroll down to Chapter 4 and you'll find it at 4-1(d).

So again, if you've been charged a percentage of your compensation and/or schedule award by an attorney or representative and you think an hourly rate is more beneficial to you, don't be afraid to tell OWCP about it. As you can see from the regulations, this issue falls squarely on the attorney's and representative's shoulders, not the Claimant's.

Unfortunately, if it's been a long time since your agreement with the attorney/representative, you may not get anywhere, but it doesn't hurt to try it. If you were billed under a contingency agreement, that agreement was not valid. The amount of time that's gone by shouldn't matter...if it's wrong, it's wrong. If it's been a while, the worst they could say is no.

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