Cassi Martin and Jon Meyers Examine Impact of Supreme Court Decision in Lorino on Section 440/Unreasonable Contest Fees
In practice, if an employer established a reasonable contest during litigation of a workers’ compensation claim they would avoid the assessment of unreasonable contest fees. Now, according to Lorino v. WCAB (Cmwlth. of Pa.), decided December 22, 2021, the WCJ may award attorney’s fees even if the employer’s contest was reasonable.
In Lorino, the claim had been accepted via a “medical-only” Notice of Compensation Payable. Since this was med-only case, Claimant’s counsel was not collecting a fee. Employer filed a Termination Petition. The workers’ compensation judge denied the termination but held that Employer’s contest was reasonable. Despite the finding of a reasonable contest, unreasonable contest fees were awarded. The Workers’ Compensation Appeal Board reversed the award of unreasonable contest fees, and the Commonwealth Court of Pennsylvania affirmed. The Pennsylvania Supreme Court reversed, holding that even when a reasonable basis for contest has been established, the judge may still award unreasonable contest attorney’s fees when the Claimant prevails.
In reaching its decision, the court relied on the plain reading of Section 440-of the Pennsylvania Workers’ Compensation Act. ”(U)nder Section 440, when a contested case is resolved in favor of an employee, a reasonable sum for attorney’s fees shall be awarded to the claimant. Such an award is mandatory. Where, however, the employer has established a reasonable basis for the contest, an award of attorney’s fees may be excluded. In other words, the WCJ is permitted, but not required, to exclude an award of attorney’s fees.” Lorino v. WCAB (Cmwlth. of Pa.), 8 EAP 2021 (Pa. 12/22/2021)(emphasis added).
This decision could have a significant impact on the litigation of future workers’ compensation claims in Pennsylvania. Hill Wallack’s workers’ compensation group has been helping Employers navigate workers’ compensation claims for more than twenty-five years. If you have questions about this case, or any other workers’ compensation issues, please do not hesitate to call us.
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