On August 22, 2024, Acting New Jersey Governor Nicholas Scutari signed legislation amending N.J.S.A 34:15-64 to increase the cap on attorney’s fees from 20% to 25% in workers’ compensation claims.  The change goes into effect immediately.

This increase has long been sought by the petitioners’ bar, which has argued that present day workers’ compensation matters are more complex and require more work than they did in 1927 when the 20% fee was codified.

The reality is the cost of this increase will be passed on to both the employers and injured workers.

For example, 33 1/3% PPT permanency award at the 2024 rate is $105,600.  The statute still remains silent on the fee split for permanency awards, which has historically been 60% paid by respondent and 40% paid by petitioner.  At 20%, the attorney’s fee was $21,120, paid $12,672 by respondent and $8,448 by petitioner.  Now at 25%, the fee is $26,400, to be paid $15,840 by respondent and $10,560 by petitioner.  

The 25% will also apply to Section 20 settlements.  The petitioners are responsible for 100% of the fees and costs in these settlements.  For example, the attorney’s fee on a $100,000 Section 20 will increase from $20,000 to $25,000.  This will likely result in an increase in the values of Section 20 settlements to cover the increase in the attorney’s fees.

This amendment, additionally, increases Motion for Medical and Temporary Disability fees to 25% on benefits paid in connection to a successful motion.  However, unlike settlements, this will likely remain a sliding scale of percentages based upon the venue and Judge of Compensation.  Fees associated with Motions are solely in the discretion of the handling judge. 

On top of the 2020 hand and foot bill and the substantial increase in the NJ Schedule of Disabilities since the pandemic, this is another development that raises the costs of defending workers’ compensation claims in New Jersey.

If you have any questions, please feel free to contact Steven Fairbank, Esq. at sfairbank@c-wlaw.com or (856) 761-3800.

DISCLAIMER

The information in this article is provided for general informational purposes only and may not reflect the current law in your jurisdiction.  By reading this article, you understand that there is no attorney-client relationship between you and Cipriani & Werner, P.C. or any of our attorneys.  No information contained in this article should be construed as legal advice from Cipriani & Werner, P.C. or the individual authors.