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  1. #1
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    Default Attorney Fee's in a Settlement

    Hello all. I have a quick question that i feel more than one person on this forum can answer.

    Are ( or can ) attorney fees be applied the the WCMSA portion of a settlement? For example, let say your gross settlement is for $10,000, but there is a WCMSA in the settlement is in the amount of $1,000. So your gross settlement amount may be $10,000, but the actuall settlment is $9,000 because the $1,000 is allocated to fund your WCMSA. Generally (or legally) speaking, in Ohio is the 33 1/3% applied to the gross amount, or the portion left over ($9,000) as far as the fee's that are charged. These are just made up numbers that i am using for an example.

    Thank you in advance

  2. #2
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    Default Re: Attorney Fee's in a Settlement

    Notgonnasay
    Are ( or can ) attorney fees be applied the WCMSA portion of a settlement?
    Depends on the wording of the retainer and the attorney - laws vary from state to state, not sure about Ohio.

    I've seen some do it and some not - technically they're entitled to a percentage benefits obtained on your behalf through litigation.
    Technically, that MSA money is yours and included in the total amount of the settlement, you can decide to use it properly or not.
    The attorney did obtain those funds through litigation so technically he/she is entitled to a percentage.

    Like I say, some do - some don't, ask your attorney and see what he/she says.

    Tony
    Moderator Responses are based on my personal bias, experience and research - they may not be accepted in the legal community, always consult an attorney.

  3. #3
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    Default Re: Attorney Fee's in a Settlement

    Thanks Tony

    That is how i thought it went. I looked in to this a long time ago, and it is a little foggy to me now. You know, when you get your hopes up, and start researching all the different possibilities, when things start moving. Then reality slaps you in the face " stop it silly, this is worker comp, grab a chair and relax. Nothing moves on your timeline".

  4. #4
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    Default Re: Attorney Fee's in a Settlement

    CMS does not allow attorney fees to be paid out of the corpus of the MSA. So if your state awards a fee based on the value of the MSA, the money to pay the fee would have to come out of the indemnity portion of your settlement. For this reason, among others, most States to my knowledge will not approve a fee from the MSA value unless the lawyer has done some extraordinary work to get the MSA. Typically that is not going to happen: the insurance carriers are highly motivated to fund MSAs in order to protect themselves from the Feds down the road, so what you are more likely to see is a carrier insisting upon an MSA that may not really be necessary.

    Personally, I do not seek an attorney fee out of the value of an MSA, ever. Most of my colleagues here in NC don't either.
    The North Carolina Court of Appeals has held that "In contested Workers' Compensation cases today, access to competent legal counsel is a virtual necessity." Church v. Baxter Travenol Labs, Inc., and American Motorists Insurance Company, 104 N.C. App. 411, 416 (1991).

    Bob Bollinger, Attorney at Law

  5. #5
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    Default Re: Attorney Fee's in a Settlement

    complwyr
    CMS does not allow attorney fees to be paid out of the corpus of the MSA.
    Correct - attorneys can't take the percentage from the MSA, they take the percentage from the total settlement amount.

    The money for that MSA is considered the claimants, it's deposited in an interest bearing account in his name and social security number.
    That money is deducted from the total settlement the same as any other obligation like child support or back taxes.
    I lost this argument (a very long time ago) The attorneys' position was he's entitled to a percentage of the total settlement before any deductions, including an MSA or child support - he won.

    The breakdown looked something like this: (example)
    Total Amount Of Settlement $100,000.00
    Minus MSA Amount $20,000.00
    Minus 10% attorney fees $10,000.00
    -----------------------------------------------------
    Paid to claimant $70,000.00

    I do not seek an attorney fee out of the value of an MSA, ever. Most of my colleagues here in NC don't either.
    Do you exclude money deducted from the settlement for child support or back taxes from the percentage of your fees?
    If you're going to exclude money for the MSA from your fees, where does it stop?
    The argument I heard from the attorney was, he's entitled to a percentage of the total obtained on my behalf - including any deductions, it was worded that way in the retainer.
    I agree, it doesn't sound right but it happened and is still happening in my state.

    I understand his point though, if his fees where based on the percentage of what's left after deductions he could end up with nothing in some cases - some people lose their entire settlement to child support or back taxes.

    Tony
    Moderator Responses are based on my personal bias, experience and research - they may not be accepted in the legal community, always consult an attorney.

  6. #6
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    Default Re: Attorney Fee's in a Settlement

    I generally don't reduce my fees because the client failed to pay his child support or taxes and now has a lien coming out of the settlement. My fee contract assesses the contingent fee on the total amount of the settlement, but that is interpreted as not including the MSA. Now, having said that, I recently worked as long and hard trying to get a client's two child support liens reduced so that he could get a little money out of his settlement, than I had to work to get the settlement. He also had a Medicaid lien that had to be repaid. I eventually got his CS liens cut by about 55% so that a bit of his settlement could go into his own pocket. But he will still owe the remaining child support-- he will just have to pay it back over time, rather than out of his settlement.

    I don't charge a fee on the MSA money because of the nature of that money, but here in NC, the MSAs are generally done as an addendum to the main settlement and not "deducted from it." In other words, settlement discussions go like this: "We will accept $100,000 plus the approved MSA of $23,455" rather than "we will settle for $125,000 and pay the MSA out of it."
    Last edited by complwyr; 02-17-2017 at 12:10 PM.
    The North Carolina Court of Appeals has held that "In contested Workers' Compensation cases today, access to competent legal counsel is a virtual necessity." Church v. Baxter Travenol Labs, Inc., and American Motorists Insurance Company, 104 N.C. App. 411, 416 (1991).

    Bob Bollinger, Attorney at Law

  7. #7
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    Jan 2009
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    Default Re: Attorney Fee's in a Settlement

    I have heard it go both way, with most leaning toward not taking fee's from MSA. I was just curious if there is a set law, and or standard here in Ohio. I just remeber having a hard time figuring it out back when i was looking into it, so i thought i would just post it on here. If nothing else, it will help others out when they too reach this point and are trying to figure things out.

    Complwr,
    What i have before me is written that the cash payment to claiment is the amount $$$, which is less the MSA. It goes ont o say "in addition".... everything else that is involved, including the MSA amount follows.

  8. #8
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    Default Re: Attorney Fee's in a Settlement

    The best thing to do is come right out and ask your attorney, that way there's no surprises.
    This is just one of the reasons I became involved in this forum (way back in the dark ages)
    Back in the old days we just held on to our hats and went for the ride, we had no idea of what the hell was around the corner.

    Tony
    Moderator Responses are based on my personal bias, experience and research - they may not be accepted in the legal community, always consult an attorney.

  9. #9
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    Default Re: Attorney Fee's in a Settlement

    Agree. I am just trying to find out if people are doing you a "favor" or following the law

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