What the panel ordered
Reconsideration granted; January 30, 2024 decision rescinded; matter returned to trial level for recalculation of attorney's fees including future COLAs.
Applicant sought reconsideration of the January 30, 2024 Findings and Order re Attorney Fees, contending the attorney's fees calculation did not include future COLAs; the WCJ recommended denial of the petition; the Board granted reconsideration and remanded for recalculation of attorney's fees including COLAs.
This docket was decided more than once. Shown here is the latest released decision; we also hold October 17, 2023, November 2, 2022.
What was disputed, and how it came out
Each issue the panel decided, with the reasoning it gave. An outcome is what this panel did on this record — not a rule, and not a prediction.
The Board found the WCJ erred in excluding future COLAs from the attorney's fees calculation, as the award contemplates lifetime indemnity payments including COLAs, and remanded for recalculation including a reasonable estimate of future COLAs.
The facts that decided it
What the panel treated as outcome-determinative, and which side it favoured.
The award contemplates lifetime indemnity payments including COLAs under Labor Code section 4659(c).
Favours Applicant prevailed
This fact supports including future COLAs in the attorney's fees calculation as the award's value depends on COLAs.
From the decision · page 7Here, we are persuaded that a similar analysis applies. As was the case in Wilson, the award contemplates lifetime indemnity payments to applicant, including the COLA increases specified in section 4659(c). The DEU has estimated the value of the award, assuming a 3.0% average SAWW, as exceeding 1.14 million dollars. We also observe that in amending section 4659(c) in 2003 to provide for cost of living adjustments linked to the SAWW, the legislature did not change the criteria for assessing attorney's fees section found in section 4906(d) or alter the present value discount described in section 5101(b). We are thus persuaded that in the present matter, a reasonable assumption of future COLA increases, based on a historical assessment of the SAWW,
The WCJ calculated attorney's fees excluding future COLAs, resulting in a lower present value of the award for fee calculation.
Favours Applicant prevailed
Excluding COLAs undervalues the award and attorney's fees, leading to reconsideration.
The rules the panel named
Authorities as the decision cited them, with how this panel applied each one.
Labor Code section 4906(d); California Code of Regulations, title 8, sections 10775 and 10844
Attorney's fees must be reasonable considering responsibility, care, time, and results obtained by attorney.
Applied to assess reasonableness of attorney's fees including COLAs.
Labor Code section 5101(b); Labor Code section 4659(c)
Present value discount for commutations compensates carrier for loss of investment; COLAs insulate award from inflation.
Distinguished the purpose of present value discount and COLAs in attorney fee calculation.
From the decision · page 3The WCJ's Report avers the present value discount mandated by section 5101 is a discount for the carrier to compensate it for the loss of investing monies commuted and paid to the applicant as a lump sum, while the COLAs of section 4659(c) are designed to insulate applicant's award of disability from inflation and the devaluation of the dollar. (Report, at p. 3.) The WCJ notes that pursuant to California State Bar Rule Sec. 7.955 and section 4903(a), "the essence of a proper attorney's fee is what is reasonable," and that attorney's fees should be reasonable "for both the employee and the attorney." (Id. at p. 4.) The WCJ observes that fees requested by applicant's attorney would "erode applicant's benefits even further making it more difficult to survive," and that "applicant counsel's efforts did not obtain the COLA for applicant as LC 4659(c) is a statutory provision for which all applicants who receive a life pension are entitled." (Id. at p. 6.)
What proof carried it
The evidence the panel weighed, by kind.
Testimony of DEU rater on attorney fee calculations based on projected SAWW adjustments.
From the decision · page 2On December 18, 2023, the parties returned to trial, and offered into evidence attorney fee calculations relying on an annual projected uniform state average weekly wage (SAWW) adjustment of either 3.00% or 4.33%. (Minutes of Hearing (Further) and Summary of Evidence (Minutes), dated December 18, 2023, at p. 2:8.) The parties adduced the testimony of the Disability Evaluation Unit (DEU) rater and submitted the matter for decision.
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About this page
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