Hello, dear readers!  Just recently, your humble blogger overheard the following conundrum at one of the WCAB venues: while unrepresented, applicant had received 100% of the PD value as advances, and nothing was withheld as an attorney fee.  Applicant subsequently became represented, tried (in vain) to increase the PD rating, and ended up where he began, at which point it was time to settle.

But the applicant attorney wanted something for his efforts, however ultimately futile they proved.  The defendant, in response, said that there was nothing from which to draw an attorney fee, seeing how all the PD had already been advanced.  Furthermore, a C&R was not the ticket either: a lien from EDD which would have been paid as part of any C&R would have wiped out any moneys from which to draw an attorney fee as well.

Naturally, the applicant attorney agreed that he should have thoroughly reviewed the case and the facts before expending any effort – the parties shook hands and went their separate ways.  Just kidding, dear readers – trying to see if you’re awake!

Applicant’s counsel claimed that defendant failed to withhold advances for a (possible) attorney to come on the scene, and so owed the attorney fee in addition to rather than out of, the PD value.

Crazy stuff, no?  What’s a defendant to do?

Well, let’s talk about advances first.  Labor code section 4650(b)(1) provides that “[i]f the injury causes permanent disability, the first payment shall be made within 14 days after the date of last payment of temporary disability, except as provided in paragraph (2).”  Paragraph (2), by contrast, tells us that “[p]rior to an award of permanent disability indemnity, a permanent disability indemnity payment shall not be required if the employer has offered the employee a position that pays at least 85% of the wages and compensation paid tot eh employee at the time of injury or if the employee is employed in a position that pays at least 100 percent of the wages and compensation paid to the employee at the time of injury…”

In other words, defendants (at least now) don’t have to make advances if the injured worker is earning at least 85% of pre-injury wages for the same employer, or at least 100% of pre-injury wages for another employer.

But what if advances are due?  After all, as we know from Berry v. WCAB (1969) defendants are required to make advances unless there is reasonable doubt as to the existence of permanent disability (a requirement that section 4650(b)(2) eases, of course).

On the other hand, defendants are required to withhold an attorney’s fee from advances and benefits paid, and failure to do so might expose a defendant to paying the fee on top of the benefits.

So what is a defendant to do?  On the one hand, there is the Scylla of facing penalty for failing to advance the last 15% (and reserving it as an attorney fee).  On the other hand, there is the Charybdis of advancing all funds, and then having an attorney appear on the scene and demand additional payment for “failing to withhold.”

From your humble blogger’s research, it appears that there is no affirmative obligation to withhold 15% in permanent disability advances for an unrepresented injured worker.  Accordingly, the sounder practice would be to continue all advances to avoid penalty for unreasonably withholding.

Practically speaking, however, shouldn’t applicant attorneys be tasked with performing some sort of triage before accepting a case?  And, furthermore, if an applicant attorney takes a case, and, regardless of the effort, generates exactly $0 in results for his or her client… why should there be any fee at all?

My beloved readers may recall that I made the point, some time ago and resulting in many dirty stares and cancellation of party invitations, that applicant attorneys should not receive a fee when they fail to make gains on a settlement offer made when the applicant was unrepresented.

That’s my thinking on it, dear readers.  What are your thoughts?