Until recently, the District of Columbia workers’ compensation subrogation statute, found at § 32-1535, was silent on how or whether attorneys’ fees/costs are to be charged or apportioned when the worker files suit. When an employer or workers’ compensation insurance carrier initiates an action or negotiates a settlement when it is received and assigned, because the employee has failed to file a claim within the first six-month limitation period, the statute clearly allows the employer or the insurance carrier to recover off the top reasonable attorneys’ fees/costs.
As of May 12, 2016, however, the statute was amended to include a new subsection (f-1) which reads:
(f-1) If the person entitled to compensation institutes proceedings within the period described in subsection (b) of this section and recovers an amount against a third person, the costs of litigation and attorneys’ fees shall be proportionally shared between the person entitled to compensation, or the employee’s eligible survivors or legal representative, and the employer relative to the amount each received in the settlement against the third person. D.C. Code Ann. § 32-1535(f-1).
Previous case law indicated that when an employer or employer’s workers’ compensation carrier joins in a suit brought by an employee within the six-month limitation period, the cost of litigation could be divided between the employee and employer or employer’s workers’ compensation carrier, but that division could not be compelled unless the employer or carrier and the employee agree to the division. Nguyen v. Liberty Mut. Ins. Co., 611 A.2d 541 (D.C. 1992). However, the new subsection above allows the employee to force the carrier to share pro rata in litigation costs and attorneys’ fees.
If you should have any questions regarding this article or workers’ compensation subrogation in general, please contact Gary Wickert at [email protected].