Beware of Fees on Fees in Oregon Workers’ Compensation Cases
In the case of Taylor v. SAIF, 329 Or App 135 (2023) (Taylor II), the Court of Appeals overturned the decision of the Workers’ Compensation Board, which had initially ruled that the claimant’s attorney should not receive a reasonable fee for time spent exclusively contesting the Board’s attorney fee award.
The claimant in Taylor successfully overturned a claim denial before the Oregon Workers’ Compensation Board. The Board awarded an $8,000 attorney fee which claimant appealed to the Court of Appeals. On its initial judicial review, the Oregon Court of Appeals found the Board’s order did not adequately explain the attorney fee awarded and, therefore, was not supported by substantial reason. The Court reversed and remanded to the Board for reconsideration. Taylor v. SAIF, 295 Or App 199, 204, (2018), rev. den., 365 Or 194, (2019) (Taylor I).
On remand, the Board increased the attorney fee award for counsel’s services related to the rescission of the initial claim denial. However, the Board denied claimant’s request for attorney fees for services related to litigating the amount of the attorney fee award before the Board and the Court of Appeals. Claimant appealed the Board’s order, asserting entitlement to additional attorney fees incurred while litigating the attorney fees.
On review, the Court of Appeals determined claimant’s attorney was entitled to recover attorney fees for litigating the reasonableness of a fee award under ORS 656.386(1). Based on the rationale presented in Peabody v. SAIF, 326 Or App 132, rev den, 371 Or 511 (2023) (Peabody II), the majority asserted that a claimant has the right to receive reasonable fees associated with contesting the awarded fee amount for obtaining a rescission of a denial prior to an Administrative Law Judge’s decision. However, in a lengthy dissent, Judge DeVore asserted that the legislative intent underlying the workers’ compensation fee statutes indicate the award of attorney fees for prevailing on the issue of attorney fees is only limited to fee appeals initiated by an insurer.
Take-Away for Employers and Claim Examiners:
The Court of Appeals’ decision in Peabody II and Taylor II signals a strong departure from the previously well-established workers’ compensation rule against recovery of attorney fees incurred on a claimant’s appeal where attorney fees are the only issue.
The decisions will likely lead to an increase in claimant appeals of attorney fee awards. Employers and claim examiners should consider the trending increase in attorney fee awards and potential for added litigation related to fees during settlement negotiations.
If you have any questions about attorney fee awards in Oregon, feel free to contact me at or 971-867-2728.
