June 1, 2022
by Elyse Lopez

Oregon WCD Issues Proposed Draft Rules for Dancingbear

Last October, SBH attorney Anna McFaul wrote a blog covering the Dancingbear v. SAIF decision issued by the Oregon Court of Appeals. As you likely recall, the Court of Appeals ultimately determined that a worker’s attorney can be awarded an assessed fee under ORS 656.383(1) when that attorney obtains additional temporary disability compensation following reconsideration proceedings. The Court determined that awarding attorney fees under ORS 656.383(1) and ORS 656.268(6)(c) in the same reconsideration matter would not be inappropriate or duplicative because those statutes each address a different kind of attorney fee (e.g, assessed fee vs. out of compensation fee).

Since the Dancingbear decision came out, the Workers’ Compensation Division (WCD) has been working to create administrative rules that reflect the court’s ultimate holding. The initial proposed draft of the rule was published for public comment in March 2022. The WCD created a matrix upon which to calculate a reasonable attorney fee if the order on reconsideration modified an award of temporary disability benefits. The WCD also outlined the specific criteria that would need to be met in order for an attorney fee to be awarded under ORS 656.383(1) and the new proposed rule OAR 436-001-0438. The claimants’ bar pushed back on WCD’s proposed rule, arguing that the matrix and criteria for determining a “reasonable attorney fee” would not actually accomplish this because there was too much discretion for the insurer to determine the amount of the attorney fee. The claimants’ bar asserted that the Director had authority and jurisdiction over reconsideration proceedings and there should be a fee schedule for insurers to follow in assessing attorney fees under this rule. Another point of contention for the claimants’ bar was the ability to dispute the amount of a “reasonable attorney fee” calculated by the insurer. Claimants’ attorneys either wanted the ability to provide input or comment, or the ability to request a hearing that would allow them to submit additional evidence on the issue.

Following the March hearing, WCD revised the proposed rule and is now seeking public comment to the changes – more specifically, the WCD has requested public comment from insurers/administrators as to whether other options should be considered to achieve the rule’s “substantial goals.” Below is a summary of the major changes to the proposed rule:

  • An attorney fee under ORS 656.383(1) is payable after an order on reconsideration is issued. If attorney fees under ORS 656.383(1) are at issue at hearing or on Board review, the rules in OAR chapter 438 apply.
  • The WCD kept the matrix and formula for calculating the fee but added a provision that the fee is subject to a maximum of $5,600. WCD also added that the maximum fee will be adjusted annually by the same percentage (if any) as the average weekly wage.
  • WCD explained that the matrix and formula is intended to result in a reasonable fee that considers the time devoted by the attorney to the issue of temporary disability compensation that is proportionate to the benefit to the worker.
  • WCD will allow for a statement of services to be submitted and considered by the Director; however, the worker’s attorney must submit the statement within 14 days of the start of reconsideration proceedings. If the Director does not receive the statement within the 14 day period, there is a presumption that the attorney devoted 1-2 hours to the issue of temporary disability compensation for purposes of later calculating an attorney fee under ORS 656.383(1). This is in direct response to the concerns raised by the claimants’ bar.
  • If a party disputes entitlement to or the amount of an attorney fee under this rule, that party may request a hearing. The Board will not be bound by OAR 436-001-0438 in determining whether a fee under ORS 656.383(1) is due or in determining the amount of that fee. This is in direct response to the concerns raised by the claimants’ bar.
  • An attorney fee awarded under ORS 656.383(1) must be paid in addition to an attorney fee awarded under ORS 656.268(6)(c). This is the essential holding of the Dancingbear

Proposed Matrix

  • Base Amount for Time Devoted by Attorney
Up to 2 hours $500
2.1 to 4 hours $1,000
4.1 to 6 hours $1,500
6.1 hours+ $2,000
  • Percentage of Additional Temporary Disability Compensation Benefits Due & Payable to the Worker
If additional amount of temporary disability compensation benefits due and payable is: Add the following percentage of additional temporary disability compensation benefits due and payable:
Up to $500 10%
$501-$1,000 15%
$1,001-$2,500 20%
$2,501-$5,000 25%
$5,001+ 30%

 

Keep in mind: the proposed rule caps the maximum attorney fee to be awarded at $5,600 (subject to an annual adjustment consistent with the average weekly wage adjustment). The WCD believes that attorney fees under this rule will require insurers and self-insured employers to pay fees “in a limited number of cases” after reconsideration proceedings conclude. Based on the matrix, WCD has estimated an annual cost of $90,000 for insurers and self-insured employers if this proposed rule is adopted. WCD is specifically looking for testimony on the impact to insurers and self-insured employers.

A hearing is set for June 16, 2022 at 11:00 a.m. in Salem; however, a Zoom link (passcode 431059) is also available for those who cannot attend the hearing in person. WCD is also accepting written comments from the public until June 22, 2022. SBH highly encourages all interested insurers/administrators/employers to provide testimony at the hearing or submit written comments for WCD’s consideration.

If you have any questions about the proposed rule or would like to discuss providing written or oral testimony for the hearing, please feel free to contact our office. You can call 503-412-3111 or email me at .

Posted by Elyse Lopez.