Acting New Jersey Governor Nicholas Scutari Signed Legislation Increasing Attorneys’ Fees up to 25%
On August 22, 2024, Acting New Jersey Governor Nicholas Scutari signed legislation amending the existing N.J.S.A. 34:15-64 to increase the cap on attorneys’ fees from 20% to 25% of the settlement award. This amendment was effective immediately.
Specifically, the statute reads “the official conducting any hearing under this chapter may allow to the party in whose favor judgement is entered, costs of witness fees and a reasonable attorney fee, not exceeding 25 percent of the judgement.”
The amended statute further reads the change “shall take effect immediately and shall apply to all claims pending on or after the date of enactment.”
Based on the plain reading of the statute, the 25% fee is to be applied to all pending or open claims as of August 22, 2024 regardless of their litigation status.
Prior to the amendment, Courts had discretion to determine the total attorneys’ fee that should be awarded up to a cap of 20%. Traditionally, Courts consistently awarded a fee of 20% of the settlement total and apportioned that fee to be paid 40% by Petitioner and 60% by Respondent.
As an example, if the award was $25,000.00, the counsel fee would be 20%, or $5,000.00. Petitioner would pay 40%, or $2,000.00 and Respondent would pay 60%, or $3,000.00.
If Courts remain consistent, this amendment likely will result in awards of 25% attorneys’ fee with Petitioner paying 40% of that fee and Respondent shouldering the remaining 60%.
However, with the increasing statutory value of awards over the years providing the injured worker with more money at settlement, the question becomes whether Respondent should be responsible for 60% of the overall counsel fee. This 40/60 split traditionally applied is not required by statute and has simply been adopted by most Courts throughout the state and accepted by most practitioners as the common practice.
This amendment also, notably, does not take into account any impact on countless claims where Petitioner and counsel already have an existing fee agreement. The impact this amendment will have on pending and new cases has yet to be seen.