• Employer May Be Shielded from Claims for Attorney's Fees Under the Longshore and Harbor Workers' Compensation Act ("LHWCA") Upon Payment of Any Amount of Compensation to Claimant
  • July 8, 2014 | Author: Matthew S. Lejeune
  • Law Firm: Jones Walker LLP - New Orleans Office
  • The LHWCA is a no-fault compensation scheme under which an employer is required to pay medical and disability benefits to an employee for work-related injuries and illnesses without considering the fault of either party. In exchange for these guaranteed benefits, the employer is immune from tort actions brought by injured employees thus limiting an employer's exposure to damages to only those medical and disability benefits provided by the LHWCA. An injured employee can also recover reasonable attorney's fees from his employer under certain circumstances. The purpose of these fee-shifting provisions is to promote quick resolution of claims and to deter litigation.

    Under the LHWCA, an injured employee can recover attorney's fees from his employer under two limited circumstances. First, an injured employee may recover attorney's fees pursuant to 33 U.S.C. § 928(a) "if the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the deputy commissioner, on the ground that there is no liability for compensation" under the LHWCA. Second, an injured employee may recover attorney's fees from his employer under 33 U.S.C. § 928(b) when "following [an informal] conference the deputy commissioner or Board shall recommend in writing a disposition of the controversy ... [and] the employer or carrier refuses to accept such written recommendation within fourteen days after its receipt."

    The Fourth Circuit Court of Appeals recently had the opportunity to clarify the meaning of the term "any compensation" as used in § 928(a) in Lincoln v. Director, OWCP, 744 F.3d 911 (4th Cir. 2014). In Lincoln, the employee filed a claim for benefits under the LHWCA alleging that he had sustained work-related, 10% binaural hearing loss. Within 30 days of receiving notice of the claim, the employer paid compensation in the amount of $1,256.84 for 0.5% binaural hearing loss and one week of permanent partial disability pay. The employer made no further payments. A settlement was ultimately reached acknowledging a 10% binaural hearing loss and awarding $23,879.96 to the injured employee. Following the settlement, the employee filed a petition requesting $3,460.00 in attorney's fees under § 928(a).

    The employee argued, among other things, that the partial payment was not "any compensation" under § 928(a) and that the partial payment was not "compensation" since it was simply an attempt by the employer to avoid fee liability. The Fourth Circuit rejected the employee's arguments finding the term "any compensation" to be unambiguous and to clearly encompass an employer's partial payment of compensation. Thus, "Section 928 provides an employer a safe harbor: if it admits liability for the claim by paying some compensation to the claimant for a work-related injury and only contests the total amount of the benefits, it is sheltered from fee liability under § 928(a). An employer's refusal to pay compensation must be absolute in order for it to face possible fee liability under § 928(a)." Further, while a partial payment of $1 paid solely in an attempt to avoid attorney's fee liability would not constitute "compensation," a partial payment based on the claimant's alleged injury and clearly tethered to the underlying claim such as the payment in Lincoln qualifies as "compensation" under § 928(a).

    The Fourth Circuit's holding in Lincoln comports with the Fifth Circuit's opinion in Andrepont v. Murphy Exploration and Production, Co., 566 F.3d 415 (5th Cir. 2009). In the factually similar case of Andrepont¸ the Fifth Circuit held that attorneys' fees will be awarded under section 928(a) "only if the employer believes it is not liable for any compensation or 'no compensation is owing' regardless of the specific type of compensation requested. Therefore, if the employer admits to liability for the injury and tenders any compensation, it is not liable for attorneys' fees under section 928(a). Accordingly, if the employer pays some partial compensation during those thirty days, thereby admitting to liability for the injury, section 928(a) does not apply."

    These cases stress the importance of timely payment of benefits to LHWCA covered employees who are injured in uncontested workplace accidents. When an accident has clearly occurred and the only dispute is over the amount of benefits owed to the employee, the timely payment of even one partial disability payment can save an employer thousands of dollars in attorney's fees.