Supreme Court of Maryland Clarifies the Calculation of Attorney’s Fees in Workers’ Compensation Cases
The Supreme Court of Maryland held that, in calculating an award of attorney’s fees for representing an injured worker under Maryland’s Workers’ Compensation Act (“the Act’), an attorney is entitled to a percentage of the compensation awarded by the Commission – after applying the statutory offset in §9-610(a)(1) of the Labor and Employment Article of the Annotated Code of Maryland.
L&E §9-610(a)(1) provides Maryland’s Labor & Employment § 9-610(a)(1) codifies what is often called the “offset doctrine,” which operates to prevent “duplicative recovery” by an injured worker. Specifically, if an employee is awarded a general disability retirement benefit (like accidental disability retirement- “ADR”) due to a work injury, the amount of the ADR benefit can offset any workers’ compensation award arising from the same injury.
In the instant case, Petitioners Mark Zukowski and Joshua Ruggiero were both Anne Arundel County police corporals who sustained injuries in the line of duty in 2018. Each received ADR benefits from the County and separately sought workers’ compensation benefits through the Maryland Workers’ Compensation Commission.
Because ADR benefits paid exceeded the amount of the workers’ compensation awards, much (or all) of their workers’ compensation benefits were subject to an offset under Md. Code Ann., Labor & Employment § 9 610(a)(1). Both claimants were represented by the same attorney, who sought fees based on the full amount of compensation initially awarded before offsets were applied.
The Supreme Court of Maryland granted a writ of certiorari to resolve the question as to whether an attorney’s fee under § 9 731 should be calculated based on the total awarded amount before any benefits are deducted, or only on the amount remaining after those deductions. In other words, should “compensation” include the full award before offsets, or just the net amount after offsets like ADR benefits?
Zukowski is the first Maryland high court decision to explicitly rule that attorney’s fees must be calculated on the post-offset amount, reinforcing the generally accepted definition of the term “compensation” as referenced in the Workers’ Compensation Act (WCA) means actual monetary benefits payable to the injured worker. This decision aligns with Maryland’s public policy against double recovery and the general principle that an award for fees should correspond to the benefit actually payable to a claimant.
While the Courts holding in Zukowski makes clear an injured worker’s attorney is not entitled to an automatic fee for services rendered based on the gross amount of an award for compensation prior to offset, it also acknowledged that unlike other states, Maryland does not provide for an alternative means and method for an injured worker’s attorney to collect a fee in circumstances where, for example, an offset results in a zero dollar award of compensation and makes clear: the power to altar the statutory scheme governing attorney’s fees under the Act belongs with the legislature and General Assembly.
Whether the General Assembly takes action in future to address the issue of whether an attorney may seek recovery of additional fees through alternative means in offset cases remains to be seen, but the Court’s opinion makes one things absolutely clear: The liability for payment of any attorney’s fee falls squarely on the Claimant and NOT the Employer and or Insurer.
Written by Kara K. Parker, Esq.
