One of the most unfair aspects of Pennsylvania Workers’ Compensation has always been how injured workers must defend petitions which address only medical benefits. While injured workers receiving total disability benefits can easily retain an attorney (paying a portion, usually 20%, of such benefits as the fee), injured workers who continue to work, and lose no wages, must decide whether to pay an attorney from their pocket or risk losing access to medical benefits for the work injury. However, this situation has now changed, thanks to a decision by the Supreme Court of Pennsylvania.
The PA Workers’ Compensation Act (“Act”) has typically been interpreted to allow attorney fees to only be assessed against the workers’ comp insurance carrier if there is a showing that the petition at issue was “unreasonable.” Thus, the award of attorney fees, chargeable to the insurance company, was the exception to the rule. This despite the fact that Section 440 of the Act says:
“In any contested case where the insurer has contested liability in whole or in part, including contested cases involving petitions to terminate, reinstate, increase, reduce or otherwise modify compensation awards, agreements or other payment arrangements or to set aside final receipts, the employe or his dependent, as the case may be, in whose favor the matter at issue has been finally determined in whole or in part shall be awarded, in addition to the award for compensation, a reasonable sum for costs incurred for attorney’s fee, witnesses, necessary medical examination, and the value of unreimbursed lost time to attend the proceedings: Provided, That cost for attorney fees may be excluded when a reasonable basis for the contest has been established by the employer or the insurer.” [Emphasis added]