803 KAR 25:070. Charges for attorneys.

 

      RELATES TO: KRS 342.320

      STATUTORY AUTHORITY: KRS 342.260

      NECESSITY, FUNCTION, AND CONFORMITY: KRS

342.260 requires the Workers' Compensation Board to prepare such rules and

administrative regulations as it considers necessary to carry on its work and

for carrying out the provisions of KRS Chapter 342. KRS 342.320 requires the

Workers' Compensation Board to approve the payment of the attorney's fee in any

case involving benefits under KRS Chapter 342 and to commute the final payments

of benefits payable under the award to a lump sum for that purpose. KRS Chapter

342.120 provides the method by which an employer or its insurance carrier and

the Special Fund share liability for awards for injuries occurring and disabilities

arising on or after July 15, 1982. The function of this administrative

regulation is to establish a mechanism for crediting the above referenced parties

for the payment of attorneys' fees in these cases.

 

      Section 1. Credit for Lump Sum Payment of

Charges by Attorneys. A party defendant shall be entitled, without further

order of the board, to credit for the lump sum value of any attorney's fee

paid. The procedure for payment of attorney fees and the impact of such payment

on weekly benefits shall be as follows:

      (1) The Department of Labor, Office of

Workers' Claims, Division of the Workers’ Compensation Funds, shall calculate

the credit for attorney's fee as follows:

      (a) Number of weeks as awarded due in

future (do not include payments payable prior to attorney fee award) = X weeks.

      (b) Obtain a lump sum of X (X weeks on

lump sum table) = Z weeks.

      (c) Divide amount of attorney fee by

amount due per week = Z weeks.

      (d) Y weeks minus Z weeks = Z weeks.

      (e) Look in table on lump sum and find A

weeks in the Present Work column of the chart and then take the figure in the

weeks column of the chart = B weeks, the total number of weeks of actual

remaining award payments by parties defendant before the credit causes cessation

of award payment checks.

      (f) X minus B = C weeks, the number of

weeks of benefit cessation required to equal the statutory credit.

      (2) The Department of Labor, Office of

Workers' Claims, Division of Workers’ Compensation Funds, shall calculate the

employer's credit for attorney's fee as follows:

      (a) Number of weeks due from employer or

insurance carrier in future pursuant to KRS 342.120 (do not include payments

payable prior to attorney fee award) = X1.

      (b) Obtain a lump sum of X1 (X1

weeks on lump sum table = Y1 weeks.

      (c) Divide amount of attorney fee by

amount due per week = Z weeks.

      (d) Multiply Z weeks by employer's

percentage of award = Z1 weeks.

      (e) Y1 weeks minus Z1

weeks = A1 weeks.

      (f) Look in table on lump sum and find A1

weeks in the Present Worth column of the chart and then take the figure in the

weeks column of the chart = B1 weeks, the number of weeks yet to be

paid by the employer or the insurance carrier before the Special Fund begins to

pay disability benefits.

      (3) The calculations set forth in

subsections (1) and (2) of this section shall be completed by the Division of

the Workers’ Compensation Funds and the results forwarded to the other payers,

as well as the plaintiff. Any disagreements as to the application of the

formula shall be resolved by the board upon motion by any party. Special Fund's

notice shall include the following information:

      (a) Attorney fee to be paid by each

party. The period of time for which each party defendant will be responsible

for disability benefit payment and, in cases involving lifetime benefits, the

date upon which benefits payments will be reinstituted by the Special Fund

after taking credit for the amount advanced to pay the attorney's fee in a lump

sum.

      (4) When the defendant payor or payers

has fulfilled its obligations as reduced pursuant to subsection (2) of this

section, payments will commence by the Special Fund (there will be no stoppage

to recover advance attorney fee payments at this time). The Special Fund shall

continue weekly benefit payments until such time as the number of weeks

remaining in the specified benefit period or the life expectancy as determined

by mortality tables approved by the Workers' Compensation Board, multiplied by

the weekly benefit rate is equal to the total attorney fee and discount paid by

all payers on behalf of the injured worker. In claims where benefits are

payable for a lifetime, the weekly benefit payments will be reinstituted by the

Special Fund at such time as the payor surpasses the life expectancy as

determined by the mortality table approved by the Workers' Compensation Board

and shall continue until terminated by death or order of the Workers' Compensation

Board.

      (5) No part of this section should be

viewed as a limitation on the party's right to negotiate a settlement subject

to statutory approval by the Workers' Compensation Board. (10 Ky.R. 509; eff.

11-2-83; TAm eff. 8-9-2007.)