The Utah Supreme Court has struck down an attorney fee schedule for workers' compensation cases and the law that authorized it.
The court ruled on Wednesday in a case challenging the sliding-scale fees and a fee cap established by the Utah Labor Commission. The Legal Profession Blog has highlights from the opinion (PDF).
The supreme court said it has the exclusive authority to govern law practice under the state constitution, and that includes the regulation of attorney fees. The separation of powers doctrine bars the legislature from giving that power to the labor commission, the court concluded.
The schedule set attorney fees at 25 percent for the first $25,000 of the award, 20 percent for the next $25,000 of the award, and 10 percent for awards over $50,000. The fee cap is $18,590.
The fee schedule was intended to protect unsophisticated litigants. Despite those good intentions, the court said, many attorneys are economically unable or unwilling to take on injured workers' cases. The schedule limits not only the quantity of workers' comp lawyers, it also limits their quality, the court said.
Lawyers have an incentive to settle once they reach the capped amount, and they may be opposed by lawyers for employers and insurers with no fee limitations, according to the court.
The court said it was declining to enact its own fee schedule at this time.