Pursuant to the Texas Workers’ Compensation Act, TEX. LAB. CODE ANN. 401.001 et seq. (1989 Act), a contested case hearing was held in (city), Texas, on July 2, 1993, (hearing officer) presiding as hearing officer. The attorney (representing the claimant) requested the hearing solely to contest the decision of the disability determination officer (DDO) to reduce his fees. By affidavit (Interim TWCC-152), the attorney sought fees of $650.00 based on two hours and 10 minutes of work for claimant at a rate of $300.00 per hour. The DDO approved the number of hours as claimed, but reduced the hourly rate to $150.00 and approved fees of $330.00. The hearing officer found the $150.00 per hour rate to be reasonable for the services performed, but reduced the number of hours approved by 30 minutes which represented the time claimed by the attorney for submitting the fee approval application. The hearing officer found that the DDO should not have allowed this time because “it was not a service of direct benefit performed on behalf of the claimant” and approved fees of $250.00 as “reasonable and necessary” calculated at $150.00 per hour for one hour and 40 minutes.
In his appeal of the hearing officer’s decision, the attorney represents that his client (claimant), who did not appear at the hearing, has no objection to the fees originally charged ($650.00). He argues that the Commission has no legal or factual basis for finding as a matter of fact that $150.00 per hour is a reasonable rate for attorneys practicing workers’ compensation law in (city). Hence, this decision is arbitrary and capricious. He justifies his fee on the basis of 10 years’ experience doing personal injury and workers’ compensation practice in Texas. His standard fee is $300.00 per hour which he calculated from an initial fee of $75.00 per hour when he first began his law practice in 1984, to which he has added $25.00 per hour each succeeding year. He asserts that because of his expertise, he was sought out by the claimant and that he should not be penalized for being able to work faster and better than other attorneys.[1] He contends that for the Commission to deny him this compensation without providing evidence of what his time is worth is a denial of due process and amounts to involuntary servitude in violation of the United States Constitution. Finally, he asserts that, contrary to the conclusion of the hearing officer, his work in preparing the fee affidavit should be approved as a benefit to the claimant because without the affidavit there is no way to collect fees and without fees, the claimant would have no representation.
DECISION
We affirm the decision of the hearing officer.
Pursuant to Section 408.221 and 28 TEX. ADMIN. CODE 152.3 (Rule 152.3) attorney’s fees for representation of claimants must be approved by the Commission. Factors to be considered in approving fees and guidelines for maximum hours are contained in Section 408.221(c) and Rules 152.3 and 152.4 and include:
(1)the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal services properly;
(2)the fee customarily charged in the locality for similar legal services;
(3)the amount involved in the controversy;
(4)the benefits to the claimant that the attorney is responsible for securing; and
(5)the experience and ability of the attorney performing the services.
The standard of review of attorney’s fee approvals adopted by the Appeals Panel is “abuse of discretion.” Texas Workers’ Compensation Commission Appeal No. 92375, decided September 14, 1992. The test for abuse of discretion in the context of judicial review as enunciated by the Texas Supreme Court is “whether the court acted without reference to any guiding rules and principles.” Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985). We adopt this test for our review of decisions of hearing officers on attorney’s fees and look to the 1989 Act and Rules of the Commission for guiding rules and principles.
Although the precise nature of the claimant’s case is not evident from the record available to us, we note from the attorney’s affidavit that it was settled by informal resolution without Commission intervention. The Guidelines for maximum hours contained in Rule 152.4 establish at least nine hours for these services, well in excess of the amount claimed by the attorney.
The reasonableness of attorney’s fees, including the rate per hour, is a question of fact for the hearing officer to decide based on the evidence presented. In this case, the attorney was given the opportunity to present evidence on the reasonableness of his fees, but offered nothing about the novelty of the case, about any special complexities it presented or special skills required to secure the client’s rights. Nor was there evidence about the benefits, or their value to the claimant, obtained by the attorney. Finally, the attorney refused the invitation of the hearing officer to present evidence about fees customarily charged in the (city) area for these service, relying instead on his own fee schedule produced by yearly, formulaic raises. We do not doubt the attorney’s 10 years’ experience in workers’ compensation law. However, absent evidence on these points, we do not find under the circumstances of this case that the hearing officer abused his discretion or ignored the statutory guidelines in reducing the attorney’s hourly rate.
The attorney also appeals the decision of the hearing officer which disallowed one-half hour of the attorney’s time, at his regular rate, used to prepare the fee approval request application. This time was properly denied by the hearing officer pursuant to Rule 152.5(c). Without commenting on the reasonableness of charging the standard attorney hourly rate for preparation of billing documents,[2] we note only that we consider these costs to be overhead “not necessary for the preparation and presentation” of his client’s claim.
Finally, the Appeals Panel will not address Constitutional issues. Texas Workers’ Compensation Commission Appeal No. 92275, decided August 11, 1992.
For the reasons set forth above, the decision of the hearing officer is affirmed.
Thomas A. Knapp – Appeals Judge
Susan M. Kelley – Appeals Judge
DISSENTING OPINION:
In spite of the great respect I hold for my colleagues in the majority, I am constrained to dissent in part. I agree with the majority in regard to all issues in the appeal with the exception of the majority’s apparent interpretation of 28 TEX. ADMIN. CODE 152.3 (Rule 152.3) to mean that the preparation of an Application and Order for Attorney Fees (TWCC-152) “to be overhead `not necessary for the preparation and presentation’ of [a] client’s claim.” Such a definition of overhead in my view has no basis in English, law, logic, economics, accounting or business.
Overhead is generally considered the fixed costs of a business–those costs which would be incurred whether or not the business produces anything or not. Rent for a place of operation is generally considered such a cost. Law, being a profession, cannot always be analyzed in the same terms as the production of widgets, but when the term overhead is applied to law it does have a meaning in terms of business, accounting and economics. It means those costs which cannot be attributed to the handling of a particular case. Rent for a space to operate would certainly be one such cost. Time spent in preparation of a law firm’s federal income tax return would be another such cost. In the law time must be considered a cost because what lawyers sell is their time (it has been said this is because lawyers have nothing else to sell). Time spent on one case is time taken away from another case. For the attorney, the quotation from Benjamin Franklin to the effect that one shouldn’t waste time as it is the stuff of which life is made, is particularly poignant.
The beginning point is, therefore, whether or not the time spent in preparation of a TWCC-152 is attributable to a particular case or part of that time spent on the general maintenance of a law practice. To me, the answer to that question is obvious. An attorney may spend a career practicing law without ever filling out a TWCC-152. What triggers the filling out of this form is the handling of a Texas workers’ compensation case linked with the requirements of TEX. LAB. CODE ANN. §§ 408.221 and 408.222, as well as Rule 152.3(a), that the Texas Workers’ Compensation Commission (Commission) approve an attorney’s fees. Further, the aforementioned statutory provisions and rules clearly provide for a separate TWCC-152 to be filed in each and every workers’ compensation case handled by an attorney. Clearly the time spent in preparation of each TWCC-152 is attributable to a particular case. Further, it seems to me fundamentally unfair to require an attorney to file a form as part of handling a case and at the same time to forbid that attorney to charge for the time required to prepare the form.
The majority cites only one of our prior decisions in support of doing this–Texas Workers’ Compensation Commission Appeal No. 93469, decided July 23, 1993. This case dealt with an attorney who claimed an inordinate amount of time (14 hours) for the preparation of a TWCC-152. I would argue that in criticizing the reasonableness of the number of hours charged for the preparation of the TWCC-152 (with which I heartily agree), rather than in stating that no time can be charged for the preparation of a TWCC-152, the Appeals Panel in Appeal No. 93469, supra, by implication recognized that a reasonable fee can be charged for the preparation of a TWCC-152. Further, we have held in Texas Workers’ Compensation Commission Appeal No. 92284, decided August 13, 1992, that the preparation of pertinent documents are “legitimate services for which an attorney may claim a fee.”
In the present case, I would find that the .5 hours charged by the claimant’s attorney for the preparation of the TWCC-152 to be reasonable and reverse the hearing officer in part, rendering to allow the attorney in the present case to charge .5 hours for the preparation of the TWCC-152 at the rate approved in the majority decision.
Gary L. Kilgore – Appeals Judge
- At the hearing, the attorney asserted that the Commission has selected $150.00 per hour as the maximum rate it will pay any attorney in a workers’ compensation case. He offered no evidence or pronouncement by any Commission official to support this contention and on appeal requests “a fining (sic) of fact that the Texas Workers’ Compensation Commission has not set $150.00 as a maximum rate. . . .” The hearing officer found only that $150.00 per hour is a reasonable rate for attorneys in (city), County, Texas. He made no finding or conclusion of law that this rate was the maximum that would ever be approved in any case. It was neither an issue raised at the contested case hearing nor decided by the hearing officer. It is not addressed in this appeal. Section 401.202(c) and Rule 143.3(a)(2). ↑
- As indicated in Texas Workers’ Compensation Commission Appeal No. 93469, decided July 23, 1993, a significant amount claimed for preparation of the fee approval application on its face strongly challenges notions of reasonableness. ↑