Could a lawyer charge and collect a contingent fee from a workers' compensation claimant that exceeded the fee the Industrial Commission allowed?

Plain-English summary

The inquiry grew out of a Workmen's Compensation matter. A lawyer had contracted with a claimant for a fee, contingent on recovery, of fifty per cent of the award. The Industrial Commission made a three-hundred-dollar award, the claimant paid the lawyer one hundred and fifty dollars under the contract, but in making the award the Commission had limited the attorney's fee to twenty per cent, or sixty dollars. The Commission then ordered the lawyer to refund ninety dollars.

The Board treated the question as the application of Section 13364, O.S.1931 (85 Okl. St. Ann. § 30) to the professional conduct of a bar member. It noted that the Commission's jurisdiction under that section had been limited to attorney fees required to be paid from, or sought to be enforced against, the proceeds of an award to an injured workman, citing Carr v. State Industrial Commission. The section was intended to protect injured employees and their families and to prevent the dissipation of the proceeds of awards, citing Yeiser v. Dysart.

The Board concluded that to collect or receive from the proceeds of an award an attorney's fee in excess of that allowed by the Commission would subject the offending member of the bar to disciplinary proceedings.

Currency note

This opinion was issued in 1934, decades before Oklahoma replaced its original Rules of Professional Conduct (patterned on the ABA Canons of Professional Ethics) with the Oklahoma Rules of Professional Conduct (adopted 1988) and the later Ethics 2000 revisions. It also turned on a specific 1931 statute governing workers' compensation attorney fees, which has since been recodified and amended. Subsequent rule and statutory amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Could an Oklahoma lawyer keep a fifty-percent contingent fee on a workers' compensation award in 1934?

A: Not from the proceeds of the award. The opinion held that collecting a fee greater than the Industrial Commission allowed (here, twenty per cent) from the award proceeds would subject the lawyer to disciplinary proceedings.

Q: What was the source of the fee limit?

A: Section 13364, O.S.1931 (85 Okl. St. Ann. § 30). The opinion explained that the Commission's jurisdiction under that section reached fees paid from, or enforced against, the proceeds of a workman's award, citing Carr v. State Industrial Commission.

Background and rules framework

The opinion did not turn on a numbered Rule of Professional Conduct; it applied Section 13364, O.S.1931, the workers' compensation statute that empowered the State Industrial Commission to fix and limit attorney fees payable out of an injured worker's award. The Board treated a violation of that statutory fee limit as professional misconduct. The opinion predates the Model Rules and made no Model Rule citation.

Citations and references

Statutes:

• Section 13364, O.S.1931 (85 Okl. St. Ann. § 30): Industrial Commission authority over attorney fees paid from a workman's award.

Cases:

• Carr v. State Industrial Commission, 157 Okl. 140, 11 P.2d 134, on the limits of the Commission's jurisdiction over attorney fees.
• Yeiser v. Dysart, 267 U.S. 540, 45 S.Ct. 399, 69 L.Ed. 775, on protecting the proceeds of awards to injured workmen.

See also

• Okla. Bar Ethics Op. 6: Remitting part of a foreclosure fee to the client
• Okla. Bar Ethics Op. 7: Returning collected fees to a loan company

Source

• Landing page: https://www.okbar.org/ethics/ethics-opinion-no-71/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Adopted May 25, 1934

The Board of Governors is in receipt of a request for an Advisory Opinion growing out of the following facts:

A member of the State Bar entered into a contract with a person having a claim which he sought to enforce before the State Industrial Commission under the Workmen's Compensation Act. The member of the Bar entered into a written contract with such person whereby the claimant agreed to pay as a fee, contingent upon recovery fifty per cent of the award. The award was made, the money paid, i. e. three hundred dollars, whereupon the claimant paid the member of the Bar, pursuant to the contract, the sum of one hundred and fifty dollars. In making the award the Industrial Commission limited the attorney's fee to twenty per cent of the recovery, or to sixty dollars. Upon learning the facts, the State Industrial Commission entered an order that the member of the Bar refund to the claimant the sum of ninety dollars.

It would appear that the query seeks an opinion upon the ethics of a member of the Bar who (a) contracts for a fee with a claimant under the Industrial Compensation Act in excess of the compensation allowed by the Commission; and (b) collects from the claimant the contract fee, which is paid by the claimant from the proceeds of the award.

The query involves an application of Section 13364, O.S.1931, 85 Okl. St. Ann. § 30, to the professional conduct of a member of the Bar. The jurisdiction of the Industrial Commission under that Section has been limited to attorneys' fees which are required to be paid from or sought to be enforced against the proceeds of an award to an injured workman. Carr v. State Industrial Commission, 157 Okl. 140, 11 P.2d 134. The provisions of the Section were intended to protect injured employees and their families. It was intended to prevent the dissipation of the proceeds of awards made to injured workmen. Yeiser v. Dysart, 267 U.S. 540, 45 S.Ct. 399, 69 L.Ed. 775. To collect or receive from the proceeds of an award an attorney's fee in excess of that allowed by the Commission would subject a member of the Bar, guilty of such conduct, to disciplinary proceedings.