Memorandum

To: Members of the Senate Labor Committee

From: African American Chamber of Commerce of New Jersey

American Property Casualty Insurance Association
Associated Builders and Contractors – New Jersey Chapter
Chamber of Commerce of Southern New Jersey
Chemistry Council of New Jersey
Commerce and Industry Association of New Jersey
Fuel Merchants Association of New Jersey
Garden State Municipal Joint Insurance Fund
Government Finance Officers Association of New Jersey
Homecare and Hospice Association of New Jersey
Insurance Council of New Jersey
Municipal Excess Liability Joint Insurance Fund
National Association of Mutual Insurance Companies
National Federation of Independent Business
New Jersey Apartment Association
New Jersey Association of Counties
New Jersey Builders Association
New Jersey Business and Industry Association
New Jersey Cable Television Association
New Jersey Civil Justice Institute
New Jersey Dental Association
New Jersey Food Council
New Jersey Gasoline – C-Store – Automotive Association
New Jersey Independent Electrical Contractors Association
New Jersey Motor Truck Association
New Jersey Propane Gas Association
New Jersey Retail Merchants Association
New Jersey Self Insurers’ Association
New Jersey State Chamber of Commerce
New Jersey State Funeral Directors Association
New Jersey State League of Municipalities
Public Entity Joint Insurance Fund
Shipping Association of New York and New Jersey

Date: December 14, 2023

Re: Coalition Statement in Opposition to S4059

On behalf of a coalition of more than thirty organizations representing both private and public employers,
we are writing to respectfully urge you to vote NO on S4059 which would unnecessarily increase the cap
on workers’ compensation attorneys’ fees and materially change the way those fees are calculated,
resulting in increased costs for injured workers, businesses and government employers.
S4059 will significantly increase the attorney fee cap in workers’ compensation from 20% to 25% while
severely restricting the factors that a judge of compensation may consider when determining the
reasonableness of an attorney’s fee request. These cost increases will be borne by the injured workers
themselves as well as all employers regardless of their size, whether they are a private business or
public entity, or whether they are self-insured or purchase insurance in the traditional marketplace.

As you prepare to vote on this legislation today, the members of our coalition would like you to keep the
following key points in mind:

Despite claims to the contrary, including those set forth in the Bill Statement, this legislation specifically
prohibits judges of workers compensation from considering the hours worked or the hourly rate
charged by a petitioners’ attorney when determining whether they should be awarded the full 25% fee
that they are requesting. Absent these two crucial factors, it is unclear what factors a judge will be
permitted to consider in assessing the reasonableness of a fee request, or how judges will justify awards
of less than the statutory maximum.

In the Assembly Labor Committee, proponents of the bill argued that awards should not be subject to the
same rules as other types of fee-shifting statutes because petitioners’ attorneys work on a contingency
fee. This argument misses the point for several key reasons. First, there is a statutory requirement
within workers’ compensation that all fee requests must be approved by a judge, regardless of whether
they are awarded by judgement or agreed to in a settlement (NJRS. 34:15-64(d)). Second, in the vast
majority of workers’ compensation cases, 60% of the fees awarded are required to be paid by the
employer.

Petitioners’ attorneys also argued during the committee hearing that such a raise is necessary to attract
attorneys to practice in this area and address a shortage of qualified attorneys. However, public data from
the Department of Labor shows that the percentage of accidents resulting in court filings is consistent
with previous years. The absence of a statistically significant drop in the percentage of workers seeking
representation does not seem to support the need for a hike in fees to recruit additional attorneys.

The Bill Statement says S4059 is intended to address the ruling in Garzon v Morris County Golf Club, an
unpublished and therefore nonprecedential Appellate Division ruling which proponents claim will lead to
attorneys being undercompensated for their work. In fact, the Appellate Division’s ruling in Garzon was
not about whether the attorney deserved the full 20% award he sought, but whether the Judge of
Compensation applied the appropriate tests. Ironically, the Appellate Division in this case found the
fees to be excessive specifically because the judge failed to consider the hours worked or hourly rate
charged by the petitioners’ attorney, factors which this bill would specifically eliminate.

The members of our coalition strongly urge you to vote NO on this legislation which will increase costs
for both injured workers and employers.