State News : New Jersey

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NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.  

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New Jersey



On June 21, 2018 the New Jersey Assembly passed Senate 2145, which is a bill long lobbied for by counsel for injured workers.  The measure passed by a 2-1 margin and now goes to the Governor for signature, the Senate already having passed the bill.  The legislation makes a significant change in removing the incentive for employers to make voluntary offers of permanent partial disability without having to pay a counsel fee on the amount offered.  The original legislation was passed in the 1920s and has stood the test of time – until now.

The law for the past 90 years was simply this: any offer of permanent partial disability made within 26 weeks of the last active medical treatment or return to work date to injured workers was not feeable.  Neither the petitioner nor the employer paid a fee on the amount of a valid voluntary offer.  Counsel fees to attorneys for petitioners were based only on amounts paid to injured workers in excess of the amount of the voluntary offer.  Injured workers benefited by receiving payments while their case was pending in the Division.  Those funds might help tide the worker over while the ultimate settlement was negotiated. The incentive to employers in making these payments was clearly avoidance of paying a counsel fee on the amount offered.

Under the new law to be signed by the Governor, a petitioner’s attorney is entitled to a fee on all amounts received by the injured worker if the attorney can prove an established attorney – client relationship pursuant to a written agreement prior to the date of the voluntary offer.  In other words, the claimant’s attorney gets a fee on all payments of permanency made after the date of the written engagement letter.

Counsel for petitioners have long argued that the voluntary offer rule, also known as the bona fide offer rule, was inherently unfair because attorneys may have put in a great deal of time and effort on a case only to have their fee reduced by a substantial voluntary offer made within 26 weeks of maximal medical improvement or return to work, whichever is later.

It will be interesting to see how employers react to this legislative change.  Some practitioners predict the end of voluntary offers except in truly rare cases.  The incentive to employers for the past 90 years was to save on counsel fees by making early offers of permanency.  Petitioners’ counsel as well as judges often request that employers make voluntary offers, recognizing that employers benefit by not paying a counsel fee on such early offers and that employees benefit by getting funds when they really need them. That incentive is now for the most part gone.  Arguably, the new legislation hurts petitioners as much as employers. The winners are petitioners’ attorneys, who have fought for many years for this change in the law.

One practical problem for employers is this:  an employer who is considering making a voluntary offer after the Governor signs this legislation has no way of knowing whether the injured worker has a signed agreement with counsel.  There is no obligation to reveal this information on the part of the injured worker.  Whether one has retained an attorney or not is confidential.  Of course, if the employer or carrier has received a letter of representation prior to the offer being made, the employer will know that any voluntary offer would be feeable.  In that situation, voluntary offers will almost never be made. But injured workers may or may not have counsel in the background.  So there may be situations where an offer is made, and the employer will only find out at the end of the case whether the offer is feeable.   An employer may think it is making a non-feeable voluntary offer only to be proven wrong at settlement when a valid attorney agreement is produced.



John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at