State News : Texas

Attorney Leslie Casaubon has been accused of defrauding injured workers (and the Division of Workers’ Compensation) in regard to attorney fee affidavits she submitted for approval to the Division. She is accused of submitting time under Texas State Bar numbers of other attorneys for work those attorneys did not perform on behalf of her firm. Ms. Casaubon was indicted on three counts. Count I, Securing Execution of a Document by Deception, is a 1st degree felony. The other two counts are 2nd degree felonies but arise out of the same deceptive billing practices. Send an email to jstone@slsaustin.com if you would like to have a copy  of the indictment to learn the particulars of her scheme that has been going on for quite some time. It is a puzzle as to why the Division, who by statute is charged with the duty to regulate attorney fees, did not pick up on the scheme earlier.  

Labor Code 408.221, and Division Rules 152.1-152.3 provide the details of what a claimant’s attorney must certify to the Division when applying for fees. To be paid the 25% of a claimant’s income benefits, the attorney can only submit for payment fees for time the attorney actually worked. It goes without saying that an attorney cannot work more hours than there are in a day, or in a year. It seems as though the Division could easily flag billings where the hours claimed by an attorney under his or her State Bar number exceed a threshold of credibility. For example (based on a recent open records request for 2017 approved fees reported by WorkCompCentral), if an attorney submits fees which are approved for $1,700,000 in a year, that would amount to billing $200/hr. for 8,500 hours worked in that year, which would be around 163 hours per week, which would be close to 24 hours of work every day. Hard working attorneys can sometimes work up to 2,500 hours a year if they work 48 hours every week – and can actually justify billing a client for all of those hours – but anything more than that surely exceeds a threshold of credibility.

The irony is that the “new law” reform of 1989 was driven in part by the perception (or reality) that claimant attorneys were prematurely settling old law claims for medical and indemnity benefits in order to get a quick payout of their attorney fees. Obviously, if a claimant attorney could settle out a case (including medical benefits) for $100,000, 25% of that would be $25,000. There was no tedious administrative  process of having the fees approved the agency by affidavit as there is now under new law. But, the settlements often left the client with no access to medical care even though there may have been latent effects from their work injury.

The “new law” was enacted in 1989, and was promptly challenged on the basis that it violated the Texas Constitution in many respects. In 1995, the Texas Supreme Court eventually determined that the “new law” provisions did not violate the Texas Constitution and issued a lengthy opinion stating its reasoning. Of interest here is that claimant attorneys challenged the “new law” provision that capped the hourly rate for fees at $150 and limited the amount they could be paid to 25% of a claimant’s income benefits. Interestingly, under the “old law” a claimant attorney could not receive fees in excess of 25% of his client’s recovery, but there was also no cap on hourly rates. The “old law” settlements were often insufficient for the claimant to cover his future medical costs. The decision was a blow to claimant attorneys. See Texas Workers’ Compensation Commission v. Garcia, 893 S.W.2d 504 (Tex. 1995).

To quote Winston Churchill,  “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

-  Copyright 2018,Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP