Workers’ comp lawyers in New Jersey, like in most other states, are paid on a contingency fee basis. This means that your lawyer will be paid out of the proceeds of your workers’ comp settlement or award. If you do not recover any benefits at all, you won’t owe any attorneys’ fees. (To learn how much you might receive, see our article on workers’ compensation benefits in New Jersey.)
By law, New Jersey workers’ comp lawyers cannot charge more than 20% of your settlement or award. In most states the entire fee comes out of the workers’ settlement or award. However, in New Jersey, the fee is split between you and your employer. You are responsible for 40% of the fee, which will be taken out of your award; your employer or its insurance company must pay the other 60% of the fee. This means you can expect to pay 8% (40% of the 20% contingency fee) of your total award or settlement to your attorney.
For example, suppose you receive a settlement of $10,000. A 20% contingency fee would be $2,000. Your employer’s portion of the fee is $1,200 (60% of $2,000), which it will pay to your lawyer directly. Your portion of the fee is $800 (40% of $2,000), which will come out of your award, leaving you with $9,200 ($10,000 - $800).
Although you can try to negotiate a lower fee with your lawyer, most lawyers charge the maximum rate. This is because lawyers have to spend a significant amount of time on workers’ comp cases, and the 20% cap is already low compared to other types of cases where lawyers can expect to earn up to 40% of the client’s award.
Legal fees must be approved by the New Jersey Division of Workers’ Compensation in each case. If you have a hearing in your case, attorneys’ fees will be covered in the Division’s written award. If you settle your case, attorneys’ fees will be spelled out in the settlement agreement which will be submitted to the Division for approval.
Costs incurred by your lawyer in pursuing your case—which may include deposition fees, copying costs, or expert witness fees (to have a doctor testify on your behalf, for example)—are not included in your lawyer’s fee. Workers’ comp lawyers will often agree to pay for these costs up front and then deduct them from your settlement or award. The Division must approve the legal costs as well.
Although not required by law, most New Jersey workers’ comp lawyers offer free consultations to injured workers. This initial meeting can help you determine whether you need a lawyer’s help and how much you might expect to receive in your case. (For information about how to choose a lawyer, see our article on what to look for in a workers’ comp lawyer).