Does the Workers' Compensation Commission Have Exclusive Jurisdiction Over Claims for Referral Fees?

more+
less-

In the closing days of its May term, the Illinois Supreme Court allowed a petition for leave to appeal from a decision of the Appellate Court for the Second District in Ferris, Thompson and Zweig, Ltd. v. Esposito.  Ferris, Thompson poses the question of whether the Workers’ Compensation Commission has exclusive jurisdiction over a plaintiff’s claim for breach of an agreement to pay referral fees in connection with two workers’ compensation cases.

The plaintiff law firm allegedly entered into a joint representation agreement with the defendant. The plaintiff agreed to assist with initial interviews and document preparation, provide translation services as the need arose and represent the client in any third party action. The defendant agreed to represent the clients before the Workers’ Compensation Commission. When the defendant failed to pay the plaintiff following settlement of the two subject claims, the plaintiff filed suit.

The defendant moved to dismiss, arguing that the Commission had exclusive jurisdiction over “[a]ny and all disputes regarding attorney’s fees,” and the circuit court accordingly lacked subject matter jurisdiction over the complaint. The plaintiff responded that the Commission’s authority was limited to disputes regarding fees for representing clients before the Commission, while its claim was for fees solely arising from referral of the clients. The circuit court denied the motion to dismiss as well as defendant’s motion for interlocutory appeal. The court found for the plaintiff following trial, and the defendant appealed.

The Appellate Court affirmed. The issue turned on Sections 16a(A) and 16a(J) of the Workers’ Compensation Act, according to the Court. Section 16a(A) provides that: “The Commission shall have power to determine the reasonableness and fix the amount of any fee of compensation charged by any person . . . for any service performed in connection with this Act . . .” Similarly, Section 16a(J) provides that “Any and all disputes regarding attorneys’ fees, whether such disputes relate to [which attorney] is entitled to the attorneys’ fees, or a division of attorneys’ fees where the claimant or claimants are or have been represented by more than one attorney . . . shall be heard and determined by the Commission.”

The Appellate Court found that, construing the two sections together, the Commission’s jurisdiction was limited to disputes over fees for attorneys’ work representing clients before the Commission, including services such as “filing the claim, representing the claimant before the Commission, and attempting to settle the claim.” The Commission’s authority did not extend to a dispute over breach of a referral agreement, according to the Court.

We expect Ferris, Thompson to be decided within six to eight months.

Image courtesy of Flickr by Markus Daams.

 

 

Topics:  Jurisdiction, Referral Fees, Workers Compensation Reform

Published In: Administrative Agency Updates, Civil Procedure Updates, General Business Updates, Labor & Employment Updates, Worker’s Compensation Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sedgwick LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »