On September 30, 2022, the Supreme Court of Alaska, in Rusch v. Southeast Alaska Regional Health Consortium, ruled that the Alaska Workers’ Compensation Act (WC Act) authorizes the Workers’ Compensation Appeals Commission (Commission) to award enhanced attorney fees to successful claimants for their attorneys’ work on a case appealed to the Commission.
In this case, the Commission denied a claimant’s request for enhanced fees—which would have allowed for a higher attorney fee than the baseline award calculated using a reasonable number of hours worked and hourly rate. The Commission reasoned that enhanced fees contravene the WC Act mandate that WC claims be resolved at a cost reasonable to the employer and that the Alaska Supreme Court had never before mandated such fees in appellate WC cases.
On appeal, the state supreme court disagreed with the Commission’s decision, noting that the legislature’s intent is that the WC Act be interpreted to ensure quick, efficient, fair, and predicable delivery of benefits at a reasonable cost to the employer. The court reasoned that employer costs are not the only consideration when interpreting the Act, but fairness to claimants—which includes access to competent attorney representation—should also be considered. The court also pointed out that enhanced attorney fees have been previously allowed, though not required, in workers compensation appeals. For example, the court explained, in the case of Wise Mechanical Contractors v. Bignell—decided before the creation of the Commission—the court affirmed a lower court’s award of enhanced attorney fees in a WC appeal case.
The court, concluding that the WC Act’s legislative intent—together with its own precedent—authorizes enhanced attorney fees, remanded the case back to the Commission to evaluate whether enhanced fees are appropriate in this particular case.
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