The Workers Compensation has broad jurisdiction to award or apportion attorneys’ fees in connection with counsel’s work before the Commission. But what if one of the attorneys didn’t appear before the Commission, and the contract is largely for referral fees? Unanimously affirming the Appellate Court in Ferris, Thompson & Zweig, Ltd. v. Esposito, the Illinois Supreme Court held that the Circuit Court has subject matter jurisdiction to consider such disputes. Our detailed summary of the underlying facts and lower court decisions in Ferris is here. Our report on the oral argument is here.
Plaintiff and defendant entered into an attorneys’ fees agreement with respect to representation of two women in connection with their workers’ compensation claim. It wasn’t a pure referral fee agreement; plaintiff agreed to assist with initial interviews and document preparation, provide translation services as needed, keep a duplicate file and facilitate client communication. But the defendant was to represent the clients before the Commission. After the cases settled, the defendants declined to pay plaintiff its share of the fees, and the plaintiff sued in Circuit Court.
Defendant moved to dismiss, arguing that under Section 16a(J) of the Workers’ Compensation Act, (820 ILCS 305/16a(J)), the Commission had exclusive jurisdiction over all attorneys’ disputes in connection with the Act. The Circuit Court concluded that the agreement at issue was a referral agreement, and fell outside the scope of the Act. Following trial, the court awarded judgment to the plaintiff. The Appellate Court affirmed.
In an opinion by Justice Kilbride, the Supreme Court affirmed the Circuit and Appellate Courts. Relying both on the language of the Act and the legislature’s expressed intent that matters before the Commission be handled promptly so as to facilitate quick compensation to claimants, the Court concluded that the Commission’s jurisdiction over attorneys’ fees disputes covered only fees incurred for representation before the Commission.
The Court held that the plaintiff’s role in the clients’ representation was minimal, and the agreements clearly provided that the defendant was solely responsible for representing the clients before the Commission. Accordingly, the Court found, the claim was for breach of referral agreements. The defendant argued that the matter was nevertheless within the Commission’s jurisdiction, pointing to the ban in Section 16b of the Act (820 ILCS 305/16b(a)) on providing “compensation or any gift in exchange for referral of a client involving a matter to be heard before the Commission” except as provided for by Rule 1.5 of the Code of Professional Responsibility, but the Court held that Section 16b doesn’t purport to give the Commission jurisdiction over such claims.
Since the sole challenge to the judgment for plaintiff was based upon the Circuit Court’s jurisdiction, the Supreme Court affirmed the judgment for plaintiff.
Image courtesy of Flickr by darkday (no changes).
