What Happens if a Longshore Attorney Accepts Fees Without Receiving Prior Approval?

An award of attorney fees for Longshore and Harbor Workers’ Compensation Act (“Longshore Act”) and Defense Base Act claims must adhere to specific statutory requirements.  Section 28 of the Longshore Act controls.  In many cases, an injured worker’s employer or carrier pay attorney fees, provided that claimant is entitled to shift fees.  In a handful of cases, an attorney may ask the claimant to pay fees.  But, in all cases the attorney fees must be pre-approved by an appropriate agency or court before the attorney can actually accept the fees.  The statutory basis for the pre-approval requirement is found at Section 28(e), which states:

A person who receives a fee, gratuity, or other consideration, on account of services rendered as a representative of a claimant, unless the consideration is approved by the deputy commissioner, administrative law judge, Board, or court . . . shall, upon conviction thereof, for each offense be punished by a fine of not more than $1,000 or be imprisoned for not more than one year, or both.

See 33 U.S.C. § 928(e) (1984).

In other words, the Longshore Act makes it a crime to accept attorney fees without prior approval from the Division of Longshore and Harbor Workers’ Compensation (“DLHWC”), the judge, the Benefits Review Board, or the reviewing federal court.  Id.; see also Hensley v. Washington Metro. Area Transit Auth., 690 F.2d 1054 (D.C. Cir. 1982) (“Attorneys who receive unapproved fees are subject to criminal penalties.”).

Criminal penalties are not the only sanction for accepting unapproved fees.  The Secretary of Labor may also disqualify the attorney from representing Longshore or Defense Base Act claimants.  An attorney whose name is published on the Secretary’s list of disqualified individuals “shall not have their representation fee approved . . . .”  See 20 C.F.R. § 702.131 (2014).

Further, accepting attorney fees without the appropriate approval can land the attorney in hot water with their bar association. Attorneys are subject to Rules of Professional Conduct.  All state bar associations consider it professional misconduct for an attorney to commit a criminal act that adversely reflects on the attorney’s honesty, trustworthiness or fitness as a lawyer.  Consequently, if the attorney accepts a fee without first receiving the appropriate approval, they may face bar sanctions in addition to criminal charges and Longshore representation disqualification.

That is exactly what happened in Attorney Grievance Comm’n of Maryland v. Eisenstein, 635 A.2d 1327 (Md. 1994).  There, the Court of Appeals of Maryland thoroughly dissected Section 28(e) and determined that accepting fees without prior approval constituted “criminal conduct” for purposes of the Rules of Professional Conduct.  The court suspended the offending attorney from the practice of law for two years.

In conclusion, stiff penalties await an attorney who accepts fees without first seeking the appropriate approval from the DLHWC, administrative law judge, Benefits Review Board, or federal court.  The attorney may face imprisonment, disqualification, and bar sanctions.