Can a lawyer manufacture a dispute in a workers' compensation case just to charge the maximum allowed contingent fee?

Plain-English summary

Opinion E-56-1 addressed the contingent fee allowed in workmen's compensation cases. The committee noted that in 1949 Section 102.26(2) of the Wisconsin Statutes was enacted to permit lawyers to charge a maximum contingent fee of 20% of the amount collected in contested workmen's compensation cases. The question was whether a lawyer could apply that maximum where there was no genuine contest.

The committee concluded that it is clearly unethical for a lawyer to concoct an aura of contest in a case where there is not a true contest, or before it is known whether any conflict exists, for the sole purpose of applying the maximum percentage. While the fee ceiling itself is a matter of statutory law within the jurisdiction of the Industrial Commission, the committee stated that in these cases, as in others, the ethical lawyer should always be governed by the principles of Canon 12 of the Canons of Professional Ethics. The committee noted that DR 2-106(B) of the Code of Professional Responsibility sets out criteria for a reasonable fee similar to the former Canon 12.

Currency note

This opinion was issued in 1956, before Wisconsin's July 1, 2007 adoption of the revised Rules of Professional Conduct for Attorneys (the state's Ethics 2000 update), and it applies former Canon 12 of the Canons of Professional Ethics on reasonable fees. The current counterpart is SCR 20:1.5 / Model Rule 1.5 (fees; reasonableness and contingent-fee requirements). The opinion also describes a 1949 statutory fee cap (Wis. Stat. sec. 102.26(2)); the workmen's compensation fee statute has been amended since, so the specific percentage and procedure should not be relied on as current. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can a lawyer charge the maximum contingent fee in a workers' compensation case that is not actually contested?

A: Under this opinion, no. The committee held it unethical to manufacture an aura of contest where none truly exists in order to apply the maximum percentage.

Q: What rule governed the fee's reasonableness?

A: The committee invoked the principles of former Canon 12 of the Canons of Professional Ethics, noting that DR 2-106(B) set out similar reasonable-fee criteria.

Q: Was the fee cap itself an ethics rule?

A: No. The committee described the 20% maximum as a matter of statutory law within the jurisdiction of the Industrial Commission, while treating the manufactured-contest conduct as the ethical violation.

Citations and references

Rules of Professional Conduct:

• Model Rule 1.5 / SCR 20:1.5 (fees; reasonableness and contingent fees); former Canon 12, DR 2-106(B)

Statutes:

• Wis. Stat. sec. 102.26(2) (1949) (maximum 20% contingent fee in contested workmen's compensation cases)

See also

• WI Ethics Op. E-09-03: Communicating Fees and Expenses to Clients
• WI Ethics Op. E-75-1: Credit Cards and Interest on Delinquent Accounts

Source

• Landing page: https://www.wisbar.org/formembers/ethics/pages/formal-opinions.aspx
• Original PDF: https://www.wisbar.org/formembers/ethics/Ethics%20Opinions/E-56-1.pdf