“If you throw a frog in a pot of boiling water, it will hop right out. But if you put that frog in a pot of tepid water and slowly warm it, the frog doesn’t figure out what’s going on until it’s too late. Boiled frog. It’s just a matter of working by slow degrees.”  By Stephenie Meyer, The Host.

Designed to protect an applicant from the costs associated with retaining counsel when a deposition is set by defendant in a workers’ compensation case, Labor Code Section 5710 (L.C. 5710) has been used – and some might say mis-used – for years by applicant’s attorneys. The reasonable standard and customary rate of $325.00 to $375.00 – commensurate with experience – has skyrocketed to the point where demands uniformly are at $550.00 per hour. Also, the COVID-19 pandemic has left its mark on this statute as well:  to absorb the hit of no more travel time for the attorney based on Zoom depositions, demands for time and fees for Zoom set-up, staff confirmation, review of file, and other charges have started popping up in applicant’s attorneys’ demands. It seems the applicant’s Bar is putting defendant’s frog in the water and turning up the heat.

Well, sometimes the frog jumps out.

In the case of Purvis Cowens vs ABC Unified School District, ADJ13906645 (decision on reconsideration), involving an October 23, 2019, specific back claim, Applicant’s deposition was taken on March 9, 2021 (right in the middle of the COVID pandemic for those of you keeping track). Applicant’s attorney issued a demand for L.C. 5710 fees two days after the deposition. This demand included two hours of attorney time at a rate of $450.00 per hour, along with $50.00 for a half-hour of attorney’s staff time. There was also a demand made for fees in connection with Applicant’s review and signature of the deposition transcript and Applicant’s attorney’s response to demand for production of documents. Defendant objected, with partial payment issuing.

The trial judge found that with respect to the response to the demand for production, most of the work completed was done by office staff, rather than Applicant’s counsel, himself. Furthermore, even if Applicant’s attorney had completed these tasks himself, they would not be deemed a reasonable expense pursuant to L.C. 5710.

Specifically, with respect to the demand for time to review the transcript with Applicant’s attorney, the applicant, himself, testified at trial that he was e-mailed the transcript, reviewed it himself, and e-mailed it back. The trial judge noted that Applicant’s attorney’s involvement in this process was “negligible at best.”

The trial judge indicated that the total amount due pursuant to L.C. 5710 was $900.00, and given the fact that Defendant had already issued $950.00, no further amount was due.

Applicant’s attorney filed a Petition for Reconsideration. The Board found that the trial judge acted within his authority in establishing the appropriate rate and total amount owed pursuant to L.C. 5710. The Board also commented that the judge’s findings were based on the evidence presented (notably the applicant’s testimony) and that no further money was owed for the services alleged as reimbursable pursuant to L.C. 5710. The trial judge’s Findings and Award were affirmed across the board.

The Moral of this Tale: This case makes clear that defendant can – and should – stand its ground when it comes to excessive L.C. 5710 demands. Furthermore, defendant should also think twice about paying at the demanded rate. Typically, a cost-benefit analysis is done by the claims examiner and defense counsel about paying less versus the costs associated with filing an objection to a formal petition and litigating the issue at trial. So, we defendant pays. But maybe defendant should start turning up the heat as well.

By Mary Britt, Esq., Associate Attorney, Van Nuys Office, July 2023

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