know Ken does, too, in his office, and we feel many of the things we submit to the Social Security Administration, that we are kind of working for those lawyers, too, sometimes. Mr. SMITH. Yes. Senator Cook. And I say this in all fairness, because, as a matter of fact, we even get letters from the lawyers themselves saying we need your help in this. And somehow or other, we wind up doing a great deal of the work and we wind up doing a great deal of the persuasion, but that hasn't anything to do with the ultimate result. I think this is what kind of bothers some of us. I am not trying to put those out of proportion, because I don't really think they are in relation to the total number. How far have you had to appeal some of your cases? Mr. SMITH. All of the way to the court of appeals. Senator Cook. Have you had an opportunity to take any to the highest court in the Commonwealth? Mr. SMITH. Yes, quite a few, and I lost about four here recently on the 2-year thing, which is very unfair. Here is a man disabled, got it, nobody questions it. They say he is disabled and has got it but the 2-year statute locks him in. Had you not had an attorney in a lot of these cases, they might not have gotten the work record together and presented it properly. It is an adversary proceeding. It is more adversary really as much as you have in the common law court, except you are not right there that 2 days, maybe trying it or something of that sort. Senator Cook. May I say to the chairman, whereas in the case of a regular personal injury action, where you get a new trial if you even indicate insurance is deeply involved in the case, this is something that is known from the very beginning; as a matter of fact, this constitutes half of the case on the part of the board and/or part of the company that is the party defendant. Mr. SMITH. That is right. Senator Tunney, I know Senator Cook knows this, but I did stress in my statement that if we take a case-Lord knows, I took an old man's case, I would have been with him until hell froze over, I don't care how much I had loaned him-the court of appeals, if you take these cases, you don't get anything extra, the fee couldn't go any further than the 20 percent. So perhaps it balances itself off. But what I am trying to bring to the attention of the committee, we had, you might call it a windfall, because it was publicized too much in 1969 when you gentlemen were enacting the Federal black lung law, and everybody got aware of it-the miners, the unions told the people to go down and sign up for it to see if they had it. Then those people would say-no, you can't sign up if you are working, or you can't file here because you have a State claim to file. So those cases necessarily would come to our office, some attorney. They wouldn't tell him who to go to, but say you had better get an attorney. And that is why the influx of cases in 1969-73. I don't think you will have this in the future. I think you are talking in terms of this money; it is large in some instances, I am not here to defend anyone else's attorney fees, and I think it is a large amount. But I know that firm that has it, has about five attorneys in the thing, four or five. Senator Cook. Do you find some claimants in the position, once they recover in an extremely difficult battle to seek recovery, that it is almost totally impossible for them to get employed Mr. SMITH. Yes. Senator Cook. As a result of this kind of adversary proceeding? Mr. SMITH. I will give you an example. Two 45-year-old men from the same county, say Harlan, or Pikeville, or some place in eastern Kentucky, go to Detroit to get a job and they stand in front of the X-ray. One has a normal X-ray finding, the other has pneumoconiosis showing up on there. And maybe that physician may think it is some kind of fungi, he might even know pneumoconiosis I think they do know more. Do you think he is going to get a job? He is turned down. They don't tell him that directly, however. He's just not hired. Senator Cook. What I had more in mind, and I use the word in its true context, let's take a guy of 45, who is still working and is approved for this, is there such a thing as blackballing him as far as being able to get hired some place else, and so on, because of it? Mr. SMITH. Oh, yes; they do that. Senator Cook. All because of the adversary attitude of this entire proceeding? Mr. SMITH. That is right. And then the company doesn't think there is enough investment, because of age and lung condition. They don't know; this thing may be progressive. It is a progressive disease, and they don't want to take the risk of a future claim. Senator Cook. They don't want to take the risk because the claim will be filed against them in the future? Mr. SMITH. That is right. He might be accident prone, or his breathing may not be as good. But say he had very normal breathing. You can have normal breathing with state 2 silicosis or state 3, for that matter. When he gets up to the massive pulmonary fibrosis stage, that is really dangerous and sometimes they call that cancer. Senator Cook. And the real problem being that the future employer is materially concerned about the increase in the claims against him, the increase of his insurance premium as a result of these claims. Mr. SMITH. That is right. Senator Cook. And therefore they fall within the category of being a bad risk. Mr. SMITH. He is unemployable. He is just as disabled, occupationalwise, as a man who has a broken back and can't perform the work. He can't obtain it. I don't say the board down there our board doesn't follow that altogether. You get a young man 35 that was stage 2 or 3, sometimes they have been given maybe a 50-percent award, permanent-partial. But he is in tough shape. He has that on his record, and usually if you go to apply for a job, if you tell them the truth, "Yes, I have pneumoconiosis"-then he won't be hired. Senator Cook. In other words, we have to find a solution. Mr. SMITH. I am talking about the practical thing over our country. Senator Cook. Let's wind this up by saying we have got to find a solution whereby the individual is entitled to representation, but he really shouldn't be subjected sometimes to the extreme penalties against that claims that sometimes occur. Mr. SMITH. Oh, yes; I think in Kentucky that can be remedied and I think everyone is friendly there, and I believe this may institute something good that will come out of it, where you won't have as many or as much attorney fees. Get in there and settle those cases if it is justifiable. Senator Cook. Find the means by which it can be done. Mr. SMITH. Yes, sir. Senator Cook. Mr. Smith, I can't thank you enough. Mr. Chairman, I thank you. Senator TUNNEY. Thank you, Senator. Thank you very much, Mr. Smith. Mr. SMITH. I appreciate your inviting me here before you. I am sorry I took so much of your time. Senator TUNNEY. I think you laid a good foundation for the hearings and we appreciate it [The material referred to follows:] [Testimony resumes at p. 288.] SUPPLEMENTAL STATEMENT OF CAWOOD SMITH, ATTORNEY AT LAW, HARLAN, KY. Mr. Chairman, and members of this subcommittee: This is a supplement to the Statement submitted by Cawood Smith, Attorney at Law, Harlan, Kentucky, to his testimony to be given before this Subcommittee on October 1, 1973. Under the heading, ATTORNEY'S FEES, bottom of page 8, immediately after the regulation of the Kentucky Workmen's Compensation Board (WCB-1-6, Section 24), the following should be added as a new paragraph: The Kentucky Workmen's Compensation Board is authorized by Statute KRS 342.320 (1) to allow an attorney's fee not to exceed “an amount equal to 20% of the amount recovered." There is no allowance or additional attorneys' fees for appellate procedure, nor is there any allowance for the collection of medical benefits or funeral expenses. The attorneys' fees are paid from the claimant's award by the defendant, but the defendant pays the claimant's attorney's fee in a lump sum and is given credit against the claimant's award, dating back from the last week for which benefits are due thereunder. For a comparison of Kentucky with other states relative to attorneys' fees fixed by statute and/or supervised by a commission, board, or the court, I have lifted from Larson's Workmen's Compensation Law, Volume 3, Appendix C, Table 21, a Table which lists each state in the United States and sets out how attorneys' fees are authorized and/or approved in each state and those who set a fixed maximum fee as Kentucky. A true copy of this Table is filed herewith and marked Exhibit "B" for identification. The Committee will note there is a great variation among the states. 'Not over 30% on first $1,000, 20% on $1,000-$2,000, 10% on any excess over $2,000. If Court finds no reasonable basis for appeal, Appeals Board may award fees as supplementary award. 'Or, $2,250, whichever is less. • Added to award. 8 20% on first $5,000 and 10% on any excess. T May be awarded by Commission if services were necessary. Right to appeal to Medical Review Panel on questions of medical dispute. • Commission in successfully contested case may make additional allowance to be paid by employer. Determined by schedule adopted by Bureau; trial judge fixes an appeal, upon consideration of amount allowed by Bureau. 10 Court fixes on appeals; 20% maximum on awards up to $3,000. 10% for awards over $3,000-maximum $750. "Not to exceed $500. If admitted liability, not to exceed $100 or 10%. "Maximum $100, Supreme Court services $300. Senator TUNNEY. Our next witness is Mr. Bernard Popick, Director of the Bureau of Disability Insurance, Social Security Administration, accompanied by: Joan W. Hutchinson, Deputy Assistant Secretary for Welfare Legislation; Hugh A. Meade, Jr., Chief, Miners Benefits Branch, Bureau of Disability Insurance; Gerald G. Altman, Jr., Chief, Cash Benefits Branch, Social Security Division, Office of the General Counsel, Department of Health, Education, and Welfare; Nancy Snyder, Director, Division of Coal Mine Worker Compensation, Department of Labor; and James Johnston, Associate Solicitor, Division of Employee Benefits, Department of Labor. Sliding scale maximum |