Interest on Ohio Workers' Compensation Attorney Fees: How It Works

Why Ohio Grants Interest on Attorney Fees

Ohio's Workers' Compensation Act requires that attorneys who recover fees on behalf of injured workers receive interest on those fees. The statute protects workers from paying a larger burden than originally agreed and ensures that attorneys are compensated fairly for the time and effort invested in pursuing a claim. Unlike punitive or liquidated damages, this interest is statutory and calculated on the actual fee amount, not on the underlying claim value.

Statutory Basis and Calculations

The key provision is § 4325.18 of the Ohio Revised Code, which sets the interest rate at 5 % per annum. Interest is calculated from the date the fee is awarded until the fee is paid in full. For example, an attorney fee of $10,000 awarded on January 1, 2024, would accrue approximately $416.67 in interest per year, or about $34.72 per month, until the fee is settled.

Accrual Method

Interest is calculated on a simple interest basis, not compounding. The formula is:

• Interest = Principal × Rate × Time (in years)

Time is measured from the fee award date to the payment date. If the fee is paid within 30 days, the interest is minimal; if the payment is delayed to 90 days, the interest triples.

When Is Interest Paid?

Interest is due whenever the fee remains unpaid after the award. This can happen in two main scenarios:

• Intra‑company disputes where the employer disputes the fee amount.
• Delayed settlement of the entire workers' compensation claim, leaving the attorney to wait for final payment.

In both cases, the attorney can enforce payment through a court order, and the court will include the accrued interest in the judgment.

Practical Tips for Claimants

1. Verify the fee award date and the interest calculation in the settlement paperwork.

1. Request a detailed statement of interest from the attorney before signing.
2. If payment is delayed, negotiate a payment schedule that includes interest to avoid surprises.
3. Keep records of all communications with the employer and the attorney regarding fee payment.

   Practical Tips for Attorneys

   1. Include an interest clause in the fee agreement to remind the employer of statutory obligations.

4. File a demand for payment with interest if the employer fails to pay within 30 days of the award.
5. Use the court's interest calculation as a bargaining chip to expedite payment.
6. Document all attempts to collect the fee to support an interest claim in case of litigation.

   Common Misconceptions

   Many believe interest is only applied when a claim is denied or dismissed. In Ohio, interest applies to any unpaid attorney fee regardless of claim outcome, provided the fee has been awarded. Also, interest does not apply to the workers' compensation benefit itself; it is strictly for the attorney's fee.

   Conclusion

   Ohio's statutory interest on workers' compensation attorney fees safeguards both claimants and attorneys. By understanding the rate, calculation method, and practical steps for enforcement, parties can avoid unnecessary delays and ensure fair compensation.