On December 21, 2001, the attorney for the employee filed a Statement of Attorney=s Fees and Petition for Excess Fees.  The attorney requested approval of a fee of $45,752.00, $3,530.60 as a contingent fee from the benefits awarded to the employee and the balance as a Roraff fee.  The attorney also requested an award of fees to the employee under Minn. Stat. ' 176.081, subd. 7, and sought payment of taxable costs and disbursements.  The employer and insurer filed an objection to the requested fees on December 26, 2001.  This matter proceeded to arbitration.  The parties agreed that testimony was not necessary and submitted the case for a decision based upon stipulated facts and the submission of briefs.

The arbitrator issued his Findings and Order on Attorney=s Fees, which was filed with the Department of Labor and Industry on March 22, 2002.  The arbitrator found that the parties stipulated the employee=s attorney had expended 240.8 hours in representing the employee between August 30, 1999, and October 3, 2001, and that the number of hours for the performed services was reasonable.  The parties further stipulated that the hourly rate of the employee=s attorney was $190.00 per hour and the hourly rate was reasonable.

The arbitrator determined that, of the itemized time, 202.1 hours were expended in connection with issues other than the appeal to the Workers= Compensation Court of Appeals.  The arbitrator also reviewed the representation of the employee by the attorney in light of the Irwin factors.^[4]  The arbitrator also found that $3,530.60 had been withheld for attorney fees from the benefits paid to the employee.  There has been no further indemnity benefits paid to the employee since the discontinuance filed on July 24, 2000, and no additional attorney fees have been withheld.  The arbitrator determined that the employee had also received $35,528.77 in payment of medical expenses.  Attorney fees pursuant to Minn. Stat. ' 176.081, subd. 1, based upon the medical expenses, would be an additional $11,772.03.  The arbitrator concluded that the contingent attorney fees and the fees on medical expenses would not be adequate to compensate the employee=s attorney for his efforts.

The arbitrator ordered the employer and insurer to pay to the employee=s attorney the sum of $38,399.00.  Of that amount, $4,666.28 would be contingent fees from benefits paid to the employee.^[5]  The balance, or $33,732.72 would be paid by the employer and insurer as Roraff fees.  In addition, the employer and insurer were ordered to pay to the employee the amount of $11,444.70 as an award pursuant to Minn. Stat. ' 176.081, subd. 7.  The employee=s attorney was also awarded his taxable costs and disbursements in the amount of $2,498.93.  The employer and insurer appeal.

DECISION

The employer and insurer appeal from the findings of the arbitrator that the claim for Roraff fees was not premature, that there was no stream of benefits from which to award contingent fees, and that the reasonable fee for the representation of the employee was $38,399.00.  The employer and insurer appeal from the award by the arbitrator of $33,732.78 in Roraff fees and $11,444.70 to the employee pursuant to Minn. Stat. ' 176.081, subd. 7.  We affirm.

An award of attorney fees in this case is governed by the provisions of Minn. Stat. ' 176.081, subd. 1, which provides in pertinent part:

Subdivision 1.  Limitation of fees. . . .

(1) The contingent attorney fee for recovery of monetary benefits according to the formula in this section is presumed to be adequate to cover recovery of medical and rehabilitation benefit or services concurrently in dispute.  Attorney fees for recovery of medical or rehabilitation benefits or services shall be assessed against the employer or insurer only if the attorney establishes that the contingent fee is inadequate to reasonably compensate the attorney for representing the employee in the medical or rehabilitation dispute. . . . .

In considering whether the contingent fee in this case was inadequate, the arbitrator appropriately considered what a reasonable fee for the services provided would be.  He took note of the hourly rate and hours expended by the employee=s attorney, and also considered the factors set out by the supreme court in Irwin.  See also Borgan v. Bob Hegland, Inc., slip op. (W.C.C.A. Jun. 12, 2002).  After doing so, the arbitrator came to the conclusion that a reasonable attorney fee would be $38,399.00.  Although the employer and insurer raised the issue of the reasonableness of that amount in the notice of appeal, there is no argument in their brief that the amount of the fee was inappropriate.

After determining that the contingent fee from the benefits paid to the employee would be $4,666.28, the arbitrator concluded that the contingent fee was inadequate and a Roraff fee should be paid to the employee=s attorney.  The employer and insurer argue that this step was premature and that there was a continuing stream of benefits from which contingent fees could be paid.  Until that stream has ended, the employer and insurer allege, the adequacy of the contingent fee cannot be determined and an award of Roraff fees should not be made.

The arbitrator found that no ongoing benefits were being paid to the employee and no benefits had been paid since the discontinuance was filed on July 14, 2000.  The stream of benefits to which the employer and insurer refer is a pending claim petition filed by the employee.  The employee has alleged entitlement to 40% permanent partial disability, an underpayment of disability benefits for the period August 29, 1999, to September 15, 1999, payment of out-of-pocket medical expenses, and penalties for the refusal to pay benefits by the employer and insurer.  The employer and insurer filed an answer generally denying any obligation to pay the employee=s claims.  An amended answer was subsequently filed affirmatively alleging that the employee has sustained a 0% permanent partial disability.  No hearing has been scheduled on the pending claim.

It is incorrect to characterize this pending claim as part of an ongoing stream of benefits generated by services provided before October 3, 2001.  As the arbitrator pointed out in his memorandum,

The employee=s attorney will only obtain future attorney=s fees if he is successful in litigating a future claim.  There is no reason to suggest that the employer/insurer=s defense of the permanent partial disability claim will be any less vigorous than their defense of the original indemnity and medical expense benefits claim, and any fee awarded in that subsequent proceeding will presumably be well earned based upon those contemporaneous efforts by counsel.

There are no ongoing benefits attributable to the services provided by the employee=s attorney which are at issue in this case.  Accordingly, it was not premature for the arbitrator to consider the issue of Roraff fees.  We affirm the award of attorney fees.^[6]