Request By:
Ms. Cattie Lou Miller
Executive Director
Crime Victims Compensation Board
113 E. Third Street
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Martin Glazer, Assistant Attorney General
You seek an opinion on the following questions:
"1. Is there legal authority for use of government funds to pay fees to attorneys who represent claimants for crime victim funds?
"2. If so, what is the proper source of funds for such fee payments?
"3. Should the Board subtract claimants' attorney fees from awards the Board makes to crime victims for out-of-pocket medical expense and other necessary expenses and for lost wages or support? Or should the Board pay fees to claimants' attorneys without reducing awards paid to successful claimants? "
The Kentucky General Assembly has authorized in KRS Chapter 346 payments for injuries suffered by victims of crime under certain restricted circumstances.
Under KRS 346.130(3), the award excludes the first $100 of losses incurred and cannot exceed "out-of-pocket expenses, including indebtedness reasonably incurred for medical or other services necessary as a result of the injury upon which the claim is based, together with loss of earnings or support resulting from such injury.
Subsection (4) of that statute limits loss of earnings to no more than $150 per week and subsection (5) limits the total award to a maximum of $15,000.
We can find no specific authorization of attorney's fees in those sections dealing with an award. The only place wherein an attorney fee is mentioned is in KRS 346.040 setting out the powers of the Crime Victims Compensation Board.
Subsection (2) thereof authorizes the Board "[t]o adopt, promulgate, amend and rescind suitable rules and regulations to carry out the provisions and purposes of this chapter, including rules for the approval of attorney's fees for representation before the board or upon judicial review as provided for in KRS 346.110."
Kentucky Constitutional $230 provides in part:
"No money shall be drawn from the state treasury, except in pursuance of appropriations made by law; . . ."
In accordance with that section, KRS 41.110 provides in part:
"No public money shall be withdrawn from the treasury for any purpose other than that for which its withdrawal is proposed, nor unless it has been appropriated by the general assembly or is a part of a revolving fund, and has been allotted as provided in KRS 45.010 to 45.990, and then only on the warrant of the executive department for finance and administration. . . ."
Also, KRS 44.010 provides in part:
"All claims upon the state treasury that are authorized by law shall be paid when due by the state treasurer to the person entitled to the amount claimed. . . ."
Since we find no specific authorization for the payment of an attorney fee, only the authority for the Board to approve such fees, we must conclude that any payment of attorneys' fees must come out of the award of the Board, not in addition to such an award and then only under contract law, whereby the attorney and the client have agreed on such a fee.
In that regard, any such contractual agreement shall be subject to the Board's right to approve (or disapprove) such fee and to provide by regulation for determining such fees.
Thus, in answer to questions 1 and 2, the attorney fee, if any, must come from the award to the claimant, not in addition to such award. Otherwise, the Board will be approving payment for sums not authorized by statute. 1
Question 3, in part, is a policy question rather than a legal one. The Board has authority to limit attorney's fees in many ways (based upon the broad language found in KRS 346.030(2)). It can limit attorney fees to a certain percentage of a gross or a net sum, or it can determine under what circumstances attorneys' fees shall be paid. Of course, these guidelines should be clearly set by regulation. Otherwise, the Board could be accused of arbitrarily exercising its statutory discretion, if its decisions on attorney fees on an ad hoc basis are inconsistently applied.
Footnotes
Footnotes
1 It might be argued that an attorney fee is an "other service(s)" (KRS 346.130(3)), except that such term is limited by "necessary as a result of the injury. . .". The attorney fee does not result from the injury but from a fee for collecting a claim for reimbursement of expenses directly incurred by such injury. In other words, a hospital bill is an expense directly attributed to a compensable injury. An attorney fee is a step farther removed from injury expenses.