California Labor Code Section 3856 Attorney Fees
In Quinn v. State of California (1975), 15 Cal. 3d 162 at pages 170-171, our Supreme Court rejected an employer's argument that it was not required under section 3856 to pay fees to the employee's attorney who obtained a judgment.
The court stated:
"In a case in which the worker might well stand entitled to contribution toward his attorney's fee absent any statutory provision, this court cannot interpret a statute which on its face calls for the weighing of benefits and burdens, as barring apportionment of fees. Such an interpretation would violate the legislative intent that we liberally construe workers' compensation statutes to the worker's benefit.
Indeed, to construe the statute as forbidding apportionment of fees would raise questions of conflict with the policy announced in section 3751, which makes it a misdemeanor for an employer to require from a worker any contribution 'either directly or indirectly' to cover the cost of compensation benefits.
One of the costs of compensation benefits is the cost of recovering judgments against third parties whose negligence necessitated the payment of those compensation benefits.
To construe section 3856 as a legislative demand that the courts assist in precisely such an enforced contribution is therefore to negate the legislative intent underlying section 3751."
Although Quinn concerned section 3856, the statute governing judgments, the same logic applies to section 3860, the statute governing settlements.
Both are based on the equitable principles embodied in the common fund doctrine. In fact, our Supreme Court stated that its opinion in Summers is consistent with the reasoning in Quinn. (Summers v. Newman, 20 Cal. 4th at p. 1024.)