*1 281 Kroll HYSTER COMPANY KROLL v (Calendar 15). 12, Argued September No. Docket No. 55239. 7, 1976. Decided December brought Wayne an action Circuit Leslie Kroll Kroll and Louise Farmer, J., Hyster Corporation Court, and Charles S. injuries damages Joseph sustained while A. Ratonetti for operating truck a forklift manufactured Leslie Kroll was employment Superior Hyster during with of his course Liberty Sliding Company. Mutual Insurance Com- Door Frame pany, carrier for Kroll’s em- the workmen’s $175,000 judgment ployer, Leslie intervened. Verdict Kroll, and of the Kroll for Louise Kroll, $32,337.39 to to was ordered Leslie provision with the that the reimburse it for fees, attorney lawyer pay Kroll’s insurer must 33-1/3% attorneys. nothing for the insurer’s The was allowed as a fee Adams, J., Fitzgerald, Appeals, M. P. and T. Burns and Court of JJ., hearing for a to determine the reversed and remanded (Docket attorney No. services of the insurer’s value of the 13887). appealed. Liberty Mutual Insurance Com- Leslie Kroll Appeals cross-appealed, contending pany the Court of attorney concluding fees that the trial court’s award erred in Held: was reasonable. affirmed, Appeals and the case of the Court of is decision hearing for a to determine is remanded to circuit court attorney. The decision of the services of the insurer’s value of guidance Appeals to the circuit court the Court of did not offer calculating it should use in on the method Appeals part is affirmed of the Court of and that of the decision Supreme equally Court. an divided concurred, Kavanagh, with whom Justice Levin Chief Justice agreed fee of the insurer that failure to award a to party’s Complete any denial of share to a was erroneous. showing supported only by that the have been would for Points Headnotes References 2d, 437, Compensation 644-647. 82 Am Jur Workmen’s §§ [1-9] attorneys with claims Compensation for services in connection 159 ALR 912. workmen’s act. under adequate attorney’s necessary repre- were not services provision sentation his would hold that client. He in the judgment ordering periodically *2 attorney compensation amounts of the to future fee allocable portion should be deleted. The insurer should expenses recovery relationship of which bears the same expenses recovery total of the the amount of reimbursement (before previously paid for on reduction account of such (before portion) recovery of bears to the amount the reduction expenses). on of account such concurred, Justice with whom Justice Coleman agreed compensation attorney of the insurer’s from the employee’s recovery by attorney is allowed statute where the preparation trying has contributed to the and of the suit. Expenses recovery by of the are to be shared insurer and the employee, expenses attorney and these include fees. He would determination, making hold that in this the trial court shall be 1963, guided by 928, GCR which establishes reasonable of limits may personal charged the injury fees that in a suit for wrongful death. trial court should also review the reasona- agreement bleness of the fee between the insurer and its attorney. attorneys agreed upon If the have a division of the by agree- reasonable total the trial court should abide the ment. The court should consider the value the services performed by attorneys, agreement attorney the fee each client, did, attorney had with his and the amount work each protection third-party of the incentive to take actions on a contingent-fee basis. The interest of the insurer at the time of includes liability its ascertainable reduced compensation benefits as well compen- as the amount already paid employee. Monthly payments sation by employee insurer to the to cover its fair share of the payment as its credit for advance appropriating takes effect is a reasonable method ex- pense Fitzgerald, Lindemer, Ryan Justice Justice and Justice took part no in the decision of this case. App (1973) 753; 211 NW2d 81 affirmed.

Decision of the Court Compensation Third-Party Expenses—At- 1. Workmen’s — Action — torney Fees. The fees of a workmen’s a carrier’s are by reasonable cost of where an covered Kroll v during injured the course of Compensation Act Workmen’s or settles his recovers claim employment suit and his institutes injuries causing against party where the a third attorney engaged by services toward the carrier contributes attorney representing result; the carrier is enti- successful of the settlement or out those services tled to be tortfeasor, third-party against and the judgment obtained determining the charged by reasona- statute with trial court is (MCL 418.827; including fees ble 17.237[827]). Opinion Kavanagh, J.C.

Levin, Attorney Compensation Third-Party 2. Workmen’s Action — Fees — —Apportionment. fee, compen- a workmen’s in an action A reasonable beneñciary tortfeasor which the sation intervened, carrier has insurance workmen’s attorney for the workman and be divided between should *3 insurer; complete any attorney of denial share for the showing supported only by attorney a that party’s can be one necessary adequate attorney’s were not services (MCL 418.827[6]; representation MSA his client 418.827[5] of [6]). 17.237[827][5] 17.237[827] Expenses—Ap- Compensation Third-Party 3. Workmen’s Action — — portionment. compensation requiring car- a workmen’s A trial court erred in against employee’s a third- intervened in an action rier which pay employee periodically party amounts of tortfeasor to payments of workmen’s com- fees allocable to future beneñts; provides apportionment pensation the statute fees, recovery, including attorney expenses as the interests of (MCL recovery parties appear at the time of 418.827[B] 17.237[827][6]). 418.827[6];MSA 17.237[827][5] Expenses—Ap- Compensation Third-Party 4. Workmen’s Action — — portionment. against third-party recovery Expenses a tortfeasor in an action apportioned compensation beneñciary by are to be a workmen’s employer employer’s employee and the or the between appear compensation their interests carrier as workmen’s regard to whether without the time compensation may or in fact do become beneñts workmen’s (MCL 17237[827][6]). 418.827[6]; payable MSA Compensation Third-Party Expenses—Ap- 5. Workmen’s — Action — portionment. compensation A which in workmen’s carrier intervenes an em- ployee’s third-party a tortfeasor action shall portion expenses which bears the same relationship expenses the total the amount of the reim- previously bursement workmen’s beneñts paid, portion, before of such reduction on account bears to the recovery, amount of the reduction on before account of such expenses. total by

Opinion Williams, J. Coleman, Compensation Third-Party Expenses—At- 6. Workmen’s — Action — torney Fees. by compensa- The in an action a workmen’s beneñciary against third-party tion a tortfeasor in which the workmen’s carrier insurance has intervened in- clude reasonable fees for insurer’s where (MCL participated preparing trying he has the suit 418.827[6]; 17.237[827][6]). MSA 418.827[5] 17.237[827][5] Compensation Third-Party Attorney 7. Workmen’s — Action — Fees —Apportionment. charged by determining trial court is statute with reasonable fees, including attorney of a workmen’s carrier which intervened in an a action work- compensation beneñciary against men’s tortfea- sor; making the determination of the reasonable total attor- ney fees, guided by the trial court be should the court rule contingency which establishes reasonable limits fees that may charged personal injury death, wrongful in a suit for agreement and should review the reasonableness of the fee attorney; attorneys between the insurer and its if the have agreed upon a division of the trial court should abide (MCL agreement 418.827[6j; GCR1963, 17.237[827][6J; 928). *4 Compensation Third-Party -Attorney 8. Workmen’s — Action — Fees —Apportionment. attorney plaintiff’s attorney Division of fees between and the attorney compensation a for workmen’s carrier insurance by in compensation which intervened an a action workmen’s against beneñciary third-party by a tortfeasor is the trial made (1) per- court which is to consider the value of the services Hyster Kroll Opinionby C. Kavanagh, (2) agreement each attorneys, had formed (3) did, client, each of work with the amount his (4) third-party protection take actions on a incentive to (MCL 418.827[6]; 17.237[827][6]). contingent-fee MSA basis Expenses—Ap- Compensation Third-Party Action — — 9. Workmen’s portionment. against Expenses tortfeasor in an action beneñciary apportioned compensation are to be a workmen’s employer employer’s or the and the between the appear compensation their interests carrier as workmen’s includes insurer’s ascertain- the time of the which compensation liability beneñts well able for future as reduced already paid beneñciary as the amount of (MCL 418.827[6]; 17.237[827][6]). Loria, Kelman, Downing, & Simpson Schneider plaintiffs. for

Johnson, Campbell & Moesta for intervenor. wras injured C. J. Leslie Kroll while Kavanagh, during forklift truck the course of his operating a Sliding Superior with Door Frame employment action He commenced an Company. truck. the manufacturer forklift

Company, wife, Kroll, seeking in the joined his action Louise services, damages society, loss her for husband’s affection. Mutual Insurance Liberty advice and insurer the workmen’s for Company, intervened. employer, Kroll’s returned a verdict Leslie jury Kroll in the the amount of and for Louise $50,000. The was satisfied. judgment amount hearing was held before post-judgment A the costs of Leslie Kroll’s apportion circuit court and to Kroll and insurer recovery between amount to receive determine what was reimbursement it had was to to Kroll. and what amount work legal did most of Kroll’s *5 281 Kavanagh, C. J. prep- did some lawsuit. The insurer’s throughout present aration and was trial. Compensation Section 827 of Workmen’s Act 17.237(827), 1969, 418.827; MCLA sets procedure third-party forth the to be followed workmen’s actions. Subsections 5 prescribe to be how is divided. * * * "(5) Any recovery against party the third for damages resulting personal injuries or from death only, deducting expenses recovery, after shall first reim- employer any paid burse the payable carrier for or amounts or under this act to date of and the paid balance shall forthwith be or his dependents personal representative and shall be payment by treated as an employer advance on any payments account of future bene- fits.

"(6) Expenses of recovery shall be the reasonable expenditures, fees, including attorney incurred in effect- ing recovery. Attorney agreed unless otherwise upon, among shall attorneys be divided for the plaintiff Expenses as directed by the court. of recovery apportioned by shall be parties the court between the as their appear recovery.” interests at the time of the judgment entered the circuit di- court $32,337.39 rected that to the insurer to reimburse it it had proviso pay Kroll, with the the insurer shall lawyer Kroll’s sum, i.e., one-third said proportionate $10,779.13, "as the share of the plaintiffs attorney judgment provides fees”. The amount received Kroll his share against” compensa- is "a credit tion and medical which the insurer is obliged pay Compensation under the Workmen’s Act and that since the insurer "shall hereafter paid Kroll, receive the benefit” the amount it Opinionby C.J. Kavanagh, any compen- Kroll, one-third monthly, shall compensable or other or medical sation Act which Compensation under Workmen’s insurer, but *6 time as until such obligated pay be to would of the credit amount benefits has been consumed.

and the circuit court held that Appeals Court of to award failing in to erred this case to and remanded for the insurer attorney hearing to determine for a the circuit court the insurer’s rendered value of the services not address the Appeals did The Court of attorney. properly court re- circuit whether question of any Kroll one-third pay the insurer to quired the insurer would or other benefits for the obliged pay be to but payment”. resulting "advance additionally Appeals Court of We affirm the requiring erred in court that the circuit conclude respect in to amounts pay to the insurer realizes periodically fees attorney resulting from payment of the advance the benefit third-party recovery. Service, Inc, 35 Mich In v Moto-Crane Banoski (1971), majority, 487; 555 192 NW2d App Vetor, 328; 94 NW2d 355 Mich Potter v relying on its (1959), the insurer had to held that 832 held but also plaintiffs attorney share of the not entitled to reimburse- the insurer was that attorney did because its attorney fees ment of its the case. Justice trying preparing not assist Banoski, dis- panel on the who was Levin, respon- the trial court’s sented, that it was saying a reasonable what constitutes to determine sibility that fees and then divide expenditure for the figure between Mich J.C. Kavanagh, the employee. for the Justice Levin main- tained complete any that denial of share to a party’s attorney only have been supported would aby showing attorney’s that services were not adequate representation necessary of his client.

In the Court of Appeals instant case the panel adopted reasoning. Justice We also find Levin’s persuasive. Justice reasoning On Levin’s remand the circuit court shall determine what expenditure constitutes a reasonable for attorney fees for counsel for Kroll and counsel shall, insurer and provides, as the statute "divide” that amount among counsel for Kroll and counsel for the insurer.

Injured workmen who obtain third-party recov- argue eries employer or his insurance carrier may obtain benefit of the entire third- *7 party recovery either in the form of reimburse- ment paid for benefits to the date recovery or as an "advance payment” on account of any future benefits and contend that em- the ployer/insurer should accordingly ex- pay the penses of recovery allocable to the pay- "advance ment”: In this case the accepted circuit court argument part by in requiring reimburse Kroll periodically, as benefits would have become due but for the advance payment, one-third of such benefits in respect "plaintiffs attorney fees”.

The statute provides that "[ejxpenses recovery apportioned shall be by the court between the parties as their interests appear at the the time of recovery”. The "expenses are "the recovery” expenditures, including reasonable in effecting recovery”. incurred The third-party is a benefit the Kavanagh, by J.C. Opinion injured employee.

employer/insurer to the recovery, deducting expenses re- After employer/insurer covery first reimburses already paid. is to the The balance benefits employee. to the immediate benefit —an pay- an advance That balance is also treated employer of future com- on account ment potential pensation to the benefit em- benefits —a ployer Whether carrier. his insurance depends employer/insurer realizes benefit fact pay- compensation benefits are on whether future able; disability, death, or termina- from may dependency result termina- status tion of obligation. employer/insurer’s tion of the injured employee Since the amount (and payment) advance are the amount of the in a sense the reduced employee employer/insurer both, at the and the "pay” expenses of time, same the decisions of the Court We considered have jurisdictions Appeals con- in other and of courts struing have concluded other statutes and apportioned, as our are to be injured clearly provides, em- between statute employer/insurer ployee and the on the one hand appear time on the other "as their interests (emphasis supplied), recovery” i.e., without regard to whether payable.

may or in fact do become for determina- the circuit court We remand to attorney fee for division a reasonable tion of representing counsel of that amount between *8 ordering judgment provision parties. in the periodically pay in amounts the insurer respect fee allocable is deleted. portion the ex- shall The insurer Opinionby J. Williams, penses same which bears the relation- ship to the the amount total (before previously paid reimbursement for benefits portion) reduction on account of such bears to the (before amount of reduction on ac- count of expenses). such

Affirmed. party prevailed No costs as neither in full.

Levin, J., concurred C. Kavanagh, with J. JJ., Ryan, Fitzgerald, Lindemer, took no part in the decision of this case. (concurring part; dissenting in

part). First, This case raises three issues. where both an a employee worker’s insurer are against involved a successful suit a defendant, should the attorney for the payment receive from the total legal provided services he in the preparation suit, trying of the 418.827; under MCLA 17.237(827)?

Second, in action, such a third-party how are the attorneys’ fees to be divided between for the insurer and the for the employee?

Third, how is the burden including attorneys’ to be appor- tioned between and the insurer?

I— Facts Plaintiff-appellant Leslie Kroll injured was paralyzed from 23, the waist down on July while operating forklift during track the course of his employment with Superior Sliding Door Company. Frame 1966,

In January he brought suit *9 Kroll Williams, J. of manufacturer forklift Hyster Company, wife, Kroll, joined his suit truck. Louise services, of her husband’s seeking for loss damages affection. society, advice and insurer for Kroll’s compensation The workmen’s Company, Insurance Mutual employer, Liberty intervened. was, for trial, moved and Kroll

After the first trial, the jury In the second a trial. granted new in the amount Leslie Kroll a for returned verdict in the amount of Kroll for Louise $50,000. was hearing held for to

Subsequent judgment, pursuant to dividing judgment purpose of 17.237(827). 418.827; MCLA $32,337.39 to be to judge The trial ordered it it for had the carrier to reimburse the carrier must Kroll, that paid to but added of the work legal did most attorney, to Kroll’s who i.e., sum, lawsuit, that in the 33-1/3% $10,779.13 as the fees $182.16 The balance expenses. share of other carrier’s attorney. to and his go was to to as a was serve portion Kroll’s that future any credit However, the car- to pay. be liable insurer would installments, monthly pay, ordered rier was any one-third inde- have been liable subsequently it would

which share of the to cover its pendent in the gaining its interest expense Appeals, to the Court appealed 1) it to com- entitled the statute alleging employee’s fees out of the pensated 2) method of the trial court’s unreasonable. attorneys’ fees was awarding on with the insurer Appeals agreed The Court Opinionby the first to the trial issue and remanded court for a hearing to the value of the determine services of the insurer’s attorney. speak

The Court of did not Appeals second issue.

Kroll to this for leave applied appeal, Court to the granted and we cross-appealed, leave 3, on January 1974. Right Attorney

II —The of the Insurer’s to be Compensated Employee’s Recovery the from Section 827 of the Worker’s Disability Compen- 1969, sation Act 418.827; of MCLA 17.237(827), guidelines establishes the for dividing recovery in compensa- workmen’s tion action as follows: "(5) In liability an action to enforce the of a third

party, employee plaintiff may any recover amount which the dependents personal or or representative his would be in entitled to recover an in Any action tort. recovery against party death damages the third resulting personal from injuries only, or deducting after expenses shall first employer reimburse the or carrier any amounts payable or under this act of recovery to date and the balance shall forthwith be dependents or his personal representative and shall be treated as pay- an advance by employer ment on any account of pay- ments benefits. "(6) Expenses recovery shall be the reasonable expenditures, fees, including attorney incurred in effect- ing recovery. upon, Attorney agreed unless otherwise among shall be attorneys divided for the plaintiff by Expenses as directed recovery court. apportioned shall be by parties the court between the appear as their interests recovery.” the time of the

We think it clear that these provisions allow for Hyster Company v attorney from the insurer’s he has where contributed employee’s the suit. trying preparation (6), expenses

Under subsection employee, the insurer be shared are fees”. "attorney include and these of the employee’s It the fees is well settled which 'must are and the employee. shared both Vetor, 328; (1959); 94 NW2d 832 Potter 355 Mich Engineering Corp, v Stone & Webster Horsey (WD Mich, 1958); Banoski v Moto- Supp F Crane, Inc, 487; 192 NW2d 555 App 35 Mich (1971). simply in this case has Appeals

The Court of concluded, Judge then in concurrence with Levin’s Banoski, supra, that where dissenting opinion participated prepar- the insurer’s has suit, or her is ing trying his *11 an of which must be shared expense also agree. the We As by employee. stated in Banoski’s dissenting opinion: "Manifestly, had a substantial interest [the insurer] by in ployee] commenced the outcome the action [em- represented by to be counsel. It and was entitled obliged rely [employee’s] lawyer was not on the represent view, point From its interests. [the insurer’s] lawyer expense to its are an the fees 487, App 497. recovery.” 35 Mich Legislature conclusion that intended to the insurer’s as an attorney include fees is buttressed the fact that expense (6) attorney subsection directs fees be employee’s divided between attorney Vetor, supra, p Potter v 332. attorney. insurer’s case, instant the trial court did not take In the Opinionby into account the value of the services the insur- dividing er’s Therefore, Appeals properly the Court of remanded to the trial court for a determination of the value of the attorney. services of the insurer’s We affirm the Appeals Court of on this issue. Attorney

Ill — Method of Division Fees employee’s Given that and the insurer’s compensated are entitled to be for ser- preparation vices rendered in the and trial of this question case, the becomes how much each attor- ney employee’s recovery. is to receive from the 17.237(827), Under 418.827; MCLA attor- ney expense recovery. (6) fees are an The trial charged by court is subsection of this statute to determine what the "reasonable” of re- covery, including attorney fees, are in a third- party step calculating Thus, action. the first division of the fees is the determination attorneys of the reasonable total fees for all concerned. making

In determination, this the trial court shall 1963, 928, look to GCR which establishes contingency may reasonable limits of the fees that charged personal injury wrong- in a suit for guided thereby. ful death and be The trial court should also review the reasona- agreement bleness of the fee between the insurer attorney. proportion and its below, As shown goes of the total fees which to the insurer’s attor- ney agreement. will often be affected this fee *12 (6), attorneys

Second, under subsection if the agreed upon have the division of the reasonable by total agreement. the trial court should abide this Hyster Company 295 (6) Third, if directs that subsection there is no agreement, such fees "shall be di- among attorneys plaintiff vided directed the court”. making

The court in the division should con- performed by sider the value of the services attor- neys, agreement each had with his ensuring necessity client, attorneys and the working contingent compensated on a fee are basis sufficiently to ensure that the incentive to take protected. actions on such a fee basis is attorneys’ If the total reasonable fees determined by the court are less than the sum of the amounts agreed originally attorneys and their attorneys appro- clients, the fees of both should be priately assuming reduced, the insurer’s preparation trying contributed in the suit. employee’s attorney

Where the and the insurer’s attorney have both rendered substantial service in preparation following suit, and trial of the sample might appropriate. pre- calculation cise method of calculation used here is not in- mandatory, tended to be acceptable apportionment. but is illustrative of an situations,

In other may modifications have to be made to take into they appear account the factors listed above as specific case. Unadjusted Attorneys’ Calculation of Total Fees Attorney’s $52,000 Salary Insurer’s Per Year Working Days Number of Salary Per Year Day Per $ ($52,000/260) Unadjusted Attorney’s 4,000 Insurer’s Fees $ (Assume suit) days work on Employee’s Attorney’s Unadjusted $40,000 Fee

(One-third contingency fee for work) major part of Unadjusted Attorneys’ Total Fee *13 Williams, Opinion by J. Court-Adjusted Attorneys’ Calculation of Fees Division of $40,000 Adjusted Attorneys’ Total Pees (Contingency agreement fee if within 928) 1963, limits of GCR Attorney’s Percentage Insurer’s of Total Unadjusted ($4,000/$44,000) Fees 9% Employee’s Attorney’s Percentage of Total Unadjusted ($40,000/$44,000) Fees 91% 3,600 Adjusted Attorney’s Insurer’s $ Fees (9% $40,000) Employee’s Adjusted Attorney’s Fees (91% $40,000) In case, the instant has no agreement there been as to how the attorneys’ reasonable fees are to be Thus, divided. the trial court on remand must divide the fees and attorneys’ should take into account the factors summarized here. Apportionment

IV — The Burden Expenses Recovery There remains the third issue: how should the burden of the expenses of recovery, including at- torneys’ apportioned be between the em- (6) ployee the insurer? Subsection directs that shall apportioned be- parties tween the "as their appear interests at the time of recovery”. their appear interests at the time of recov-

"[A]s ery” reasonably mean, must be construed to as to interest, the insurer’s both the reimbursement which the insurer is entitled theretofore made to the employee, and the ascer- tainable excused liability for future compensation benefits. cases,

In many including us, the case before where there is total and permanent disability dismemberment, the incapacity of the is time, deemed to continue for specific period of below, liability the insurer’s explained apparent is at the time apportionment

It argued has been made with reference in this must be case is to be to the amount which only repaid from the *14 paid at

already payable the clear But this violates lan- recovery. time of the statute. guage if insurer to approach,

Under this an was re- $100,000 recovery to cover of a ceive compensation already benefits cost worker’s the insurer’s share of the employee, No reference would be expenses would be 5%. interest its reduced liabil- made the insurer’s benefits which compensation ity payment in the future but for the required would have been under the statute is employee’s recovery, which of those benefits. payment treated as an advance unfair and mis- approach grossly This would be taken. above, cases, including many

As noted us, apparent it is at the time of clearly case before parties are not recovery that the interests the amount of which represented by point, the insurer has to that actually employed amount which is received the time of of recov- example, that at the time Suppose, action, a amount negligible in the ery had been payments of worker’s compensa- but the worker’s employee, made to resolved, had it had in this tion proceedings permanent disability case, there was total and Disability meaning of the Worker’s within 418.351; MSA Act. Under MCLA Compensation Mich Opinion by 17.237(351),1 a of total finding incapacity entitles the employee presumption to a conclusive total and the insurer’s incapacity liability will continue period for a of 800 Only weeks. after this 800-week period question is the of the continuance of the total disability open again. once (6)

If we were to read subsection to mean that apportionment is to be made without regard to payable to the em- ployee, in this example, where little worker’s compensation had been paid, would be burdened with very small proportion expenses of recovery because "at the time of the recovery” it would have such an insignificant in- terest in the recovery.

This result is patently absurd and grossly unfair. At the time of recovery, it clearly appears that is going to be excused liability for payment of compensation period for a of 800 weeks or until its excused liability equal is to the entire recovery *15 of the employee.2 This most certainly constitutes a very substantial, in total, fact potentially interest 418.351; 17.237(351) MCLA pertinent part MSA in states as fol lows: presumption "The permanent conclusive of total disability and beyond shall not extend thereafter injury weeks from the date of question permanent the of disability and total shall be fact, determined in accordance may with the as the fact be at that time.” 2It is true that the insurer period is not certain to be liable for a of permanent 800 weeks where disability. there is a employee If the dies immediately following injury, not injury proxi the and the was the death, might mate cause of the period be liable for a of 500 418.375; 17.237(375) weeks under MCLA MSA 418.321; MSA and MCLA 17.237(321). However, require the certainty statute does not as to the interests parties. impossible (6) of the Such would be to ascertain. Subsection speaks recovery. parties of they the interests of appear the at the of time presumption Since there can be no period, that the will die recovery clearly within the appears 800-week it at the of time company that the insurance payment would be liable for the period. of benefits for the 800-week Opinion insurer’s share of if the yet the recovery,

in amount the small on expenses is based part bear a fair not it would compensation paid, expenses of under MCLA arise might Similar situations 17.237(361) 418.321; and MCLA 418.361; MSA that conclu- provided is 17.237(321), it where continuing disability vary- presumptions sive upon finding a of a in effect time are ing periods of example, where For injury. type particular is deemed disability leg, a is the loss of there 215 weeks. period for a to continue of only on the basis Apportionment at time of actually paid has the insurer what case such as that in a also mistaken recovery is standpoint policy practical, a us from before results. If the absurd certain other it lends to insurer, therefore its share of of the interest of the on the basis is calculated expenses, had the em- the insurer amount benefits delay becomes recovery, the time of ployee of time longer period the employee. ally the more recovery, time of passes which before actually paid at will have greater and therefore time of It carry. have to is it will of the share in- Legislature to believe difficult very aggrieved an a situation where to create tended until a suit delaying be rewarded party would and for grievance, of the the cause long after litigation. the course prolonging Moreover, identical situa- virtually employees recoveries different substantially have tions would in a court his suit employee brought one because prob- congestion particularly was where docket *16 time of in the lem, delay unintentional causing an of the share in turn increase which will recovery for. insurer will be liable expenses reasons, reject For all we these method of apportionment which not expenses of does take into account the insurer at interest of the time recovery of liability its for future reduced com- pensation benefits. sake,

For clarity’s sample calculation of a proper apportionment of burden of follows.

Assume that suc- cessfully bring a third-party resulting action in a $200,000 Insurer, at the time of recovery, $20,000 has benefits, to the employee due to a presumption conclusive of continuing disability, appears at time of recovery to be $20,000. liable for ultimately another The expenses $50,000. of total recovery First, deduct from total recovery. Recovery $200,000

Total — Expenses 50,000 Less $150,000 Balance Second, calculate the interest of the parties at the time of recovery, independent expenses. Interest of the insurer: 20,000 Reimbursement for benefits $ payment Excused future 20,000 of benefits =

40,000

$ Percentage interest at the $200,000 time of 20% $160,000 employee:

Interest of the Percentage interest $200,000 time of 80%

Third, calculate the apportionment expenses. expenses: Insurer’s share $50,000 = 10,000 20% $ Employee’s expense: share of = 40,000 80% $ Fourth, calculation of the method of payment for insurer. *17 301 Kroll Williams, Opinion by J. 20,000 already $

Amount of benefits - = = 50% 40,000 $ liability Total of insurer its share of the pay may 50% on a now', weekly the other expenses 50% the benefit of the actually as it receives basis which serves to recovery portion employee’s of the In our example, payments. future benefit excuse (expenses to would come weekly payment the 25% of the benefits which recovery) divided the total pay. had to the insurer would have $5,- formula, would pay Under this time of at expenses 000 $5,000 on a employee weekly the other to carrying him for at the time compensate to basis portion of a of the recov- recovery to the benefit of the ultimately goes which ery insurer, employee.3 not the sum, in the instant case was

In the trial court in- the interest concluding correct must include its surer the time of as well as the amount payments credit for advance employee. to the compensation already incorrect, as was concluded The trial court was into in its failure take Appeals, the Court of of the insurer’s right account provided. compensation for services it insofar as Appeals affirm the Court We hear- trial court for a this matter remands 3 payment probability cash In there would be no actual all remaining would credit to which the insurer but rather the pro would be reduced tanto before entitled (as charged. payment compensation payment was So for the first $100)— sumed $20,000 remaining Credit Minus share 25 $19,975 Minus remaining. credit 398 Mich on ing of the service value insurer’s determination, attorney. Upon this should be in manner consistent with divided this opinion.

The Court of and the trial court Appeals are in part reversed in and affirmed part herein- above indicated. costs,

No neither party prevailing in full. *18 Coleman, J., concurred with