The Pennsylvania Supreme Court held that the Commonwealth Court misconstrued Section 440 of the Workers’ Compensation Act in precluding an award of attorney’s fees to a claimant when an employer had established a reasonable basis for seeking a termination of benefits. Based on the meaning of the terms “shall” and “may,” under Section 440, when a contested case is resolved in favor of an employee, a reasonable sum for attorney’s fees shall be awarded to the claimant. Such an award is mandatory. Where, however, the employer has established a reasonable basis for the contest, an award of attorney’s fees may be excluded. In other words, the WCJ is permitted, but not required, to exclude an award of attorney’s fees. The Commonwealth Court disregarded the distinction between the terms “shall” and “may,” and failed to recognize the discretion afforded to the workers’ compensation judges to award attorney’s fees even when they find a reasonable basis for an employer’s contest.
