Is an employee's attorney's fees deductible from the amount paid by the employer for reimbursement for compensation paid to the employee?

Under these provisions, the amount of the settlement is subject to deduction of both the reimbursement due the employer, and the attorney fees; and where the settlement is effected solely through the efforts of the employee's attorney, his fee is in effect given priority in that it is to be deducted from the amount of the settlement before the employer is reimbursed therefrom. Eldridge v. Truck Ins. Exchange, 253 Cal.App.2d 365, 367, 368, 61 Cal.Rptr. 347 (1967). However, there is nothing in Labor Code, 3860, Supra, which justifies the conclusion that where settlement is effected solely through the efforts of the employee's attorney, his fee is to be Deducted from (rather than given priority over) the amount due the employer for reimbursement for compensation paid the employee.

Such is the interpretation given Labor Code section 3860, Supra, in Johnson v. L.D.S. Trucking Co., 254 Cal.App.2d 496, at pages 498--499, 62 Cal.Rptr. 501 at page 503 (1967), where the court stated: