This case presents an intricate problem in the allocation of the recovery in an action brought by an injured longshoreman against a shipowner under the Longshoremen’s and Harbor Workers’ Compensation Act (LHCA), 33 U.S.C. § 901 et seq. Because of the difficulty of the questions involved, we granted a rehearing to permit both sides to explore the issues in more depth. Having held the rehearing, we adhere to our original decision reversing the judgment of the district court. For the purpose of clarifying the relationship of this case to Strachan Shipping Co. v. Melvin, 5 Cir. 1964, 327 F.2d 83, and Haynes v. Rederi A/S Aladdin, 5 Cir. 1966, 362 F.2d 345, we withdraw our decision in this cause dated April 10, 1972 and issue the following opinion.
I.
Cleveland Chouest, a longshoreman, was injured while swinging from the crewboat CARDINAL to an offshore platform. A & P Boat Rentals, the defendant, owned the CARDINAL. Travelers Insurance Company, the compensation insurer of Chouest’s employer, Buras Contractors, Inc., paid Cliouest $4610.61 for medical expenses and compensation on Buras’s behalf in fulfillment of Buras’s responsibilities under the LHCA. Chouest then hired an attorney to sue A & P as a third party tortfeasor. Travelers intervened in Chouest’s suit in an effort to recover the amount of the payments it had advanced Chouest before he brought the action against A. & P. A. & P, the ship-owner, in turn joined Buras, the stevedore, as a third party defendant, seeking to hold Buras liable as indemnitor for any judgment he might have against A & P. Because Travelers was the liability insurer for Buras as well as its compensation carrier, Travelers was obligated to provide a defense for Buras to the third party complaint of A & P. Travelers retained one lawyer to represent both of its positions in its lawsuit: (1) its intervention claim for a portion of the proceeds of Chouest’s recovery as well as (2) its defense to any liability for Chou-est’s injuries should Buras be cast as the indemnitor of A & P.
As might be expected, Travelers found itself with conflicting interests in the litigation. The success of its intervention for recoupment of compensation payments depended upon a recovery by Chouest against A & P. Yet its potential liability as insurer of Buras required Travelers to assert certain defenses contrary to Chouest’s theory of recovery. As a consequence, the cross-examination of Chouest tended to limit the quantity of recovery and to suggest that Chouest himself was negligent. In addition, Travelers’ lawyer cross-examined Chouest in an effort to show that the difficulties Chouest had experienced with his knee were in part the result of a condition pre-existing the injury in litigation.1 In the end, damages were lim*1028ited compatibly with that theory of preexisting injury.
The sole issue for review today is whether the district court properly denied the claim of Chouest’s lawyer that his fee be deducted from Chouest’s gross recovery before Travelers, as intervenor, recouped its compensation payments to Chouest.2 Chouest’s lawyer contends that Travelers benefitted from his attorneyship because he created the fund out of which Travelers was paid for its compensation advances to Chouest. Specifically, Chouest’s lawyer stresses the adverse role played by Travelers’ lawyer at the trial, and insists that it would be unfair not to charge Travelers for the services of Chouest’s attorney when Travelers not only did nothing to assist in the recovery by Chouest, but also took steps detrimental to Chouest’s cause.
To these contentions Travelers has three responses. First, Travelers argues that its attorney did in fact assist Chouest. Second, Travelers points to an oral pre-trial stipulation which arguably guaranteed it reimbursement for the full amount of its advances to Chouest.3 Travelers explains that this *1029stipulation led it to believe it was free to devote all its efforts to defending the third party complaint against Buras —indeed, that it was free to fire away at Chouest’s case against A & P without threat to its right to full reimbursement. The district court explicitly held that Chouest had entered into the stipulation in error. Moreover, there is no reason why Chouest’s attorney should have agreed to permit Travelers to recoup its compensation payments in full regardless of the behavior of Travelers’s lawyer at trial. Chouest would have nothing to gain, and everything to lose, from such a stipulation. In these circumstances, the proper interpretation of the ambiguous stipulation was that attached to it by the district court: the parties merely agreed that the amount of the medical and compensation payments to Chouest was not in dispute, as a means of avoiding the tedious business of putting on witnesses as to evidence of the uncontroverted amounts.
Even if the stipulation be of no effect in warding off Chouest’s lawyer’s claim for reimbursement, Travelers argues as a matter of law that it should recoup the full amount of its compensation payments, regardless of the position it took at trial. The district court apparently considered that our decision in Haynes v. Rederi A/S Aladdin, 5 Cir. 1966, 362 F.2d 345, prevented reimbursement of a longshoreman’s lawyer whenever the employer-intervenor employs its own counsel to protect its position at trial — regardless whether protecting the employer's position has a positive or negative impact on the longshoreman’s chances for • recovery against the shipowner. The district court awarded Travelers full reimbursement for compensation advances to Chouest and allowed Chouest’s lawyer no reimbursement for creation of the recovery against A & P. As we shall explain, the district court read Haynes too broadly.
II.
Section 933 of the LHCA explicitly provides for actions by employers of injured longshoreman against third parties who may be liable in damages.4 Section 933(e) sets forth the distribu*1030tion of the proceeds of any recovery by the employer in a third party action. The employer retains a) his litigation expenses including a reasonable attorney’s fee; b) medical expenses and compensation payments made to the employee as well as the present value of these payable in the future; and c) an incentive bonus of 20% of any amount remaining after deduction of litigation expenses, compensation payments, and medical payments. The statute at the same time preserves the longshoreman’s right to sue third parties responsible for his injuries, in the hopes of obtaining a recovery higher than the amount of the compensation payments to which he is entitled by the LHCA. Seas Shipping Co. v. Sieracki, 1946, 329 U.S. 85, 101, 66 S.Ct. 872, 90 L.Ed. 1099; Corrado v. Pennsylvania R. Co., 2 Cir.1948, 171 F.2d 73, 75. Unfortunately, there is no legislation establishing a distribution of the longshoreman’s recovery in actions which he initiates, as § 933(c) establishes distribution of the employer’s recovery against third parties. This casts upon the federal courts the burden of distributing the amount of the longshoreman’s recovery.
Twice before today, this Court has considered the proper allocation between a longshoreman and employer-intervenor (compensation carrier) of the proceeds of a longshoreman’s recovery against a negligent shipowner, in a situation where the proceeds of the recovery were insufficient to provide both full reimbursement for the employer’s compensation payments and the attorney’s fee of the longshoreman’s 'lawyer. In Strachan Shipping Co. v. Melvin, 5 Cir.1964, 327 F.2d 83, the longshoreman’s gross recovery in his third party action ($30,000) exceeded the compensation and medical payments by his employer ($27,836.92). The question presented was whether Melvin’s attorney would be permitted to collect his 40% contingent fee out of the $30,000 gross recovery before the employer was reimbursed for his advances to the longshoreman. We affirmed the district court’s decision to allow Melvin’s attorney a $12,000 fee, plus $588.88 in expenses, before the employer was reimbursed for his advances to Melvin. In our decision in Melvin we stressed “the age-old equitable principle that one who accomplishes the creation of a fund for the benefit of another is entitled to reimbursement therefrom for the reasonable costs thereby incurred.”5 Melvin, supra, 327 F.2d at 85, quoting Voris v. Gulf-Tide Stevedores, 5 Cir. 1954, 211 F.2d 549, 551.
Our later decision in Haynes v. Rederi A/S Aladdin, 5 Cir. 1966, 362 F.2d 345, is consistent with Melvin’s principle of equitable reallocation, even though it placed limits on the Melvin decision. In Haynes, we again had before us an employee’s third party action which resulted in a recovery greater than the compensation owed but less than sufficient to pay both the employee’s attorney fees and the employer’s compensation advances to the employee. There we held that the lower court was correct in refusing to allow the employee’s attorney to deduct his fee before the compensation insurer was reimbursed out of the gross recovery. In Haynes, unlike Melvin, the employer’s compensation insurer engaged its own attorney who “actively asserted” the compensation insurer’s rights as interve-nor. The compensation insurer stood along side, and waged war in aid of the injured longshoreman. The compensa*1031tion insurer’s “own counsel were responsible, at least in part, for the reimbursement allowed it.” 362 F.2d at 351. Distinguishing Melvin, we said the crucial fact there was that “the compensation insurer was not represented by its own counsel during the trial of the third party suit, and thus the attorneys for the injured workman were solely responsible for the fund which ultimately benefitted the insurer.” 362 F.2d at 351 n. 13.
The peculiar posture of the present case places it within the ambit of Melvin rather than Haynes. Though counsel for Travelers participated actively in the trial, Chouest’s attorney, like Melvin’s attorney, found himself carrying the entire burden of proving the longshoreman’s claim for recovery. Travelers had reason both to support and oppose Chouest’s claim. Yet — perhaps because of an erroneous belief that the pretrial stipulation guaranteed its recoupment — Travelers adopted a position at the trial that was wholly adverse to that of Chouest. Travelers candidly admits that “the main concern of counsel was to defend and exonerate Buras Contractors, Inc. from the third party demand filed by defendant A & P Boat Rentals, Inc. for indemnity.” The record bears out this statement. Despite his contentions to the contrary, Travelers' counsel at best did nothing to assist Chouest’s case against A & P; Melvin, supra. 6 Through cross-examination of Chouest, Travelers’ counsel dealt a damaging blow to the quantum of Chouest’s recovery. It offends both our prior decisions and the spirit of fairness which they embody to suppose that Travelers could hammer away at the plaintiff’s case without paying a reasonable fee for the services of the plaintiff’s lawyer which resulted in Travelers’s financial benefit. We hold that an employer-intervenor who benefits from the plaintiff’s recovery against a shipowner must compensate the plaintiff’s lawyer for his efforts when, as here, the employer-intervenor’s counsel, by virtue of his client’s third party defense, adopts a position at the trial which is totally adverse to the plaintiff's cause.
From a subjective point of view, it is possible to deny that the employer benefits from the efforts of the plaintiff’s lawyer. As Judge Mansfield put it:
It cannot be said that [the employee’s lawyer] undertook to render services for the benefit of the employer or its compensation carrier, since their interests were adverse to those of plaintiff and they in fact opposed plaintiff’s suit, thereby negating any inference that they considered plaintiff’s attorney to be acting for them.
Russo v. Flota Mercante Grancolombiana, S.D.N.Y.1969, 303 F.Supp. 1404, 1407. 7
But we cannot agree that the employer’s interests are entirdy adverse to *1032those of the plaintiff-employee, and we see no basis for believing that the position taken at trial by the employer is any reliable indication of complete adversity.8 At least on the facts before us, the employer of his carrier has divided loyalties; that is the crux of the problem. Especially when his compensation payments to the injured employee have been sizeable, the employer or his carrier will want to recoup those payments from the shipowner if it is possible to do so. Recoupment depends directly upon the success of the employee’s action against the shipowner. The employer will also want to protect himself from a claim for indemnity asserted against him by the shipowner. That position may compel him to assert defenses and to develop evidence tending to defeat or to limit the employee’s recovery. If the employer weighs his interests, decides that he is more concerned to defend himself from the shipowner’s claim for indemnity, and takes that course of action at trial, his interests temporarily appear adverse to those of the plaintiff. When the dust settles, though, and the employer accepts a check for the amount of his compensation advances to the employee, he suddenly discovers that his interests are not entirely adverse to those of the employee plaintiff after all. The proof is in the pudding:9 the labors of the plaintiff’s lawyer have put the employer in a better financial position than he was in before the litigation began. Of course, if the lawsuit results in no financial benefit to the employer, there is no pudding, and no need for reimbursement of the plaintiff’s lawyer. Ballwanz v. Jarka Corporation of Baltimore, 4 Cir. 1967, 382 F.2d 433.
Nor are we dissuaded from requiring compensation of the employee’s lawyer *1033by the suggestion that compensation payments to the employee create a lien in favor of the employer enforceable without intervention. See Ballwanz v. Jarka Corporation, supra; Russo v. Flota Mercante Grancolombiana, supra; Riddick v. Rederi A/B Fredrika, E.D. Va.1967, 271 F.Supp. 360. The employer still derives his reimbursement from the fund created by the employee; and the employee’s lawyer devotes his efforts to creation of the employee’s fund. Lien or no lien, there could be no recovery by the employer were it not for the efforts of the employee and his lawyer.
Nothing we say requires an employer-intervenor to refrain from asserting its third party defense, or in any sense burdens his due process right to defend himself from third-party liability. The company made its choice at trial: to devote its own efforts to exonerating Buras and to hitch a ride on the coattails of Chouest’s lawyer for the compensation payments. Having made that choice, and having successfully hitched its ride with Chouest, our decision requires Travelers simply to pay what is due to those who helped the company along.
III.
Having decided, then, that some reallocation is necessary in this case to provide fair treatment as between the inter-venor, on the one hand, and the plaintiff and his lawyer, on the other, we turn to the potential conflict between the interests of the plaintiff-employee and those of his attorney.10 The conflict is one to which we must be equally attentive, for at some point, treatment of the employee’s attorney can become so favorable as to divert to the attorney the lion’s share of the employee’s potential recovery against third parties. Were that division of the spoils to become the rule, the employee’s right of action against third parties, carefully preserved by Congress, would be worth little to the injured employee.11
Our task, then, is to discover a division of the recovery which is a) fair to plaintiff’s lawyer and b) fair to the injured workman himself. For the rea*1034sons so well stated by Judge Brown in his dissenting opinion in the Melvin case,12 we conclude that the particular formula for reallocation approved by the court13 *1035does not provide treatment for the longshoreman sufficiently advantageous to preserve the third party action as a viable alternative open to the injured longshoreman.14
We do not feel compelled to choose between the inequities of the Melvin formula, on the one hand, and the inequities of an altogether contrary rule on the other. Congress has not spelled out a formula for dividing the recovery in employee-initiated third party actions. Perhaps it did not do so because it could foresee the variables outlined in the preceding part of our opinion today, and concluded that detailed statutory treatment would be inappropriate. Until Congress does provide a specific formula, it is our responsibility to divide third party recoveries in the manner we feel best accords with the purpose of Congress in enacting the LHCA — to provide a swift and efficient compensation scheme for maritime workers while preserving intact a viable right of damages against third parties for sums beyond those minimum sums authorized as compensation.
We hold that the gross recovery by Chouest must be divided so as to tax both Chouest and the intervenor Travelers for their proportional shares of litigation expenses — including both attorney’s fees and other costs and fees. The recovery should be divided according to the following plan, assuming for purposes of clarity that Chouest’s attorneys operated under a 33%% contingent fee agreement, and that other expenses of the suit approximated $1000:
1) Total (gross) recovery $4959.00
2) Gross share of Travelers (amount of
compensation and medical payments advanced to Chouest) 4610.61
a) Less: 33V3% attorney's fee payable to Chouest's lawyer 1536.87
$3073.74
b) Less: 93% of other litigation expenses (93% =4610;61_ 930.00
4959.00
c) Travelers' net recovery $2143.74
3) Gross share of Chouest 348.39
a) Less: 33Va% atty fee 116.13
$ 232.26
b) Less: 7% of other litigation expenses (7% =34^39)^ $ 70.00
4959.00)
c) Chouest's net recovery $ 162.26
According to this formula, both Chouest and Travelers pay attorney’s fees and *1036litigation expenses in proportion to their recoveries.15 Chouest’s attorney seems to receive more than Chouest himself; but Chouest has recovered the excess of his gross recovery over the compensation and medicals previously advanced to him, less a fair attorney’s fee on that excess and a pro rata share of the litigation expenses.16 If the excess recovery had been larger, Chouest would pocket % of every additional dollar of the judgment — assuming, of course, that litigation expenses remained about the same.17
*1037Reallocation need be undertaken only-in very limited circumstances. Melvin, of course, required reallocation where the intervenor never even retained counsel to represent it, and thereby threw the entire burden of the litigation onto the plaintiff’s attorney.18 In the present case we hold that reallocation is likewise mandated where the interven- or’s attorney contributes nothing of material assistance to the plaintiff’s case, and instead devotes his efforts to undermining it. The likelihood of the inter-venor’s attorney adopting such a stance is slight, particularly since the 1972 amendments to the LHCA give the plaintiff and the intervenor substantial common ground. In all other cases the rule of Haynes applies. And the question of reallocation will never even arise in the majority of cases, where the amount of recovery is sufficient both to reimburse the intervenor and pay the plaintiff’s attorney. But courts must resolve the unusual as well as the ordinary case. On the facts of this case, we hold that the appropriate remedy is to reallocate the recovery in the manner which we have detailed.
The judgment of the district court as to the distribution of the recovery as between Travelers and Chouest is reversed, and the cause remanded with instructions to enter judgment consistent with this opinion.