Medicals Included in S & W

An appellate court has determined that when you calculate an award in favor of an employee for Serious and Willful Misconduct medical treatment will be included. Many practitioners believed this was not included in the term compensation.

Ferguson v W.C.A.B. (Raley’s) will become a significant case for the employer and the examiner under the Employer’s Bill of Rights. Serious and Willful Conduct cannot be insured against. However, what the adjuster does in handling the main issues can determine the ultimate effect of damages in the S & W litigation.  In this case, the WCJ awarded S & W benefits on total compensation including all non-indemnity payments.  This meant that the award encompassed not only temporary disability, permanent disability, and vocational rehabilitation benefits, but also medical treatment. The employer is assessed a 50% increase on the total of all those benefits.

The court analyzed Labor Code Section 4553. It determined that the broad language of the statute left no doubt that the term “compensation” in the labor code included vocational rehabilitation costs, medical treatment and medical-legal fees.  The court then analyzed whether the award as they now interpreted it, increased the award in such a manner that it necessarily exceeded the constitutional limit. They stated to determine this you would perform a test. You would need to determine “.., on the basis of all compensation received by the injured worker, including indemnity as well as non-indemnity benefits,”… whether the injured worker is receiving more than is necessary to fully compensate the worker for all damages he or she sustained as a result of the injury caused.

The court went on to state that should the employer wish to litigate this issue, the Board would have to adjudicate the question in much the way you would a third party credit or employer negligence action. Which means you would be presenting a civil type of trial before the WCJ. The Court specifically stated that “In this latter context, general tort law, not worker’s compensation law, defines the substantive law concerning recovery in a civil action.”

Therefore, the adjuster needs to take heed when providing all benefits in an S&W case because of the potential for fixing liability for the employer. It now becomes incumbent to have an attorney representing the carrier at the outset on these cases.

The Dissent raises several relevant points. It states the injured employee in a S&W now has the functional equivalent of a tort action. It also raises the issue that the same approach can be used for an S & W by the employee, thus reducing any award by 50%, including non-indemnity payments.

With significant medicals, this could result in the injured worker receiving no permanent disability. When an employee alleges a S & W one should determine as a matter of course whether the employee engaged in S & W Misconduct.

Case: Ferguson V. W.C.A.B.

Harvey Brown
3501 Jamboree Rd. Suite 602
Newport Beach, CA 92660

Newsletter Sign up

Workers Compensation Feed

Recent Newsletters