Multiple Penalties For A Single Act Disallowed

In a previous newsletter we discussed the Court of Appeals decision in Christian v. WCAB. The court had allowed multiple penalties for each missed payment of temporary disability. The Supreme Court has overruled that decision.

The carrier stopped paying temporary disability on the basis of two inadmissible reports. The applicant asked for multiple penalties for each successive missed payment of TD.  The workers’ compensation judge (WCJ) awarded 11 successive penalties for the missed TD payments. The Workers’ Compensation Appeals Board on Petition for Reconsideration reversed the WCJ and found only one penalty.  The Court of Appeal Reversed the Board and found 11 successive penalties.

The Supreme Court reviewed all of the major penalty cases in determining that this case involved only one unreasonable act in cutting off TD, which justified only the imposition of one penalty.

“While we have held that multiple penalties must be applied in some circumstances, those penalties have been approved only when the refusal of, or delay in payment of benefits, necessarily involved separate and distinct acts by the insurance carrier.  Those multiple penalties involved separate classes of benefits….” In Christian it was not a separate class of benefits, but only related to the same class of benefits, TD.

The Court reasoned as follows: “…Until the Board has made an award or another legally significant event occurs which unequivocally establishes the employer’s liability, the employer or carrier may act under a good faith belief that its conduct is justified.  Notice to the employer or carrier from the worker of intent to seek penalties and the employer’s or insurance carrier’s opportunity to reconsider its decision does not create a separate and distinct act for which imposition of penalties is authorized by section 5814 simply because the employer or carrier does not resume benefits on receipt of such notice. If a carrier or employer believes that its conduct is justified, imposing penalties on the theory that each notice gives the insurance carrier the occasion to reconsider the decision to terminate or change the amount of benefits payments would not fairly serve the deterrent purpose of section 5814.  Instead, employers or carriers would be compelled, under the coercive force of those penalties to continue payments to which they believe a worker is not entitled simply because multiple penalties might be assessed if the worker was able to give repeated notice of intent to seek penalties for conduct based on the same decision.”

The case only stands for the proposition that multiple penalties will not be awarded for the same act.  However multiple penalties can still be awarded for separate and distinct acts.

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

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

Newsletter Sign up

Workers Compensation Feed

Recent Newsletters