Multiple Penalties May Result From Non Payment

One of the most significant cases of the year has been decided by an Appellate Court. This decision will definitely affect the way you administer your file. The case may also force you to rethink your position every two weeks in regards to denials The carrier in this case made TTD payments every two weeks based on available medical reports. The carrier. later refused to make 11 payments of TTD, based on later medical reports. The applicant notified the carrier after each refused payment that she would seek a separate penalty for each separate refusal. (This is. important because you will find applicants will now request a penalty after each missed payment on many of your cases.)

The case went to a hearing and the carrier based its denial of payment on the later reports. These reports were found inadmissible. The carrier never challenged the inadmissibility. The WCJ awarded 11 separate penalties, instead of one.

The Court analyzed Section 5814 and the existing case law regarding penalties. The Court indicated that a penalty is both remedial and penal. It was further indicated that the rule of liberal construction mandated successive delays in payment to result in successive penalties. “Multiple penalties must be assessed for successive delays so long as separate and distinct acts of misconduct are involved. Where the circumstances disclose separate and distinct acts of delay or nonpayment, and prior notice was given of the applicant’s intent to seek separate or additional penalties for such acts, then multiple penalties are appropriate in a single penalty proceeding.”

The rationale was that the resulting delay is of little consequence to the carrier, but may be disastrous to the applicant. The applicant may not be able to get medical treatment elsewhere, or be able to afford the basic necessities of life. The Court indicated that each time the carrier denied payment the applicant had notified the carrier qf her objection to the refusal and her intent to seek a separate penalty for each refused payment. The Court stated that this allowed the carrier to reexamine their refusal to pay. Every time the applicant gave notice of her objection this communicated her refusal to acquiesce to the carrier’s refusal to pay.

The Court was aware this decision will greatly increase the cost of workers’ compensation. The rationale is that “short delays or small reductions in payments may have catastrophic consequences to an injured worker.” In this case one penalty would have resulted in a payment of $3,057.60. Eleven penalties resulted in at least $33,633.60.

Please also note another recent penalty case indicated that a penalty on interest that was incorrectly paid would result in a 10 % penalty on the entire class of benefits for which the interest was due.

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