Supreme Court Reviews One Week Delay For Penalty

The California Supreme Court has reviewed a claim for a penalty under Labor Code section 5814 and indicated there was no penalty for a one week delay due to a clerical error.

State Compensation Insurance Fund was issuing temporary, disability checks to the applicant. The adjuster handling the case went on vacation. While the adjuster was gone, another adjuster covering the adjuster’s mail inadvertently changed the applicants mailing address instead of the applicant’s attorney’s firm address Therefore, the applicant’s temporary disability check went to the attorneys office causing a one week delay in receiving the temporary disability check to the applicant. The workers’ compensation judge awarded a 10 per cent penalty for unreasonable delay.

The Appeals Board upheld the WCJ.  The Court of Appeal issued a writ and found the one week delay was unreasonable.

The Supreme Court reviewed Kampner v. WCAB and disagreed with the WCJ, The Appeals Board, and the Appeals Court who had differentiated the case with the present case.

The court stated “ Thus, irrespective of whether the delay in Kampner was 26 days (as SCIF argues) or only as little as 1 day (as the WCJ opined) Kampner held a short delaying payment, occasioned by the realities of the business of processing claims for benefits, is not unreasonable.” “The Kampner court recognized that a short delay caused by the realities of business cannot, standing alone, be unreasonable.” “Of course, the length of the delay, as well as the size of the late payment, should be considered by the Board when addressing reasonableness of the delay. In addition, although a short delay caused by business realities may be reasonable, the Board may consider other factors, such as whether the employer or workers’ compensation insurance carrier is adequately staffed for the anticipated workload.” The Supreme Court distinguished the Kerley case, saying that case was a case where benefits were intentionally delayed. The present case dealt with a clerical error and there was no intentional delay. The Supreme Court also indicated that to the extent Jensen v. WCAB suggests an inadvertent delay is unreasonable, it is disapproved.

This was a 5 to 2 decision. There was a dissent by Justice Mosk. He indicated that while a one week delay may seem of little consequence, it may be significant to an applicant who has to pay rent, medical, or food bills to properly survive.

These penalty issues will be reviewed on a case by case basis. The court will look to see if there is a clerical error.  The court will analyze the business realities of the delay. The amount of time involved will be decided on a case by case basis. A factor will also be the size of the amount delayed.

Case: SCIF V. W.C.A.B. (Stuart)

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

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