Appeals in New York Workers’ Compensation

Practice Tips

Any final determination of law can be appealed. The requirements for the appeal process in the New York Workers’ Compensation system are found in N.Y. Work. Comp. Law § 23. A party that disagrees with a law judge’s decision under the law can request a review of the decision, if the appeal is timely filed on the proper form within 30 days of the filing of the decision being appealed. Orders of the Chair are not appealable but if a party believes there is an error, a party may request the Board to rescind the Order of the Chair.

Application for Board Review

The first level of appeal is known as an “Application for Board Review.” This appeal is made when a party disagrees with a decision at the hearing level (Notice of Decision or Reserved Decision).

This is an administrative appeal and the appeal is considered by a three member Panel of the Board. The appeal must be filed with the Board within 30 days of the filing date of the decision. The party defending the appeal (respondent) has 30 days to file a rebuttal, from the date the appeal is filed with the Board. 12 NYCRR 300.13(b).

An appeal from an award to the Board operates as a stay of the obligation to make payment for disputed indemnity benefits or medical bills. N.Y. Work. Comp. Law § 25(c).

The Board Panel may affirm the prior decision, modify the prior decision, or reverse the prior decision. The decision by the Board at the initial appeal is known as the Board Panel Decision.

Request for Full Board Review

If a party disagrees with the Board Panel Decision within 30 days of the filing of the Board Panel Decision they may file an additional appeal. This administrative appeal is known as a Request for Full Board Review. If one of the three judges dissented in the Board Panel Decision, then a Full Board Review is mandatory if requested. If there is no dissent, the full Board has discretion to review the case. There is no stay on indemnity/medical benefits while awaiting Full Board Review.

It is important to note, a request for discretionary full Board review does not suspend the running of the time for appeal to the Appellate Division.

Appellate Division

After a final decision has been made by the Workers’ Compensation Board, further review is available in the Appellate Division. There is no stay on indemnity/medical benefits while awaiting a decision in the Appellate Division. An appeal from the Board decision is taken to the Third Department of the Appellate Division. The judges designated to the New York Appellate Division sit in panels of five.

Appeals to the Appellate Division follow a timetable set forth in the court rules. Within 30 days of the Board Panel filing their decision, the party wishing to appeal must file a Notice of Appeal. Then, the parties must work together to “settle the record” – that is, decide which exhibits, medical records, documents, and testimony should be included in the master record list supplied to the Appellate Division. The court rules allow for a 65-day period where other parties to the appeal can object to the record; then the Appellant (party filing the appeal) can apply to the Workers’ Compensation Board to settle the record. In any event, the record must be settled and the appellant’s brief submitted to the Appellate Division within nine months of the Notice of Appeal. Then, the respondent has 30 days to file a rebuttal. The appellant can file a “reply” to the rebuttal within 10 days following receipt of the rebuttal brief. Rules of App Div, 3d Dept [22 NYCRR] § 800.8(c).

N.Y.C.P.L.R. § 5522 empowers the appellate court to “reverse, affirm, or modify, wholly or in part. …” the Board decision. The appellate court may “where necessary or proper, remit to another court for further proceedings.” Otherwise, the appellate court is to make a final determination.

Court of Appeals

Where there is a dissent in the Appellate Division, appeal can be made to New York’s highest court: the Court of Appeals. Otherwise, the Court of Appeals will hear cases only by permission. The timeline for filing a Notice of Appeal to the highest court is 30 days from entry of the decision below (the Appellate Division decision).

 

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Adjuster and Attorney Contact With Claimants In Workers’ Compensation Claims

FAQs Practice Tips

When a claimant has not retained legal counsel, direct communication between the insurance carrier, third party administrator, or self-insured employer with the unrepresented claimant is the only way to gather pertinent information related to the claim. Communication is allowed with unrepresented claimants. But, in order to avoid potential ethical issues, adjusters and defense attorneys should avoid giving the claimant  legal advice, other than advising the person to seek legal representation. [N.Y. Comp. Codes R. & Regs. tit. 22, § 1200.0 Rule 4.3]

Once a claimant retains legal representation; either hiring an attorney or a Licensed Hearing Representative, contact with regard to legal issues related to the claim must be made through claimant’s counsel. It is clear that defense attorneys are prohibited from direct communication with claimants represented by counsel by the Rules of Professional Conduct. However, employees of the insurance carrier, such as adjusters, are also prohibited from direct communication with represented claimants.

Attorneys in New York are governed by the Rules of Professional Conduct which provides in part at 22 NYCRR 1200.0 [Rule 4.2 Communication with person represented by counsel]:

1. (a) In representing a client, a lawyer shall not communicate or cause another to communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the prior consent of the other lawyer or is authorized to do so by law.

2. (b) Notwithstanding the prohibition of paragraph (a), and unless otherwise prohibited by law, a lawyer may cause a client to communicate with a represented person unless the represented person is not legally competent, and may counsel the client with respect to those communications, provided the lawyer gives reasonable advance notice to the represented person’s counsel that such communications will be taking place.

Violation of this professional rule of conduct subjects the attorney to disciplinary action. The Rules of Professional Conduct prohibit not only the attorney from communicating with the represented claimant but also prohibits the attorney from directing another individual to communicate with the claimant, who is known to be represented by counsel.

Any carrier/employer contact regarding settlement must be through legal counsel. Direct contact with a represented claimant regarding settlement is not allowed. In fact, a formal opinion by ‘The Association of the Bar of The City of New York Committee on Professional and Judicial Ethics” opines “sending a letter or email to a represented person, and simultaneously sending a copy of the communication to counsel, is impermissible … unless the represented person’s lawyer has provided prior consent to the communication or the communication is otherwise authorized by law.” [Link]

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NY Workers’ Compensation Amendment Found Unconstitutional; How It Affects Fund for Reopened Cases

Court Decisions In The News

On April 14, 2016, the Appellate Court ruled that retroactive closure of the Fund for Reopened Cases was unconstitutional.

The New York Appellate Division First Department last week addressed the validity and constitutionality of a 2013 amendment to New York Workers’ Compensation Law §25-a.

What is the Fund?
As a background, §25-a provides for a Special Fund to be set up especially to administer and pay claims arising from the reopening of closed cases. The primary purpose of §25-a is to transfer liability for awards from self-insured employers and insurance carriers to the Special Fund where the claim has become “stale.” Under §25-a, claim is “stale” if it meets certain criteria:

  1. more than seven years has elapsed from the date of the injury or death, and;
  2. where more than three years has elapsed after the last payment of compensation.

Essentially, insurance carriers and self-insured employers could potentially shift liability to the Special Fund in claims that met the criteria of §25-a. Whether a case has been officially closed so as to shift liability to the Special Fund is a decision for the Board to make. Upon transfer to the Special Fund, the carrier or self-insured employer is no longer responsible for payment or management of the claim.

The Law was changed in 2013 to close the Fund to new claims.
In an effort to phase out the Special Fund/Fund for Reopened Cases, the Business Relief Act of 2013 created an amendment to §25-a that no application by an employer or insurance carrier to transfer liability to the Fund for Reopened Cases would be accepted by the Board on or after January 1, 2014. In short, the amendment to be addressed in American Economy Ins. Co. v State of New York closed the reopened case fund to newly reopened claims as of January 1, 2014. Following the amendment to §25-a, any claims that were reopened that previously would have transferred to the Fund became the obligation of the carrier, liability would not shift to the Special Fund.

The plaintiffs in American Economy, private insurance companies that underwrite workers’ compensation insurance policies in New York, challenged the validity and constitutionality of the 2013 amendment to Workers’ Compensation Law § 25-a to the extent it imposes liability on them with respect to policies issued before October 1, 2013. The plaintiffs successfully argued the existence of the Special Fund meant that reopened workers’ compensation claims were not included when insurers’ premium rates were calculated by the New York Compensation Insurance Rating Board (CIRB) and approved by the New York State Department of Financial Services (DFS). The plaintiffs also argued that because reopened claims were handled and paid by the Special Fund rather than by insurers, insurers did not maintain reserves to cover future reopened claim losses. The plaintiffs argued that policies written on or after October 1, 2013, DFS approved an increase in premiums to address the additional liability resulting from the closure of the Fund to future reopened cases; however, that premium increase would not cover policies issued before October 1, 2013. Therefore, as a result of the amendment closing the Special Fund, the amendment will impose on the insurer a liability that was not contemplated when the premium for the pre-October 1, 2013 policy was calculated.

The court in American Economy ruled “the central question here is whether closing the Fund to new applications and requiring the insurers to handle and pay on reopened claims arising out of accidents that occurred before October 1, 2013 impermissibly ‘attache[d] new legal consequences to events completed before its enactment.” [Link]

The court ruled the 2013 amendment:

violates the Contract Clause of the US Constitution because it retroactively impairs an existing contractual obligation to provide insurance coverage “[w]here *** the insurer does not have the right to terminate the policy or change the premium rate” (Health Ins. Assn. of Am. v Harnett,44 NY2d 302, 313 [1978] [internal quotation marks omitted] [asterisks in original]; see US Const, art I, § 10, cl 1). Defendants failed to show that the impairment is “reasonable and necessary to serve” “a significant and legitimate public purpose *** such as the remedying of a broad and general social or economic problem” (19th St. Assoc. v State of New York, 79 NY2d 434, 443 [1992] [internal quotation marks omitted] [asterisks in original]). Indeed, the legislation’s stated purpose of preventing a windfall to insurance carriers was based upon the erroneous premise that premiums already cover this new liability.

Retroactive application would also constitute a regulatory taking in violation of the Takings Clause (see US Const Amend V; NY Const, art I, § 7[a]; Eastern Enterprises, 524 US at 528-529 [“it imposes severe retroactive liability on a limited class of parties that could not have anticipated the liability, and the extent of that liability is substantially disproportionate to the parties’ experience”]).

The court ruled “that Workers’ Compensation Law § 25-a(1-a) as retroactively applied to policies issued before October 1, 2013 is unconstitutional.”

Impact of this new decision
As a result, New York workers’ compensation claims that meet the criteria from policy years prior to October 1, 2013 should now be able to apply for relief under §25-a.

Have Questions?
Join me for a live Q & A session, led by Lois LLC attorneys, on Friday April 22, 2016 at 12:00PM EST. To register for the live event (webinar), click here: https://attendee.gotowebinar.com/register/1979996515284456451

Overview of Death Benefits In New York Workers’ Compensation

FAQs Practice Tips

New York workers’ compensation law allows for benefits if a work-related injury causes death under NY WCL §16. A death can be considered work-related if it is due to a specific injury or due to an occupational disease/condition.

The decedent’s surviving spouse, children, parents, or estate may be entitled to death benefits. In addition to indemnity benefits, the carrier/employer is responsible for funeral expenses.The Workers’ Compensation Board sets a schedule for funeral expenses, currently up to $6,000.

If there are no surviving dependents entitled to receive death benefits, N.Y. Work. Comp. Law §16(4-b) provides that the sum of $50,000 must be paid to the surviving parents or if there are no surviving parents, to the decedent’s estate.

The rate of the the death benefit is in general subject to the same statutory minimum and maximum benefit rate as any other wage loss benefit. Death benefits are only due if the death is causally related to work. If an injured worker is collecting either temporary disability benefits or permanency benefits but passes away due to an unrelated illness, death benefits and funeral expenses are not owed.

Generally, the surviving spouse receives benefits for the remainder of their life, expect in situations where they remarry. In situations where the surviving spouse remarries, the spouse receives a lump-sum of two years of benefits [N.Y. Work. Comp. Law § 16(1-b)].

With respect to indemnity benefits, if there is solely a surviving spouse with no minor children and no children who are either blind or physically disabled, the surviving spouse receives 66.667% of the deceased’s average weekly wage up to the statutory maximum rate at the date of death. If there are minor children in addition to the surviving spouse, there is no increase in the overall indemnity benefit, the benefit rate is divided amongst the surviving spouse and all minor children. In situations where there are more than one surviving child;, the surviving spouse receives 36.667% of the weekly benefit rate and the children divide the remaining 30% equally. Surviving children’s benefits will cease once they turn eighteen, or twenty-three years old for full-time students. [N.Y. Work. Comp. Law § 16(2-a)].

Board Announces Changes To Section 32 Settlement Approval Process

Practice Tips WCB Announcements

Beginning March 1, 2016 the Board will no longer require hearings for law judges to review all Section 32 settlement agreements. In a Board bulletin issued this week, the Board announced they will begin utilizing a desk review process under certain circumstances.

According to the announcement:

In cases where the injured worker (other than a minor dependent) is represented by an attorney, desk review will be utilized when only indemnity is settled, or when all parties to the agreement request desk review. This use of desk review will reduce the time it takes to approve a Section 32 Waiver Agreement and allow calendar time to be prioritized for cases with pressing issues. The Board will continue to review other Section 32 Waiver Agreements through the hearing process.

Due to the change in the process, the Board has revised the standard Board forms (C-32 and C-32.1) that must accompany all settlement agreements. The Board has created a new mandatory Board form (C-32-I) for “indemnity only” settlements. Per the announcement, in the future the Board will release another mandatory Board form for all “full and final” settlement agreements. Additionally, the Board has produced a six minute video (embedded below), which the Board now requires injured workers to view before their settlement agreement will be approved by the Board.

A streamlined Proposed Notice of Approval – Section 32 Waiver Agreement (PD-32) has been created that communicates to health care providers the status of medical treatment after the Section 32 Waiver Agreement is binding. It indicates the date on which the Section 32 Waiver Agreement is deemed to have been submitted to the Board and the date on which the Section 32 Waiver Agreement is binding.

It is likely this new process will be welcomed by all. This should result in faster settlement approvals, rather than waiting in excess of 45 days for a settlement hearing to be scheduled. Additionally, this should allow the Board to schedule hearings faster for other matters.