Litigation Costs Not Ordered Despite PA Claim Petition Being Granted

Ordinarily in a Pennsylvania workers’ compensation case, litigation costs incurred by an injured worker (or his or her lawyer) are reimbursed by the PA workers’ comp insurance carrier if the injured worker was successful “in whole or in part.” This is a very important concept; if claimant attorneys cannot get their litigation costs reimbursed, some meritorious workers’ comp cases will be declined, as the attorneys will not be able to afford litigating them.

A recent decision by the Commonwealth Court of Pennsylvania, Reyes v. Workers’ Compensation Appeal Board (WCAB), limits the injured worker’s attorney in recovering costs, despite being successful on a Claim Petition, at least in part.

In Reyes, the claimant was injured in a work-related motor vehicle accident. A Notice of Denial (NCD) was issued, which acknowledged the injury, but denied disability. The injured worker filed a Claim Petition. The Workers’ Compensation Judge (WCJ) granted the Claim Petition for a closed period of time, finding that the work injury fully resolved on the date on the Independent Medical Examination (IME). The WCJ denied an award of wage loss benefits, finding that claimant failed to prove he was ever disabled from work. Finally, the WCJ denied an award of litigation costs, saying that the claimant was not successful at all.

On appeal, both the WCAB and the Commonwealth Court agreed with the WCJ, and denied wage loss benefits to claimant and litigation costs to the attorney. Despite the fact that the workers’ comp insurance company issued a Notice of Denial, and the attorney for the workers’ comp insurance carrier filed an Answer to the Claim Petition denying all allegations, the Court found the issue to be decided by the WCJ to just involve the wage loss benefits. The workers’ comp insurance carrier acknowledged the injury and in the litigation was only disputing the wage loss benefits, the Court said. Since the injured worker was not successful on this issue, the litigation costs were properly denied.

As a practical issue, as attorneys representing injured workers in PA, we found this decision very disturbing. Essentially, the Court is finding a Notice of Denial to be a proper way for a workers’ comp insurance carrier to accept a medical claim. Silly us, we thought that was the entire purpose for the “medical only” Notice of Compensation Payable (which, by the way, was introduced by the Pennsylvania Bureau of Workers’ Compensation at the request of the PA insurance industry).

In reality, many of our clients have difficulty getting medical treatment if a claim is “accepted” by a Notice of Denial. Medical providers who are limited to the usual and customary English language (and are not fluent in Legalese) may not understand that “Denial” in this sense means exactly the opposite of what the dictionary suggests the word means. Also, too, is the question of what happens once the three-year Statute of Limitations expires. A Notice of Denial, is, by definition, a “denial” of the claim, despite what is written on the document. Is the medical aspect of the claim open at that point or not?

Frankly, use of the NCD to accept a claim is just plain wrong and should be eliminated. Since the Courts seem unwilling to do so, it may be time for the Pennsylvania legislature to step forward on the issue.