1. CSDA Annual Conference October 2008 1 WORKERS’ COMPENSATION 101 Basics for Child Support Professionals

2. CSDA Annual Conference October 2008 2 Presented by: Steven E. Pesante Kevin O’Keefe CS Attorney III CS Attorney III San Bernardino San Diego County DCSS County DCSS (909) 478-7401 (619) 578-6466 spesante@css.sbcounty.gov kevin.o’keefe@sdcounty.gov

3. CSDA Annual Conference October 2008 3 Today’s Goals: Provide the basic tools to effectively handle WCAB cases & Instruct on how to Get maximum WCAB money

4. CSDA Annual Conference October 2008 4 Course Format Introduction Sections 1-6 Mid-course break [15 min.] Sections 6-11 Questions & Answers

5. CSDA Annual Conference October 2008 5 Section One - OVERVIEW What is Workers’ Compensation? An administrative law-based system designed to compensate California employees for their work- related injuries. It is not fault-based; it relies upon a nexus to the worksite to determine compensation.

6. CSDA Annual Conference October 2008 6 Section One - OVERVIEW WCAB is a more informal setting that has the following organizational structure: Judges Appointed – ALJ Cases are located in the CCC Governed by the Labor Code Forms are located in DWC

7. CSDA Annual Conference October 2008 7 Section One - OVERVIEW Here’s the GOOD NEWS! To be an effective LCSA attorney and collect WCAB monies you need only know a fraction of the overall WCAB system – WCAB wage assignments and WCAB liens.

8. CSDA Annual Conference October 2008 8 Section One - OVERVIEW There are many differences between practice in the WCAB system and the California Superior Court system, including: Casefiles: Are usually available in the courtroom for inspection by the parties, unattended, in the WC system. Minute Orders: Must be completed by the parties prior to hearing indicating each person’s attendance.

9. CSDA Annual Conference October 2008 9 Section One - OVERVIEW Judges: No calendar call or check-in in the WCAB system. Judges are in a side-office and are consulted when the parties reach agreement – or an impasse – on their cases. Judges wear robes only when in actual hearings. WC Judges act often in the role of mediators when attempting to resolve WC cases.

10. CSDA Annual Conference October 2008 10 Section One - OVERVIEW Disposition of cases: “Party-driven”, meaning that the parties meet, determine if settlement of the case-in-chief is possible, refer the case to the WC rater’s office, or otherwise plan the next step in the case They then meet with the WC Judge for approval of their plan or trial setting.

11. CSDA Annual Conference October 2008 11 Section Two – WC SYSTEM IN A NUTSHELL The injured worker is called the “applicant.” An “Application for Adjudication” is filed by the applicant’s attorney and contains basic facts about the case, including the date of injury, rate of pay, occupation and affected body parts injured.

12. CSDA Annual Conference October 2008 12 Section Two – WC SYSTEM IN A NUTSHELL Unrepresented applicants can obtain the assistance of the “Information and Assistance” officer, a Division of Workers’ Compensation employee assigned strictly to assist Pro Pers in the presentation of their claims.

13. CSDA Annual Conference October 2008 13 Section Two – WC SYSTEM IN A NUTSHELL Insurance Attorneys – SCIF Attorneys: Generally understand goals of LCSA and work with each agency to ensure payments are received. Since SCIF – the State Compensation Insurance Fund – handles as much as 1/3 of the WC market in California, it behooves LCSA attorney to have a good relationship with SCIF attorneys.

14. CSDA Annual Conference October 2008 14 Section Two – WC SYSTEM IN A NUTSHELL The insurance company “accepts” or “denies” the claim, based on the nexus to the work environment. On an “accepted claim” the insurer will start paying WC temporary disability benefits to the worker. On a “denied claim” no WC benefits are voluntarily paid by the insurer – there must be an order or trial to force such payments.

15. CSDA Annual Conference October 2008 15 Section Two – WC SYSTEM IN A NUTSHELL Once accepted, the applicant begins receiving: Medical treatment & Temporary Disability payments [aka “TD”]

16. CSDA Annual Conference October 2008 16 Section Two – WC SYSTEM IN A NUTSHELL The local LCSA, based upon previously submitted names of all obligors, receives notice of a pending claim from the CSE System [formerly, third-party vendors such as “CompData”], and opens a WC temporary file.

17. CSDA Annual Conference October 2008 17 Section Two – WC SYSTEM IN A NUTSHELL TWO (2) Actions are taken: The LCSA files a LIEN -- based upon Labor Code Section 4903(e); -- based upon child support owed from date of injury to present. The LCSA issues a Wage Assignment -- based upon CCP 704.160; -- allows up to 25% deduction of Temporary Disability payments.

18. CSDA Annual Conference October 2008 18 Section Two – WC SYSTEM IN A NUTSHELL If/when Doctor finds a worker cannot work in the previous field, status changes to “permanent and stationary” disability: 1. Temporary disability payments cease. 2. Permanent disability payments begin. 3. The LCSA’s wage assignment no longer works to collect permanent disability payments.

19. CSDA Annual Conference October 2008 19 Section Two – WC SYSTEM IN A NUTSHELL Why doesn’t the LCSA’s wage assignment work to collect permanent disability payments? Answer: There is no statutory authority similar to CCP 704.160 which authorizes deductions for permanent disability payments. Solution: The LCSA may file a “Declaration of Readiness” (DOR) for an order authorizing payments from permanent disability payments since the case diminishes in value with each monthly payment.

20. CSDA Annual Conference October 2008 20 Section Two – WC SYSTEM IN A NUTSHELL Your LCSA received money from a wage assignment and the WC case-in-chief just resolved by agreement or trial... Are you Done Yet? NO! Lots of stuff can still go wrong to prevent being paid on the lien.

21. CSDA Annual Conference October 2008 21 Section Two – WC SYSTEM IN A NUTSHELL All of these things can still go wrong: -- Lien omitted from settlement; -- Wrong lien amount used by parties; -- Lien is paid directly to applicant; -- Lien paid to wrong DCSS; -- Lien payment ordered by WC Judge is unreasonably low. [Section Nine, “Post-Settlement Problems]

22. CSDA Annual Conference October 2008 22 Section Three – Unit Organization Examples of Organization in Large County LCSAs San Bernardino County is staffed by: Child Support Attorney – Unit Coordinator Two (2) Child Support Officers Child Support Assistant / Clerk III San Diego County is staffed by: Child Support Attorney – Unit Coordinator Two (2) Paralegals Three (3) Student Workers

23. CSDA Annual Conference October 2008 23 Section Three – Unit Organization To the extent possible, the staff members of the WCAB Unit are cross-trained in the duties of each other so as to eliminate the undue disruption of the WCAB unit due to illness, vacation, training, et cetera. The Child Support Attorney functions as the WCAB Unit Coordinator.

24. CSDA Annual Conference October 2008 24 Section Three – Unit Organization The Child Support Attorney reviews the files, consults the WC Master Calendar, determines which hearings to appear at, makes the court appearances or assigns “Hearing Representatives” to do so, and files any needed WCAB motions or responsive pleadings.

25. CSDA Annual Conference October 2008 25 Section Three – Unit Organization The Child Support Officers or Paralegals research, prepare and file child support liens, issue wage assignments, check for updates on existing liens, prepare a weekly Master Calendar of WCAB appearances with recommendations on which ones to appear, answer telephone inquiries on liens, negotiate liens and serve as WC “Hearing Representatives”.

26. CSDA Annual Conference October 2008 26 Section Three – Unit Organization The Child Support Assistant / Clerk III handles mail, makes temporary WCAB litigation files for court appearances, and fills in as necessary for absent Child Support Officers. The Student Workers handle mail, makes temporary WCAB litigation files for court appearances, calculate affidavits of itemized billings, contact insurers and employers for case status and information, answer phones, send “no show” letters and review files for payment status.

27. CSDA Annual Conference October 2008 27 Section Three – Unit Organization Smaller County LCSAs -- Minimum requirements – At a bare minimum each LCSA needs a WC Attorney to coordinate the unified approach to hearings among your attorneys, and one staff member available to WC litigants by telephone to negotiate liens, answer lien balance inquiries and prepare liens and wage assignments.

28. CSDA Annual Conference October 2008 28 Section Three – Unit Organization WCAB Weekly “Master Calendar” -- Date and Time of Hearing -- Name of Applicant -- WCAB Board location -- Type of hearing -- WC Judge -- Lien Amount -- Date of Last Lien Update -- Recommendation on which hearing to attend

29. CSDA Annual Conference October 2008 29 Section Three – Unit Organization What exactly is a “Hearing Representative”? Hearing Representatives are trained non attorneys who negotiate liens at Board appearances. Hearing Representatives are specifically permitted by the WC System and must carry LCSA authorization letters. Hearing Representatives negotiate financial issues, only – never legal issues.

30. CSDA Annual Conference October 2008 30 Section Three – Unit Organization If legal issues arise during a hearing, the Hearing Representatives requests that a lien hearing be set. Hearing Representatives are supervised by the WCAB Child Support Attorney at all times – and are available by telephone for consultation, as needed.

31. CSDA Annual Conference October 2008 31 Section Four – Lien Creation and Wage Assignments Labor Code Section 4903(3) authorizes LCSA liens for: “The reasonable living expenses of the spouse or minor children of the injured worker, or both, subsequent to the date of injury, where the employee has deserted or is neglecting his or her family”. Therefore, in a TANF case, you can file a lien pre- judgment as well.

32. CSDA Annual Conference October 2008 32 Section Four – Lien Creation and Wage Assignments New WC filings are identified from a list of obligors submitted to the DWC and sent to the LSCAs. WCAB staff members check this list against known obligors to see if a lien needs to be filed. The WC unit member will determine if there are child support or spousal support orders in effect for any period after the date of injury through the present. If so, a lien can be filed.

33. CSDA Annual Conference October 2008 33 Section Four – Lien Creation and Wage Assignments The lien packet includes: -- Green sheet lien -- Interest calculation [DOI – present] -- Copy of the Superior Court orders -- Declaration of Child Support Attorney -- Supporting Points & Authorities

34. CSDA Annual Conference October 2008 34 Section Four – Lien Creation and Wage Assignments The WC Unit staff will prepare a calculation of the lien based upon the period from the date of injury through the present. This so-called “opening lien” can be quite modest, but is subject to frequent updates [i.e., “amended liens”] over the course of the WCAB case-in-chief, prior to resolution. Liens should always be updated prior to any WC appearance.

35. CSDA Annual Conference October 2008 35 Section Four – Lien Creation and Wage Assignments The WC Unit staff then mails the original lien packet [i.e., “hard copy”] to the appropriate clerk’s office of the WC Board facility, and copies of the lien packet to all WCAB parties identified on the summary sheet.

36. CSDA Annual Conference October 2008 36 Section Four – Lien Creation and Wage Assignments Withdraw liens promptly if the underlying Superior court order is successfully attacked, or the DCSS child support and/or spousal arrears balances are paid in full. Keep the lien in place if the case becomes “current” – that could easily change.

37. CSDA Annual Conference October 2008 37 Section Four – Lien Creation and Wage Assignments DWC program instituted a new program as of August 25, 2008 called the Electronic Adjudication Management System or EAMS”. It eliminates the electronic filing of LCSA liens – a major step backwards! It will now be necessary to request a conformed copy of the lien packet face sheet be mailed back to the local LCSA after each and every lien filing to ensure that proof of filing is in the possession of the LCSA.

38. CSDA Annual Conference October 2008 38 Section Four – Lien Creation and Wage Assignments Wage Assignments can deduct up to 25% of the temporary disability payment pursuant to CCP 704.160. Such payments are “free” money, not charged against the final WC settlement credits to the insurer for such payments, but need to be credited in any amended liens.

39. CSDA Annual Conference October 2008 39 Section Five – Types of WC Benefits For LCSA purposes, there are four (4) types of WC benefit payments made to applicants during a WCAB action: -- Temporary Disability -- Permanent Disability -- Retroactive Temporary Disability -- Vocational Rehabilitation

40. CSDA Annual Conference October 2008 40 Section Five – Types of WC Benefits Major Benefits: Temporary Disability [or “TD”] Paid to the worker from the injury date through the date the medical provider declares the injured worker “permanent and stationary”. Determined by the worker’s pay rate, occupation and other factors – can be paid for a maximum of two years – 104 weeks. Not charged against the final WC settlement. CCP 704.160 allows for a wage assignment against TD benefits.

41. CSDA Annual Conference October 2008 41 Section Five – Types of WC Benefits Major Benefits: Permanent Disability [or “PD”] Paid to the worker from the date the medical provider finds him or her “permanent and stationary”. This is considered an advance against the final WC settlement and the insurer is entitled to a credit. Wage Assignments do not work against PD benefits absent a specific order from the WC judge ordering them.

42. CSDA Annual Conference October 2008 42 Section Five – Types of WC Benefits Minor benefits: Retroactive Temporary Disability [or “Retro TD”] Paid in lump-sum to the applicant when the insurer failed to correctly pay the applicant required temporary disability payments anytime from the date of injury through permanent and stationary. A typical example would be a denied claim later found to have merit. LCSA is entitled to 25% of these benefits.

43. CSDA Annual Conference October 2008 43 Section Five – Types of WC Benefits Minor benefits: Vocational Rehabilitation [or “VR”] Increasingly rare, these are benefits paid for injuries occurring prior to 2004. They are paid to re-train the work into another job and pay living expenses. Generally “off-limits” to LCSA deductions. Not charged against the final WC settlement.

44. CSDA Annual Conference October 2008 44 Section Six – Filing for Permanent Disability Orders Filing a DOR for apportionment of permanent disability is necessary because there is NO statutory authority such as CCP 704.160 to authorize deductions from permanent disability orders. This type of order is granted approximately 50% of the time by WC judges.

45. CSDA Annual Conference October 2008 45 Section Six – Filing for Permanent Disability Orders A major problem in getting the order granted: Board clerks will not schedule a lien hearing until the WC case-in-chief is resolved, and they mistakenly think the hearing is about the lien – not an interim order. The LCSA receives a hearing “rejection” notice.

46. CSDA Annual Conference October 2008 46 Section Six – Filing for Permanent Disability Orders Even if the case is set for a hearing, the WC Judge may balk at signing an order granting PD benefit deductions upon the basis that the case-in-chief is close to settlement, or there is no statutory authority to deduct such monies.

47. CSDA Annual Conference October 2008 47 Section Six – Filing for Permanent Disability Orders Be creative – show the necessity of the money to the custodial parent and minor children, and the consequences of delayed compensation. Attach a payment history showing long periods of non- payment by the obligor. Mention that the case is “bleeding out”.

48. CSDA Annual Conference October 2008 48 Section Seven – Handling WC Hearings No responsive pleadings need to be filed prior to a hearing, except perhaps for a lien trial where briefs were ordered exchanged on a lien dispute. Update the lien by filing an “amended lien” prior to the hearing.

49. CSDA Annual Conference October 2008 49 Section Seven – Handling WC Hearings Appearances at WC Hearings can be characterized as falling into three categories: -- Mandatory appearances -- Recommended appearances -- Non-required appearances

50. CSDA Annual Conference October 2008 50 Section Seven – Handling WC Hearings Mandatory Appearances – [Required] -- Lien Conferences or Lien Trials -- Hearings where the WC Judge ordered the LCSA to appear -- DOR hearings filed by the LCSA -- Petitions for Reconsideration hearings, filed by the LCSA

51. CSDA Annual Conference October 2008 51 Section Seven – Handling WC Hearings Generally, mandatory appearances should be handled by the WC Unit Attorney, due to the likelihood of legal issues being presented. If you fail to appear at a mandatory hearing and you do not have a substitute representative present, the issue will very likely be resolved against your LCSA.

52. CSDA Annual Conference October 2008 52 Section Seven – Handling WC Hearings If the hearing is at a remote Board facility, you can request the local LCSA to make the WC appearance for you or you can send the board a “non- appearance” letter and indicate you are available to appear by telephone. Give ample notice, and prepare all the pleadings needed, along with a fully stocked temporary file, and a summary sheet showing the context of the action.

53. CSDA Annual Conference October 2008 53 Section Seven – Handling WC Hearings Recommended Appearances – [discretionary] -- Trials, if the lien amounts exceeds $5k -- Mandatory Settlement conferences, where the lien exceeds $10k -- Several hearings set at the same courthouse, to maximize LCSA efficiency -- Litigants indicate settlement likely, and need our appearance

54. CSDA Annual Conference October 2008 54 Section Seven – Handling WC Hearings Non-Required Appearances Any hearing not mandatory or recommended is “non- required”. These usually involve modest lien balances or geographically far-away Board locations. California Code of Regulations Section 10563 states that lien claimants do not need to be physically present at a mandatory settlement conference or trial so long as they are available by telephone.

55. CSDA Annual Conference October 2008 55 Section Seven – Handling WC Hearings Before the WC Hearing: Child Support Officers or Attorney should telephone the WC litigants to determine likelihood of the hearing taking place, issues, possibility of settlement, case value, and necessity of the DCSS’ appearance at the hearing or trial.

56. CSDA Annual Conference October 2008 56 Section Seven – Handling WC Hearings Before the WC Hearing: Take your temporary file: -- Three (3) copies of the most recent lien [Board may not have a copy in file] -- CSE payment history -- CSE notes

57. CSDA Annual Conference October 2008 57 Section Seven – Handling WC Hearings Attending the WC Hearing: -- Show up early – 15 or 20 minutes early -- Check the docket sheet in clerk’s office [8:30 a.m. / 1:30 p.m. calendars] -- Name of applicant might be different – check by WCAB Case Number

58. CSDA Annual Conference October 2008 58 Section Seven – Handling WC Hearings Attending the WC Hearing: -- If the hearing cannot be located on the docket sheet, check with the clerk’s office or with the judge’s secretary... the matter might have been resolved by the parties and taken “OTOC” or “ordered to off calendar”.

59. CSDA Annual Conference October 2008 59 Section Seven – Handling WC Hearings Attending the WC Hearing: -- Go to the courtroom, locate the file -- Sign the “minute order” sheet, on the “Others appearing” line -- Place the file in a highly visible location and wait for other WC litigants to arrive

60. CSDA Annual Conference October 2008 60 Section Seven – Handling WC Hearings Attending the WC Hearing: -- If your file is not in the courtroom – and all the other assigned case files are – check with the Judge’s secretary. The parties might already have the file, or have referred it to the DWC Rater’s office, or it might have been disposed in some way.

61. CSDA Annual Conference October 2008 61 Section Seven – Handling WC Hearings Attending the WC Hearing: -- Rule of thumb... If the neither the applicant’s attorney or defense counsel appears within about 30-40 minutes past the hearing start time, start calling their offices. It is possible they are elsewhere in the same courthouse … or a problem exists.

62. CSDA Annual Conference October 2008 62 Section Seven – Handling WC Hearings Attending the WC Hearing: Prior to hearing: review -- Whether medical records show whether any prior injuries have been “apportioned”. -- If no DCSS recent lien is in the file, ask permission of the judge to file a conformed copy, by stamping it at the clerk’s office.

63. CSDA Annual Conference October 2008 63 Section Seven – Handling WC Hearings Attending the WC Hearing: Find out: -- Is this an “accepted” or “denied” case? -- If “accepted”, what type of benefits are currently being paid, if any? -- Has the applicant been declared “permanent and stationary” by the worker’s primary medical provider?

64. CSDA Annual Conference October 2008 64 Section Seven – Handling WC Hearings Attending the WC Hearing: -- Are the parties close to settlement? Are there offers and counter-offers? -- What percentage of disability have the WC parties “self-rated” the applicant’s injuries? -- Has A DWC Rater assigned a percentage of disability? If so, what amount?

65. CSDA Annual Conference October 2008 65 Section Seven – Handling WC Hearings Attending the WC Hearing: -- If the case settles, what type of settlement format will be used... Compromise & Release Agreement [lump-sum pay-out] or Stipulation and Request for Award [long-term periodic payments]? -- Make sure DCSS is included in the settlement provisions and that payment comes directly from the insurer, from the applicant’s share, to ensure payment to DCSS through SDU.

66. CSDA Annual Conference October 2008 66 Section Seven – Handling WC Hearings Attending the WC Hearing: Matters not resolved can be continued, taken off- calendar [“OTOC”] or set for trial. If set for trial, the parties will draft a document called a Pre-Trial Conference Statement, also known as “Stips & Issues”.

67. CSDA Annual Conference October 2008 67 Section Seven – Handling WC Hearings Attending the WC Hearing: If no settlement on the court date: -- DCSS fills out a portion of the “Stips and Issues” identifying the child support lien amount, the DCSS representative to appear at trial, and any documents and/or witnesses DCSS will bring to trial. The lien packet is usually sufficient.

68. CSDA Annual Conference October 2008 68 Section Eight – Resolving Liens There are several types of liens in a WC action: -- Child support - LC 4903(e) -- Medical expenses -- Legal [prior counsel] -- Employment Development Dept. [aka “EDD”]

69. CSDA Annual Conference October 2008 69 Section Eight – Resolving Liens Liens are paid from different sources. Medical liens and EDD liens are paid by the insurer, apart from the settlement monies. They are usually compromised. DCSS and legal liens are paid from the applicant’s share of the settlement and should be made through the SDU (Tax ID #68-0446735).

70. CSDA Annual Conference October 2008 70 Section Eight – Resolving Liens California Code of Regulations Section 10888 Requires that WC litigants must make a good faith effort to resolve the outstanding liens before the WC case-in-chief can be resolved.

71. CSDA Annual Conference October 2008 71 Section Eight – Resolving Liens Lien Resolution – What to Ask for? “Standardized Lien Resolution Protocol” Establish guidelines on what to ask for and use the same method each and every time to resolve child support liens. The amount you ask for on a lien is directly tied to how much money is available on the case.

72. CSDA Annual Conference October 2008 72 Section Eight – Resolving Liens Do not make any promises to the WC litigants about how much you are willing to take until you have the full facts about the case settlement. Most importantly, you need to determine how much money the applicant is actually going to receive as their share of the settlement. This is called the “Net” award. The DCSS lien is paid from the “Net” award.

73. CSDA Annual Conference October 2008 73 Section Eight – Resolving Liens Determining the “net” award: Determine “GROSS” Settlement amount Deduct Attorney fees (15%) Deduct Permanent Disability advances Deduct Temporary Disability overpayments ______________________ “NET” Award to the applicant

74. CSDA Annual Conference October 2008 74 Section Eight – Resolving Liens The San Bernardino/San Diego Protocol Once the “Net” award is determined... Split it in half – 50%-50% Then, compare the DCSS lien amount to 50% of the “net” award... If Lien is less, demand FULL PAYMENT. If lien is more, SPLIT the “net” award 50-50.

75. CSDA Annual Conference October 2008 75 Section Eight – Resolving Liens Example “A” $16,000.00 is the “Gross” settlement - 2,400.00 is deducted for Attorney fees [15%] - 3,700.00 is deducted for Permanent Disability advances [PDAs] - 1,000.00 is deducted for Temporary Disability overpayments. ___________________ $ 8,900.00 is the “Net” Settlement. The DCSS lien is $3,234.00 The “Net” settlement split 50%-50% = $4,450.00 each Compare $4,450.00 to the lien amount - $3,234.00 [Lien is less] DCSS Demand: Full amount of the lien since the applicant will still take home more than our lien.

76. CSDA Annual Conference October 2008 76 Section Eight – Resolving Liens Example “B” $10,000.00 is the “Gross” settlement - 1,500.00 is deducted for attorney fees [15%] - 0.00 No Permanent Disability advances [PDAs] - 0.00 No Temporary Disability overpayments ____________ $ 8,500.00 is the “Net” settlement. DCSS lien is $8,906.00. The “Net” settlement split 50%-50% = $4,250.00 each. Compare $4,250.00 to the lien amount - $8,906.00 [Lien is more] DCSS Demand: Split the “net” award 50-50% with DCSS. DCSS and the applicant will both receive $4,250.00.

77. CSDA Annual Conference October 2008 77 Section Eight – Resolving Liens How to Handle the Biggest Mistake Made By Litigants in WC Hearings “Hey, Child Support Attorney – The law says you can’t take more than 25% of the settlement for your lien!” [There are several variations of this]

78. CSDA Annual Conference October 2008 78 Section Eight – Resolving Liens This completely wrong assertion comes from confusing the two WC related statutes: Code of Civil Procedure Section 704.160 [Wage Assignments] & Labor Code Section 4903(e) [Child Support Liens]

79. CSDA Annual Conference October 2008 79 Section Eight – Resolving Liens CCP Section 704.160 has a 25% cap on deductions that can be made by wage assignments from TD benefits. Labor Code Section 4903(e) gives the WC judge complete discretion on what to award on child support liens. If you cannot convince the mistake-maker, request a lien conference.

80. CSDA Annual Conference October 2008 80 Section Eight – Resolving Liens Lien Conference This hearing is set specifically on your lien. The conference often has the effect of producing a quick settlement after a short discussion with the applicant. If the matter does not resolve itself at the Lien Conference, the WC Judge will set it for full-fledged Lien Trial. Lien Trials usually require testimony from DCSS staff to support the lien claim. Issues can include the amount of the lien or whether the insurer’s actions regarding payment of the claim were responsible.

81. CSDA Annual Conference October 2008 81 Section Eight – Resolving Liens Types of WC Case Resolutions Settlements -- Compromise & Release Agreement -- Stipulation and Request for Award Trial Result -- Findings and Award

82. CSDA Annual Conference October 2008 82 Section Eight – Resolving Liens Compromise & Release Agreement [aka “C & R”] -- stipulation between parties -- produces lump-sum award -- applicant forfeits future medical -- LCSA lien paid in lump-sum -- payments made through SDU -- most popular settlement type

83. CSDA Annual Conference October 2008 83 Section Eight – Resolving Liens Stipulation with Request for Award [aka “Stip/Award”] -- stipulation between parties -- produces periodic payments -- applicant gets future medical -- LCSA lien paid in payments over long period of time, unless “commuted” -- payments made through SDU

84. CSDA Annual Conference October 2008 84 Section Eight – Resolving Liens Findings & Award [aka “F & A”] -- follows WC trial, only -- produces periodic payments -- applicant gets future medical -- LCSA lien paid in payments, over long period of time, unless “commuted” -- payments made through SDU

85. CSDA Annual Conference October 2008 85 Section Nine – Post-Settlement Problems You filed the Lien. You issued the Wage Assignment. You updated the lien, as necessary. You attended the hearings. You participated in settlement discussions. Your lien was included in the settlement. Then, Where’s Our Money?????

86. CSDA Annual Conference October 2008 86 Section Nine – Post-Settlement Problems Unfortunately, things can still go wrong: 1. The incorrect lien amount is paid. 2. All money is paid to the applicant. 3. The lien is omitted from settlement. 4. No compensation is available for the LCSA lien.

87. CSDA Annual Conference October 2008 87 Section Nine – Post-Settlement Problems 1. The incorrect lien amount is paid: Most commonly happens when the parties rely upon an outdated lien. Or, when the parties settle their case-in-chief between hearings, giving no opportunity for the LCSA to update their lien... And fail to call the LCSA to update the lien balance.

88. CSDA Annual Conference October 2008 88 Section Nine – Post-Settlement Problems Remember – the parties are required by CCR Section 10888 to contact the LCSA before settling their case-in-chief. Remedy: File a Declaration of Readiness to set a hearing. WC Judges have “continuing jurisdiction” over their decisions pursuant to Labor Code Section 5803.

89. CSDA Annual Conference October 2008 89 Section Nine – Post-Settlement Problems 2. All the money is paid to the applicant: This is a true disaster since all of your hard work goes for nothing if the applicant winds up with all the money – and a request to pay DCSS. Remember – you want the settlement provision to state the DCSS lien will be paid directly from the insurer, from the applicant’s share of the settlement. Remedy: Two possibilities – if the lien was mentioned in the settlement, file a DOR. If not, file a Petition for Reconsideration.

90. CSDA Annual Conference October 2008 90 Section Nine – Post-Settlement Problems Petitions for Reconsideration: -- Controlled by Labor Code Section 5900. -- Must be filed within 20 days of receipt of the ruling, settlement or order. -- Must be by verified pleading.

91. CSDA Annual Conference October 2008 91 Section Nine – Post-Settlement Problems Petitions for Reconsideration [contd.] The WCAB Reconsideration Unit in San Francisco, California sitting as the Workers’ Compensation Appeals Board reviews the Petition for Reconsideration, the trial judges Report and makes its own findings.

92. CSDA Annual Conference October 2008 92 Section Nine – Post-Settlement Problems Petitions for Reconsideration [contd.] These findings are called an “Opinion and Order Granting (or Denying) Reconsideration and Decision After Reconsideration. It can include directions to the trial Judge for re-hearings, as needed.

93. CSDA Annual Conference October 2008 93 Section Nine – Post-Settlement Problems 3. The lien is completed omitted from the settlement: Complete omission is infrequent, but it does happen. The likeliest reason is a failure of the Board file to contain our DCSS lien and the WC parties to carefully check their own personal files. The DCSS lien should be in all these places because we mailed them to all these places.

94. CSDA Annual Conference October 2008 94 Section Nine – Post-Settlement Problems Remedy: File a Petition for Reconsideration, due to the magnitude of the error. If the settlement was recently issued [i.e., within the past 10-15 days] it is prudent to immediately telephone the insurer and demand that the amount of the disputed lien be kept in reserve pending litigation on this issue. Follow up in writing.

95. CSDA Annual Conference October 2008 95 Section Nine – Post-Settlement Problems 4. No compensation is available to pay the lien: This happens when Permanent Disability Advances [PDAs] are paid to the applicant and exhaust the available compensation prior to the resolution of the case-in-chief. This is also called a “dry case” or “bleeding out”.

96. CSDA Annual Conference October 2008 96 Section Nine – Post-Settlement Problems Remember: Insurers are obligated by the decisions in Waldrum vs. Jaeger (1939) 4 Cal.Comp. Cases 200 and Truck Insurance Exchange vs. WCAB (1997) 62 Cal. Comp.Cases 240 to withhold sufficient monetary reserves to cover payment of the child support lien until the WC Judge acts on it. Remedy: File a Petition for Reconsideration.

97. CSDA Annual Conference October 2008 97 Section Nine – Post-Settlement Problems Use of Sanctions in DORs & Petitions for Reconsideration Pick the right statute, and use sparingly. Situations involving sanctions are rare, and while they should always be filed in good faith, they represent a bargaining chip to use against the insurer or applicant’s attorney in exchange for getting the DCSS lien paid – our ultimate goal.

98. CSDA Annual Conference October 2008 98 Section Nine – Post-Settlement Problems Labor Code Section 5813 [“bad faith”]: Very difficult to prove this type of sanctions since the injured party must show that the “sole reason” for the bad behavior was to “cause unnecessary delay”. You have to show the mindset of the other party. As long as there is any other reasonable basis, however slight, you will not establish the right to these sanctions.

99. CSDA Annual Conference October 2008 99 Section Nine – Post-Settlement Problems Labor Code Section 5814 [25% -10%]: Section (a): 25% of the total settlement – up to $10,000.00 - can be court-ordered as a sanction for delayed payments. Section (b): 10% of the total settlement can be “self- imposed” as a sanction by the insurer, as a way to avoid the 25% sanction, but only if the insurer files first.

100. CSDA Annual Conference October 2008 100 Section Ten – New Developments The CSE Forms Dilemma: The only WC forms on CSE are the basic Lien packet. No Declaration of Readiness form. No Petition for Reconsideration form.

101. CSDA Annual Conference October 2008 101 Section Ten – New Developments You must file DORs and Petitions for Reconsideration outside the system! CSE committees are working on this problem. We expect in the near future to have both WC documents – and more – on the CSE system for you to use.

102. CSDA Annual Conference October 2008 102 Section Ten – New Developments The NEW EAMS System: “Electronic Adjudication Management System” Beginning August 25, 2008 the DWC will no longer accept electronic filings, such as liens, until the entire system is implemented.

103. CSDA Annual Conference October 2008 103 Section Ten – New Developments -- Filing of liens will have to be done by mail or by personal delivery. -- DWC website will be the sole source for any forms to be used – not third-party vendors, such as “CompData” or “EDEXIS”.

104. CSDA Annual Conference October 2008 104 Section Ten – New Developments -- No information on WC cases, such as related case histories, lien summaries, party information, will be available from these third-party vendors. -- Eventually, all filings will be done electronically and information will be made available through this system on WC cases.

105. CSDA Annual Conference October 2008 105 Section Ten – New Developments Since there is a federal requirement concerning exclusive use of the CSE system to create CSS documents and now a WC mandate to create WC document exclusively on their DWC website, how do we satisfy both requirements?