Labor Code §4607 provides that if a party initiates an action to terminate a WCAB award for continuing medical treatment and loses, the WCAB may make the losing defendant pay the winning applicant’s reasonable attorney fees for resisting the termination proceeding.  The reasonable fee is determined by the time involved multiplied by an hourly rate and rather than a percentage of the benefit.

But what about a situation where an applicant asked for a certain type of medical treatment and it is disputed by the carrier.  Later that treatment is determined to be  reasonable and necessary, can the applicant get reasonable hourly attorney’s fees?

First the WCAB said no, but the Court of Appeal said yes.   The California Supreme Court granted review to look at the issue.  Meanwhile applicant attorneys lined up to challenge every post Award medical treatment dispute with the threat of the hourly attorney fee burden.

On May 11, 2009, the California Supreme Court in the case of Smith & Amar v WCAB reversed the Court of Appeal with the ruling that,  “In light of the statute’s unambiguous language, …  An employer or insurer that disputes a specific treatment request cannot be said to have ‘institute[d] proceedings to terminate an award . . . for continuing medical treatment . . .’”  Thus, the prevailing applicant did not get attorney fees as a bonus.

The Supreme Court clearly set out the distinction between terminating a continuing Award for medical treatment and the denial or dispute over a specific treatment request. There is a clear difference between disputing a specific medical request and challenging the validity of the entire Award.  The former does not carry with it the burden of the hourly attorney’s fee.

But what would happen if the defendant denied all of the specific requests for treatment?  The Supreme Court shot down the applicant’s horror story argument by reminding them that Labor Code § 5814.5 would permit the WCAB “to award fees when benefits have been unreasonably delayed or refused.”

The unanimous decision re-iterated the Supreme Court’s earlier approval of the utilization review process with its dispute resolution schemes to solve disputed medical issues.

The threat by applicant attorneys that if a defendant denied or disputed medical treatment after the issuance of an Award has been laid to rest.  Again, common sense prevails.  Blanket denials are not favored.  Legitimate disputes are to be resolved by the utilization review process.  At the highest level of the judiciary, sanity prevails.

— Steve Kline