Insurer not allowed to offset attorney's fees from specific injury award
Spaniol's Case, No. SJC-11218 (Mass. 07/30/13).
The Massachusetts Supreme Judicial Court held that an insurer was not allowed to withhold 22 percent of a compensation award for specific injuries to offset the insurer's payment of the worker's attorney's fees.
What it means: In Massachusetts, the statute that allows an insurer to offset a worker's benefits by the amount owed to the worker's attorney applies only to prospective periodic payments of benefits and not to an award of compensation for specific injuries.
A worker sustained injuries to his knee, shoulder, and head when he slipped and fell during the course of employment. He received workers' compensation benefits and sought compensation for specific injuries. The employer agreed to pay him specific compensation. A state statute allows an insurer to reduce a worker's cash award within the first month of the payment by an amount up to 22 percent to offset attorney's fees. The employer's insurer issued the worker a payment that deducted 22 percent for the worker's attorney's fees. The worker filed a claim for reimbursement of the amount deducted from his compensation award. The Massachusetts Supreme Judicial Court held that the worker was entitled to reimbursement.
The court agreed with the worker's argument that the statute allowing an insurer to offset benefits by the amount owed to the worker's attorney applied only to prospective periodic payments of benefits and not to an award of compensation for specific injuries. The court found that the legislature "expressed a clear intent" to treat compensation for specific injuries differently than other types of workers' compensation. The court concluded that an award of compensation for specific injuries is not subject to reduction by an insurer for the payment of attorney's fees. An insurer is obligated to pay the entire attorney's fees due with no offset.
The court concluded that its holding comported with the humanitarian nature of workers' compensation. An injured worker would receive less total compensation if attorney's fees were deducted from an award for a specific injury than if attorney's fees were deducted from only one month's payment of weekly indemnity benefits. The court also concluded that the definitions in the regulations were not in harmony with the statute and were deemed void.
Read more at the WorkersComp Forum homepage.
September 16, 2013
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