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Lien Claimant Recovers In Contested Case

Lien claimants can not recover if there is no underlying industrial injury, right?  After all, the employer is not liable for treatment, temporary disability, or permanent disability in cases where the injured worker can not prove an injury occurred or that it arouse out of employment/caused by employment (AOE/COE).

It follows, then, that if there is no recovery, there is nothing to place a lien upon, and a lien claimant who can not prove injury and causation can not recover… WRONG.  Unfortunately, that is not the case in California Workers’ Compensation Procedure.

In the recent case of Herrera v. Civil Demand Associates, the Workers’ Compensation Judge ruled that the lien claimant Bell community was entitled to reimbursement for a medical-legal evaluation in a case where the employer denied injury.

The WCJ recognized, and the Workers’ Compensation Appeals Board reasoned (in adopting and incorporating the WCJ’s report), that the costs of a comprehensive report must be borne by the defendant when a lien claimant seeks to prove injury to collect on its lien, otherwise the lien claimant would be barred from contested claims.

Lien claimants already make ready use of scorched-Earth tactics, pestering the defense into paying for treatment or procedures not “reasonably required” or sometimes not performed at all.  Now lien claimants can further drive up the threshold for nuisance value settlements, threatening to invoke medical legal costs on top of the expense of discovery, appearances and trial.

The Court of Appeal had the opportunity to correct this mistake, but denied defendant’s petition for a writ of review.  (13 ABR 13,237)

Hopefully, this will not be a case that is followed by other WCJs, and the hordes of reserves-eating lien claimants will remain checked by Thomas clauses.

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  1. Steve Cattolica
    September 26th, 2011 at 11:11 | #1

    Greg, How do you suggest that the defendant and/or lien claimant go about proving their case? Didn’t the defendant pay for medical evidence upon which to make their decision to deny? Didn’t the applicant also obtain medical evidence? What do you suggest the lien claimant do?

    • September 26th, 2011 at 11:18 | #2

      Steve – I see your point. What do you think of this system – if the lien claimant can prove the injury and causation, then the cost of the medical-legal evidence will shift to the defense. Otherwise, if the lien claimant pays for a comprehensive medical-legal evaluation and then can’t prove injury and causation, the bill stays with the lien claimant? This is a very small version of loser pays. Otherwise, you will have lien claimants (and I have dealt with such organizations in the past) which know they should not be compensated but will take every chance at driving up the cost on the defense to bully them into submission. What do you think?

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