In the last two posts, we discussed the difficulties in facing an unrepresented applicant who has not filed an application, and covered responses such as withholding benefits until an application is filed or simply paying all benefits.

The most common course of action in such cases is for the defendant to file an application for the unrepresented employee, and thereby become liable for applicant’s attorney’s fees.  There is a chance, of course, that applicant will eventually settle without ever hiring an attorney, making § 4064 inapplicable.  But the potential consequences should be weighed before deciding on the plan of attack.

Filing an application for an unrepresented applicant to be able to perform discovery (as per 8 CCR § 10403) will likely make defendant liable for applicant’s attorney’s fees; filing an application for the purposes of settlement approval will likely not (8 CCR § 10400(b)).  But what about other petitions a defendant might file?

Let’s say the employee is injured at work but some third party is at fault, such as the driver in a car accident or the manufacturer of a faulty ladder.  The injured worker is entitled to workers’ compensation benefits, but the employer is entitled to credit under Labor Code § 3861.

Often enough, these cases are not contested by the employer, and benefits are paid and treatment is provided on an industrial basis.  If the injured worker has not retained a workers’ compensation attorney and has not filed an application, how does the employer go about getting an order of credit?

Labor Code § 5500.5 tells us that a workers’ compensation case is commenced with the filing of an application, and California Code of Regulation § 10878 states that “[t]he filing of a compromise and release agreement or stipulations with request for award shall constitute the filing of an application.”

Generally, no Board file will be opened or started for the purposes of filing a Petition for Credit without an application being filed first.  The case law appears to be silent as to the question of whether an application filed on the sole issue of defendant’s petition for credit will trigger § 4064(c).  But speaking from policy, legislative intent and common sense (admittedly weak medicine for defendants to use in the world of California’s Workers’ Compensation practice), merely filing an application on the sole issue of third party recovery credit should NOT trigger liability for applicant’s attorney’s fees.

Having to pay the applicant’s attorney’s fees can make an expensive case 15% more burdensome.  So tread lightly and avoid the landmines that activate this additional liability.