WCDefenseCA

Happy Wednesday dear readers!

Here we are again, working hard on getting those claims denied and those files closed.  So, let’s talk Labor Code section 5710 fees for a minute. 

Applicant attorneys will demand the defense pay their time under LC 5710 for preparing applicants for depositions and sitting in on the deposition as well.  Sometimes we get crazy demands for things like reviewing the notice of deposition or preparing to prepare the applicant for the deposition and so on and so forth.

But 5710 fees are due for a deposition, what happens when applicant’s counsel demands 5710 fees for a deposition that didn’t happen, or hasn’t happened yet?

Early settlement of a claim is often desirable, so imagine a scenario where applicant’s counsel threatens, or impliedly threatens, to hold up settlement unless there is a payment of 5710 fees.  After all, if there is a settlement without a deposition, applicant’s counsel will be out those fees, no?

Well, your humble blogger was forwarded an Order Suspending Action, issued by a judge in Sacramento, which provides an excellent analysis of this practice of applicant’s demand 5710 fees without a deposition, and, equally inappropriate, defendants paying 5710 fees without a deposition.

Per the OSA, “[w]hat appears to be entirely inappropriate is that defendant proposes to pay applicant’s attorney an additional $800 for negotiating the settlement of this matter.  This appears to be an unearned attorney’s fee.”  The WCJ also cites the Rules of Professional Conduct prohibiting an attorney from developing an interest adverse to his or her client.

How does this all pan out?  Well, if defendant offers $X for a C&R, and the applicant attorney would recommend $X for a C&R, that should be the end of the transaction.  But if applicant’s counsel refuses to communicate or recommend the C&R unless the attorney is PAID to do so, such as with a promise of unearned 5710 fees, then the applicant attorney has an unavoidable conflict because the AA’s interests (of getting 5710 fees) might conflict with the applicant’s interest (of a reasonable C&R).

The WCJ’s OSA was not particularly fond of either AA or the DA in this case, for coming to this arrangement.  The same thing could happen on the defense side too, of course – what happens if a disreputable defense attorney declines a settlement demand that is within his authority in order to bill more hours?  Such an unethical breach of duty to one’s client is completely unacceptable, whether it happens on the defense side or the applicant side.

Ultimately, the WCJ provided additional instruction to the parties, and gave a stern warning that “[p]aying an attorney an unearned fee as inducement to settle a workers’ compensation case is a fraud.  I would further note to defense counsel that where there is extrinsic fraud, i.e. fraud upon the court, the Appeals Board may alter or rescind an award at any time.”

So, what do we do when applicant’s counsel offers a C&R demand contingent on paying unearned 5710 fees?  This might be very tempting, especially as $800 in 5710 fees is a lot cheaper than $2,000 in QME fees and a lot faster too.  Don’t you do it!

Such a suggestion, as pointed out by the WCJ in the OSA, is not ethical, and could be the basis for sanctions.  The attorneys so engaged could be reported to the State Bar for ethical violations.  Such demands should be confirmed in writing, and, potentially, should be referred to the state bar and brought to the attention of the WCAB.

Be on the look out for these instances, and don’t fall into the trap of playing along!

Till next time, dear readers…

Happy Wednesday, dear readers!

Your humble blogger has the misfortune of reliving, frequently and without reason, some of his more awkward moments.  Some as early as my formative years, some more recent.  It’s never a pleasant experience and I would rather not – but awkward is as awkward does. 

Like those awkward memories, COVID19 is going to remain with us, and make us fairly unhappy, for years to come.

When defending a COVID19 case, though, the most obvious argument against compensability is that the exposure and infection occurred outside of the workplace, no?  Given that employees naturally have privacy rights, trying to establish exposure outside of the workplace can be a challenge, certainly.

What better way to get the information about applicant’s non-work activities than to ask those living with applicant?

Well, that is the subject of the panel decision in Labella v. Marathon Petroleum, a panel decision issued by the WCAB late last month.

Applicant alleged injury in the form of COVID19 related illness while employed by defendant.  Defendant then sought to compel the testimony of 3 witnesses who all, as claimed by defendant, lived with applicant.  The petitions alleged the depositions were necessary “to obtain details of [applicant’s] possible exposure to COVID at home.”

Sounds reasonable, no?  If one of the witnesses testifies to coming home with COVID19 from a trip several days before applicant showed his first symptoms, wouldn’t that be relevant to the AOE/COE determination?  Likewise, if no one at home had COVID19 symptoms prior to applicant showing his symptoms, wouldn’t applicant’s counsel be chomping at the proverbial bit to have those witnesses testify under oath and state this fact?

Well, the WCJ denied the petitions, reasoning “this court is unaware of any basis or jurisdiction for compelling a non-party to appear for deposition.”  Defendant then sought removal.

The WCAB granted removal and sent the matter down for further development of the record, but did not reverse the denial of defendant’s petition out of hand.  So, unfortunately, we do not have the fiery and affirmative right to depose family members regarding COVID19 cases.  However, the commissioners did provide some guidance.

The commissioners referred the parties to Labor Code section 5710, which allows the appeals board to cause the depositions of witnesses who need not be parties to the case (“a workers’ compensation judge, or any party to the action or proceeding, may … cause the deposition of witnesses residing with or without the state…”).   The opinion rejects the theory that only the employer’s employee witnesses may be so compelled.

The opinion further notes that the WCJ is empowered to issue protective orders, but that generally the WCJ and the WCAB can order non-party witnesses to sit for deposition.

So, while not definitive or controlling, it does signal that at least 3 WCAB commissioners appear inclined to allow defendants to depose family and co-habitants of COVID19 claimants.

Your humble blogger would add some more food for thought – when we go down this road, we will inevitably run into issues of spousal privilege.  Whether communications between spouses can be offered into testimony, or, more importantly, being called as a witness at all (see Evidence Code 970).  But, we don’t only live with our spouses alone.  Children, roommates, grandparents, parents, etc., do not qualify for the privilege under EC 970. 

Although, hopefully, cases of COVID19 infection become less frequent, and the litigated cases related thereto become less frequent still, we will continue to see these cases crop up now and again.

Till next time, dear readers!