Penalties: Labor Code §5814 provides, in
part, "When payment of compensation has been unreasonably
delayed or refused, either prior to or subsequent to the issuance of an
award, the amount of the payment unreasonably delayed or refused shall
be increased up to 25 percent or up to ten thousand dollars ($10,000),
whichever is less. In any proceeding under this section, the appeals
board shall use its discretion to accomplish a fair balance and
substantial justice between the parties."
In the Kerley case,
the Supreme Court held "that the only satisfactory excuse for
delay in payment of disability benefits, whether prior to or subsequent
to an award, is genuine doubt from a medical or legal standpoint as to
liability for benefits, and that the burden is on the employer or his
carrier to present substantial evidence on which a finding of such
doubt may be based."
Thus, the key elements for establishing a penalty remain 1) a
genuine medical or legal doubt; and 2) substantial evidence
produced by the employer or carrier to support the doubt.
SB 899 made substantial changes to Labor Code §5814. In a post-SB 899 en banc
Workers' Compensation Appeals Board discussed the history and
purpose of penalties and set forth 9 factors
for the workers' compensation judge to consider before assessing a
penalty. Ramirez appealed and the writ was denied, so the Board's
opinion remains the current "gold standard." See Ramirez v. One Beacon Ins. Co.
Workers' Compensation Appeals Board or its judges "may order a party,
the party's attorney, or both, to pay any reasonable expenses,
including attorney's fees and costs, incurred by another party as a
result of bad-faith actions or tactics that are frivolous or solely
intended to cause unnecessary delay....." Labor Code §5813
8 CCR §10561 details what is
sanctionable. Other regs allow sanctions in specific instances: A Declaration
of Readiness to Proceed that contains a false declaration
that "the moving party has made a genuine, good faith effort to resolve
the dispute before filing....." ; filing in violation of Labor Code §4903.6; "An attempt by
any party or attorney to obtain disclosure" from an
interpreter as set forth in Labor Code §5811.
Contempt: Labor Code §5309 allows a workers'
compensation judge to "issue writs or summons, warrants of attachment,
warrants of commitment,
and all necessary process in proceedings for direct and hybrid contempt
in a like manner and to the same extent as courts of
record. For the purposes of this section, "hybrid contempt" means a
charge of contempt which arises from events occurring in the immediate
presence of the workers' compensation judge for reasons which occur
outside the presence of the workers' compensation judge." Labor Code §4062.3(g) allows a
charge of contempt for a party making an ex parte communication to a
Qualified or Agreed Medical Evaluator. The contempt power is rarely
Effect of Settlement: Under Labor Code §5814(c), "
Upon the approval of a compromise and release, findings and awards, or
stipulations and orders by the appeals board, it shall be conclusively
presumed that any accrued claims for penalty have been resolved,
regardless of whether a petition for penalty has been filed, unless the
claim for penalty is expressly excluded by the
terms of the order or award."
Failure to raise
issue on Pre-Trial Conference Statement Form: Labor Code §5814(c) further
provides: "Upon the submission of any issue for determination at a
regular trial hearing, it shall be conclusively presumed
that any accrued claim for penalty in connection with the
benefit at issue has
been resolved, regardless of whether a petition for penalty
has been filed, unless the issue of penalty is alsosubmitted
or is expressly excluded in the statement of issues being