Q: Is there any specific California workers’ compensation statute or regulation the employer can use as a basis to order the insurance carrier not to settle the case and take it to trial?
A: There is some legal support in California workers’ compensation laws and statutes for workers’ compensation cases only allowing for an employer objection to any settlement. If successful in opposing a settlement the employer can leave what typically is the only option left, which of course is trial.
Labor code section 3761(b) requires the employer to notify the insurer of any facts which would tend to disprove the claim “promptly.” If such notice is provided the employer can make a written request to the WCAB that “no compensation is payable to an employee” unless there is proof of service on the employer no less than 15 days prior to WCAB approval of a compromise and release setting a time and place for hearing at which the agreement is to be approved. The employer can then appear at the hearing and state its facts, evidence and arguments against applicant’s right(s) to benefits or settlement. Failure to provide the notice does not prevent the WCAB from approving the agreement but the board shall order Laboe Code section 5813 expenses if such failure to notify is proved.
In order to preserve its rights the employer must file a declaration and petition pursuant to Title 8 California Code of Regulations sections 10450 and 10875. The protections are not automatic. If granted a hearing, the employer can appear and object to any settlement, though there is no guarantee of WCAB disapproval. The important approach would be to fully, fairly and completely document any evidence militating against a right to benefits at that hearing if properly notified by the insurance company and granted by the WCAB in a timely manner.
The best approach when it comes to influencing a California workers’ compensation defense trial decision is to talk with the insurance company and examiner citing Labor Code section 3761 and 3762 (collectively termed “The Employer Bill of Rights”). Too often I see the applicants’ and plaintiffs’ bars united in their representation of California’s injured employees and the defense divided. This is never ideal. Personally I have not encountered an insurance examiner or company not dedicated to fighting legitimate and documented insurance fraud, but the insurance companies know how high the legal standard is for asserting such defenses, the hazards and risks of trial as well as the realities of the system.
I encourage cooperation on the defense. However when principles are involved which require objection to settlements by employers the law provides this support in California workers’ compensation.