Case Law Update – April 18, 2016
Navigating Recent Amendments to the Wisconsin Worker’s Compensation Act
Installment 3 of 5
The Wisconsin Worker’s Compensation Act has been substantially amended in favor of employers and insurers.
This is part three in a five-part series aimed at exploring the predicted consequences of some of the key changes to the Worker’s Compensation Act. This format allows us to dive deep into the new statutory changes, so you’ll have a fuller understanding of your new rights under the law.
For the third installment we’ll look at changes to the Statute of Limitations for Traumatic Injuries and what the reduction to 6 years means for you. Also, Atty. Jennifer Augustin responds to a client’s question on then Intoxication Defense discussed in Installment 2.
Traumatic Injury Statute of Limitations Reduced to 6 Years
The changes made to the statute of limitations are straight forward, and the changes only apply to injuries which occur on or after March 2, 2016. Injuries occurring prior to this date are governed by the terms of the prior statute of limitations. For employers and insurance carriers, the changes provide some good news and some bad news.
The Good News
For most traumatic injuries, the statute of limitations has been reduced to six (6) years, as opposed to the twelve (12) years prescribed by the prior statute. If an applicant does not file a claim for benefits within six years, then their right to file a claim is extinguished.
The Bad News
The six (6) year reduction does not apply to occupational disease claims. Nor does it apply to claims for the following types of severe traumatic injuries:
The loss or total impairment of a hand or any part of the rest of the arm proximal to the hand; or
The loss or total impairment of a foot or any part of the rest of the leg proximal to the foot; or
Loss of vision; or
Permanent brain injury; or
The need for an artificial spinal disc or a total or partial knee or hip replacement.
Given the six (6) year reduction for most traumatic injuries, there will be even more incentive for applicant attorneys and physicians to try to characterize injuries as occupational diseases rather than traumatic injuries. This is a trend that has already been taking place but this amendment will speed things up even further.
As you may know, the basis for defending occupational disease claims often comes down to the nitty gritty details of an applicant’s day-to-day job duties and the duration of employment. Getting accurate, detailed statements regarding the nature and duration of the work involved will become increasingly important. This type of information will help ensure that Independent Medical Examiners have the information they need to accurately evaluate claims alleging occupational disease, so employers and insurance carriers can give themselves their best chance at obtaining a strong defense.
Furthermore, as the number of occupational disease claims increase, it is very important for employers and insurers to understand the role of the Work Injury Supplemental Benefit Fund (WISBF). The statute of limitations for occupational disease claims remains at twelve (12) years—both before and after the recent amendments.
After 12 years (12) years have passed, the burden of paying benefits shifts from the employer and insurer onto WISBF. So if you are called upon to Answer a Hearing Application where benefits are claimed for an occupational disease where over twelve (12) years have elapsed since the date of injury or last payment of indemnity, you or defense counsel should affirmatively allege that WISBF is the liable party and seek impleader of WISBF on that basis.
Why None of This May Matter
Recently, our firm was involved in the defense of a worker’s compensation claim where, about a week before the statute of limitation was set to expire, the applicant’s attorney filed an Application for Hearing just “to toll the statute of limitations.” No claim for any type of benefits was made in the Application for Hearing. To top it off, the applicant’s attorney even indicated on the Application that “no hearing is requested.”
When this Application was served on the clients, they rightly asked the Department to dismiss the Application because no claims were being made and nothing was in dispute. However, the Administrative Law Judge refused to dismiss the Application. Instead, she indicated that:
“I have your letter concerning the[request for dismissal]…..Our policy here is to keep an application on file for five years. If during that time, the applicant presents a claim for hearing, we schedule it. If after five years, we have heard nothing, we then dismiss the Application for Hearing.”
After receiving the ALJ’s decision the clients reluctantly provided an Answer to the Application and again requested that the case be dismissed. The ALJ never responded to the continued request for dismissal. Instead, the case remained stagnant for over six-and-a- half years, during which time the Department simply kept the Application on the books so the statute of limitations would not expire.
When the applicant’s attorney finally submitted a claim for payment of medical expenses to the clients (six-and-a-half years after the Application was filed), the clients denied payment and cited to the fact that the statute of limitations should have expired several years earlier.
A contested hearing was held on the issue of whether the statute of limitations had in fact expired. We briefed the issue extensively, pointing out to the ALJ that in Wisconsin the courts and administrative agencies are bound to enforce statutes of limitation as they are written by the legislature.
We explained that courts and administrative agencies like the Department do not have the authority to create their own exceptions to the statute of limitations. Nor do they have the authority to increase or decrease the duration of the statute of limitations.
Nonetheless, in a decision which was almost entirely devoid of legal analysis, the ALJ found that the statute of limitations had not expired, and that the Department’s policy of accepting applications for the sole purpose of preventing the statute of limitations from expiring was not illegal. Since then, we have appealed the case to both LIRC and the Milwaukee County Circuit Court and both LIRC and the Circuit Court have affirmed the ALJ’s decision. Taken together, the decisions by the ALJ, LIRC, and the Circuit Court are very concerning because they stand for the proposition that the Department has the authority to prevent the statute of limitations from expiring based simply on the request of the applicant’s attorney. But this is not how statutes of limitation are supposed to operate.
On the contrary, statutes of limitation are supposed to be simple. Either you bring your claim within the time period allowed or you don’t. And if you do not bring your claim in time then your right to assert that claim is extinguished completely. That should be all there is to it.
So while the recent changes to the statute of limitations have, in theory, reduced the time to bring claims for most traumatic injuries to six (6) years, the Department’s policy of accepting Applications for the sole purpose of preventing the statute of limitations from expiring threatens to render the statute of limitations completely meaningless. This is a serious concern and there should be a discussion among employers, insurers, and defense counsel regarding the pervasiveness of this policy of accepting Applications solely to toll the statute of limitations. A copy of the policy can now be found at www.wawca.org/uploads/Policy-2013-07-19-Various.pdf.
PRACTICE TIP: HOW DO YOU FIGURE OUT WHEN THE SOL BEGINS TO RUN?
As was the case before the recent amendment, the amended statute of limitations continues to provide that it is either the “date of injury” or the “date that compensation…was last paid”–whichever date is latest– which starts the statute of limitation’s clock ticking.
In most cases the “date that compensation…was last paid” will govern because this date will necessarily post-date the date of alleged injury. It is important to note that payments made for medical treatment or burial expenses do not count when trying to determine when the statute of limitation’s clock begins to run. You need to focus on when indemnity benefits were last paid.
Consider the following example:
Your insured reports that one of its employees claims to have suffered a right knee injury while climbing up a ladder on March 17, 2016. The employee goes to the emergency room and the physician takes him off of work, completely, until the employee can see an orthopedic surgeon two weeks later. You review the claim and determine that you need to issue temporary disability payments to the employee during those two weeks of missed work.
Two weeks go by and, after being seen by the orthopedic surgeon, the employee is released back to full duty work with no restrictions. It turns out that nothing inside the knee was torn and no further treatment is needed. The employee then resumes full time work without further incident.
In this example, the date of injury would clearly be March 17, 2016. But this is not the date you would use to determine when the statute of limitation began to run. Instead, you would use the date of your last temporary disability payment to this employee—which here would have occurred about two weeks after the alleged injury. That would be the date which starts the statute of limitation’s clock ticking.
If any of you have handled claims recently where applicant attorneys have filed Applications just before the expiration of the statute of limitations for he sole purpose of preventing the statute from expiring, I would like to hear from you. There are significant reasons to question the legality of this policy which you should consider before you decide whether to accept or dispute the legitimacy of this policy. There are also procedural options available to you–aside from litigating the issue before the Department and LIRC–which you should be aware of as well.
Ken is a senior associate in Aplin & Ringsmuth’s Deerfield, WI office. He devotes the majority of his practice to representing employers and insurers in the defense of claims for worker’s compensation benefits. Ken earned his Bachelor’s Degree from the University of Minnesota-Duluth in 2009 and his Juris Doctor Degree from the University of Wisconsin-Madison in 2013. He is licensed to practice law in all of Wisconsin’s State Courts, together with the Federal District Court for the Western District of Wisconsin.
Ken is originally from River Falls, WI and now resides in Madison, WI. He is also an active member of the Deerfield, WI community and currently serves on the Board of Directors for the local community center. Outside of work, Ken enjoys fishing, all variety of sports, and spending time with friends and family.