Imagine this: you injured yourself at work, and the insurance company denied your claim, forcing you to hire a lawyer to file a Claim Petition for workers’ compensation benefits on your behalf. Hearings and depositions are held over the next several months in your case; all the while, you have not been receiving a check. Finally, a settlement is reached in your case, which a Workers’ Compensation Judge approves after holding a hearing. Long at last, you are going to receive a lump sum settlement check. You will be able to catch up on your bills and get your life back in order.
But then 30 days goes by, and you still have not received your check. You call your lawyer, who reaches out to the lawyer for the insurance company to find out why you have not received your check. The insurance company tells your lawyer that “the check is about to go out.” Again, though, you do not receive your check, which increases your frustration. Incredibly, it is not until 60 days after the Judge approved your settlement that you receive your check. In the meantime, your landlord is really breathing down your neck and threatening to evict you. Do you have any recourse against the insurance company for the long delay in sending you your settlement check?
The answer is…yes, you do. Pennsylvania workers’ compensation law provides that a Judge may impose penalties of up to 50% of the amount in question if the insurance company violates the law. In this instance, the insurance company has 30 days from the date of the Judge’s decision approving your settlement to make payment. If payment is not made within 30 days, your lawyer can file what is called a Penalty Petition, which will be heard by a Judge; it could be the same Judge who approved your settlement, or it could be a different one. Either way, the Judge has the discretion to impose a penalty of up to 50% of the amount that you were entitled to in the settlement. If your settlement was for $40,000, you would be entitled to $32,000 after the deduction of attorneys’ fees of $8,000 (20%). So under the law, the Judge could award you a maximum penalty of $16,000 – 50% of the $32,000 – for the late payment.
Understand that the Judge will allow the insurance company lawyer an opportunity to explain why the delay occurred and submit evidence to support that there was a valid reason for the delay. For example, if you lived at a certain address when your case started which was provided to the insurance company, then you moved but did not pass on the new address, and the insurance company mailed your check to your old address which was returned, the Judge may find that is a valid reason for the delay and not impose penalties. However, if the best excuse the insurance company lawyer can come up with is there was a backlog in the check processing department, that is probably not going to cut it.
The question is – realistically, how much will the Judge award in penalties if your check is late? If the insurance company sent your check a few days after the 30-day mark, the Judge may not impose a penalty unless you can show you suffered a hardship as a result of the delay. If your car was repossessed on the 35th day, which would have been avoided if they sent the check on time, you have a good argument that a penalty is warranted. If your check was sent 30 days late, even if you cannot point to a particular hardship, the Judge in all likelihood will impose some penalty, as long as there is no reasonable excuse, because a month is a lengthy delay.
The longer the delay, of course, the higher the penalty you are likely to receive. Judges do not impose 50% penalties often, but if your settlement check was sent three or four months late, and the insurance company offers nothing but weak excuses, some Judges will slap the insurance company with a 50% penalty or close to it.
This is not the only circumstance in which you will be entitled to a penalty; insurance companies often violate the law in a number of different ways, subjecting themselves to potential penalties. If you have been out of work completely and receiving total disability benefits and then return to work part-time at a wage loss, you will be entitled to receive partial disability benefits to make up for your wage loss. If the insurance company fails to pay you partial disability benefits and instead cuts off your benefits, you will have a basis to receive penalties.
If you are receiving a weekly check for workers’ comp. benefits, say every Friday, and then suddenly you start receiving your check three days late, and then a week late, and then two weeks late, your lawyer should file a Penalty Petition for you. If only one check was late, and it is not a significant delay, it is doubtful that the Judge will award penalties. However, if it has become a pattern such as the example we provided, the Judge may award you a penalty.
If you have a workers’ comp. claim and think the insurance company is violating your rights, please contact Pearson Koutcher Law. In fact, you should contact Pearson Koutcher Law even if you do not think your rights are being violated because it is always a good idea to have an experienced workers’ comp. lawyer on your side. Undoubtedly, at some point, the insurance company will start to hassle you. At Pearson Koutcher, workers’ comp. is all we do, 100% of the time. So please contact us for a free, comprehensive consultation and evaluation of your case.