November 20, 2006

Source: WorkInjury.com
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As hoped, the California Supreme Court issued its order last Wednesday granting a review of the conflicting opinions on the issue of how to calculate apportionment based on the re-worded SB 899 language of Labor Code Sections 4663 and 4664.

Interested parties from all sides -- including the Division of Workers' Compensation (after suspending further reconsideration on the question until either the Court or Legislature clarified things), the California Applicants' Attorneys Association, as well as employers -- had asked the Court to accept the issue for review so as to provide guidance in resolving the multitude of opinions about how to make sense of these Labor Code sections.

The conflicts arose when the WCAB and Court of Appeal issued conflicting rulings in consolidated cases (including the Welcher and Brodie decisions, among others). The key question is, once apportionment is found to apply in the case, whether the final permanent disability to be awarded should be calculated by subtracting the money values of the pre-existing condition from the money-value of the current disability - OR - whether the respective percentages of disability should be used instead.

For example, if the person is now 100% industrially disabled, but had a minor (maybe 5%) pre-existing condition or award, do you subtract 5% from 100% to get a current disability of 95% -- or do you figure the value of 100% in dollars and reduce it by what a 5% disability is worth (or was worth, which is yet another unresolved question)?

In most -- if not all -- situations, especially involving high levels of overall disability and relatively low degrees of pre-existing causation (such as the example above), using the money values instead of the percentage levels will produce a considerably higher value of current benefits due (or what a potential settlement might be worth).

This is so because of the "progressive" nature of California's disability rating system whereby higher disabilities are worth more "per-percentage-point" than are lower disabilities (or in the above example, the huge difference between 100% being payable at the TD rate, while even 99% is payable at a substantially lower maximum PD rate).

The Court has not yet set a date for hearing.