Delaware Case Law Update: Thirty Day Rule Offer

The Industrial Accident Board employs what is commonly referred to as a Thirty Day Rule.  In sum, the Thirty Day Rule requires all investigations be completed, witnesses identified, discovery exchanged, and settlement offer made thirty or more days from the hearing.  If the employer makes a settlement offer outside of the Thirty Day Rule that is equal or above the Board’s award, the claimant is not entitled to an attorney’s fee.

“The purposes of this rule are: (1) to encourage early settlement by employers before claimants’ attorneys must engage in substantial pre-hearing preparation, and (2) to prevent abuses by claimants’ attorneys, who do not accept valid settlement offers, and thereby force unnecessary Industrial Accident Board hearings.”[1]

In Teresa Holben v. Pepsi Bottling Ventures, the parties appeared before the Board on a dispute regarding the compensation rate for temporary partial disability benefits (“TPD”).  The Board agreed with the employer and awarded TPD based upon the average wage of the employer’s Labor Market Survey (“LMS”).  The employer made a Thirty Day Rule Offer for TPD that included a higher compensation rate than ultimately was awarded by the Board.  As such, the Board denied the claimant an attorney’s fee.  The Board ordered the employer to reimburse the claimant’s medical witness’ fees, as there was an award pursuant to 19 Del. C. § 2322(e).[2]

The claimant appealed the Board’s calculation of TPD and the decision not to award an attorney’s fee to the Superior Court.  The Superior Court affirmed the Board’s ruling on TPD but reversed and remanded the issue of an attorney’s fee to the Board.  The Superior Court concluded that the Thirty Day Rule Offer did not include an offer to pay medical witness’ fees, the claimant succeeded on the “issue” of recovering such fees, so an award of attorney’s fees was mandatory.[3]

The employer argued the triggering factor for attorney’s fees is the award of compensation; i.e. TPD.  The employer also noted the claimant had not incurred an expert’s fee until after the Thirty Day Rule Offer was sent and she had an opportunity to cancel her expert’s deposition without incurring a cancellation fee.

The Superior Court acknowledged “[t]here is reason to question, at some level, the right to recovery attorney’s fees as a cost simply because the claimant recovered a separate cost.”[4]  However, the Superior Court held the statute required an award of attorney’s fees.  The Superior Court also found the claimant was entitled to consider the settlement offer for a full 30 days and rejected the employer’s second argument.

The Superior Court’s Order is currently on appeal to the Delaware Supreme Court and raised concern in the Workers’ Compensation Bar.  The common practice of many attorneys in Delaware making a Thirty Day Rule Offer is not to include a medical witness’ fee.  However, if the claimant incurs a cancellation fee in conjunction with accepting the employer’s offer, those fees are generally reimbursed by the employer.  The Superior Court’s Order requires settlement offers to now include an offer for medical witness’ fees in order to avoid an award of attorney’s fees.  Pending a reversal of this Order, it is recommended that settlement offers now include an offer to pay the claimant’s expert’s cancellation fees incurred in conjunction with acceptance of a settlement offer.

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For more information about this article, please contact Robert S. Hunt, Jr. at 302.594.9780 or rhunt@fandpnet.com.

[1] State v. Drews, 491 A.2d 1136, 1139 (Del. 1985).
[2] (e) The fees of medical witnesses testifying at hearings before the Industrial Accident Board on behalf of an injured employee shall be taxed as a cost to the employer or the employer’s insurance carrier in the event the injured employee receives an award.
[3] Teresa Holben v. Pepsi Bottling Ventures, 2018 WL 6603792, at *1 (Del. Super. Ct. Dec. 13, 2018).
[4] Id at *9.