To Appeal or Not to Appeal? Relevant Considerations When Faced With an Unfavorable Commission Decision

There are times when an award of compensation or order issued by the Maryland Workers’ Compensation Commission is unfavorable or seemingly unfair, leading an employer or insurer to consider filing a petition for judicial review. However, an appeal of an adverse decision does not always result in a significant benefit to the employer and insurer, even if it is successful. How can employers and insurers determine whether the potential benefit of challenging the Commission’s decision warrants the time and costs involved?

There are four main questions which can help guide a decision of whether or not to take an appeal:
1. Is the jurisdiction favorable?

From a strategic standpoint, when deliberating an appeal, it is helpful to examine the potential jurisdiction in which such an action would be filed. How strong is the evidence in your favor versus how sympathetic the claimant is in the jurisdiction covering the appeal? Juries with no experience in workers’ compensation law may respond more strongly to emotion than a Commissioner with a background in interpreting cases through medical diagnoses and records.
2. What are the estimated litigation costs associated with the appeal?

It is important to employ a cost-benefit analysis in the evaluation of any appeal. Expert fees, videographer fees, court reporter fees, and attorney’s fees scale with the complexity of the case, among other factors. Many times these costs can simply outweigh the potential gain—especially when factoring in the risk that a jury does not side with the employer and insurer.
3. What portion of the ordered benefits, if any, will be outstanding by the time the appeal is over?

An appeal is not a stay of the Commission’s decision. Ongoing medical and indemnity benefits must be paid during the pendency of an appeal. Maryland Rule, Labor & Employment § 9-741 does, however, allow employers and insurers to hold in escrow payment of past incurred medical bills and claimant’s attorney’s fees when an appeal is filed. Even if a judge or jury overturns a Commission Award of ongoing benefits, there is no mechanism to return those benefits. Rather, an employer and insurer are left to pursue any available credit for compensation previously paid against future indemnity benefits.

When considering an appeal, employers and insurers should consider what portion of the ordered benefits will be outstanding by the time a final decision is reached. An ordered period of permanency benefits begins starting on the date following the last compensation paid to a claimant. Thus, when deciding to appeal a permanency award, employers and insurers can generally estimate what portion of benefits will remain unpaid at the time of trial. For a jury trial, courts can vary from eight months to eighteen months from the filing of the appeal to trial. Will the entire award be paid (and only reimbursable via credit) at the time of trial or will a favorable result yield an immediate savings through the termination of ongoing benefits? Given the ongoing benefits typically associated with awards of serious disability or permanent total disability, challenging these types of decisions may be more worthwhile, particularly where the Commission has awarded minimal serious disability benefits.

4. What bearing does the Commission’s decision have on the continued exposure of the claim?
In evaluating a potential appeal, consideration should be given to the effect of the Commission’s decision on the future value of the claim. For example, does the decision at issue open the door to a future of extensive care, multiple surgeries, and potentially serious disability? Or, does the decision merely represent a disagreement of a few percentages on a first or second tier permanency award?

When it comes to an order authorizing medical treatment, claimants will typically have undergone any ordered treatment by the time of trial. For this reason, the issue of future exposure tends to be more relevant than the cost of treatment. A spinal surgery, ongoing head injury treatment, or other treatment to a complex system is more likely to lead to a great deal of future exposure than physical therapy for a sprain/strain or a carpal tunnel release surgery. It would typically be more reasonable to appeal the type of treatment for the former category than the latter.

For more information about this article, please contact April Kerns at 410.230.2975 or akerns@fandpnet.com.