20% Late Payment Penalty in No-Liability Workers’ Comp Settlements is Statutory and Automatic

In Brewer v. WellStar Health System, ____ Ga.App. _____, 2012 WL 540081 (Feb. 21, 2012), the claimant suffered a compensable back injury while on the job and he and his self-insured employer entered into a stipulated settlement agreement. The Board approved the award on July 7, 2009. The Board, at that time, was aware that some parties were not receiving automated e-mail notices of stipulation approvals. In this case, the notice was not received by employer, employer’s servicing agent, or employer’s counsel. On August 4, 2009, Claimant requested the 20% penalty be imposed on employer/self-insurer. This was the first notice employer received that the stipulation had been approved. Employer immediately sent the settlement checks, which arrived to Claimant within one week. The ALJ found that because the provisions of O.C.G.A. § 34–9–221(f) accrue automatically upon approval, and the settlement agreement was approved on July 7, 2009, Employer should be properly penalized the 20% late fee. The ALJ further found that nothing in the Act made Employer’s compliance with the statutory requirement to timely pay the award contingent on its being notified that the board had approved the settlement agreement and issued an award; and, further, Employer had the responsibility to inform itself that the board had issued an award. The Board’s Appellate Division reversed, and the Superior Court affirmed, on the basis that the Board has discretion under O.C.G.A. § 34–9–15(b) as to whether a late penalty should be assessed and that no penalty should be assessed on the present facts. The Court of Appeals held that the statute does not provide discretion, noting that it “applies solely to no-liability stipulated settlements and does not give the board discretion to determine whether to assess the penalty required under O.C.G.A. § 34–9–221(f) for failure to timely pay an award issued on an approved liability stipulated settlement where an injury compensable under the Act has been established.”

For more information, please contact Timothy Buckley III, Esq. at (404) 633-9230.

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