Petition for Contribution: A Sixty-Second Seminar in Workers’ Compensation Claims Handling

When multiple employers or insurance companies share liability for an industrial injury, the injured worker is allowed to choose which of those defendants they want to administer the benefits they are entitled to receive. The elected entity then handles the entire claim subject to their right to seek contribution from the other defendants. Having written that, to avoid a forfeiture, there are some fine points of law which the administrator must adhere to. In today’s blog we will explain them!

First and foremost, the governing statute (Labor Code 5500.5(e), mandates that the claims administering has only one-year from the date of the Award within which to timely file their petition for contribution.  Even an interim award triggers the one-year statute. Failure to timely file a petition bars any recovery rights granted by that award.

Fortunately, many claim professionals are aware of the one-year statute and they typically protect it by timely filing their petition after an award has been issued.  However, confusion occurs when multiple awards are issued over the life of a claim, such as when an interim award for temporary disability is followed a few years later by an award of permanent disability and/or future medical benefits. Claims professionals are often stumped when asked: “Do multiple awards require multiple petitions for contribution or will just one petition suffice?  Without doubt, the law requires a petition for contribution be filed within a year from the date of each and every award that is issued!  In our example if a petition for contribution is filed for the interim TD award but not for the subsequent PD and future medical award, then contribution is allowed only against the interim TD award. Rights of contribution as to the remaining pay outs are forfeited!

Lastly, the date of the original award is what triggers the one-year statute and not the date the award is amended, if applicable. 

Now that you are aware of the finer points of contribution, check your claim files to see if any co-defendants have forfeited their recovery rights against you. You might just save yourself a hefty amount of money!

Should you have any cases where you require assistance in either defending contribution claims or seeking contribution recovery, the team at Friedman + Bartoumian are ready to assist.