Will Lien Filing Fees Increase WCAB Costs?

Saturday, October 11, 2003 | 0

SB 228 adds Labor Code section 4903.05 to the California Labor Code, effective 1/1/04, providing for a filing fee of $100 for each initial lien:

"(a) A filing fee of one hundred dollars ($100) shall be charged for each initial lien filed by providers pursuant to subdivision (b) of Section 4903.
"(b) No filing fee shall be required for liens filed by the Veterans Administration, the Medi-Cal program, or public hospitals.
"(c) The filing fee shall be collected by the court administrator. All fees shall be deposited in the Workers' Compensation Administration Revolving Fund. Any fees collected from providers that have not been redistributed to providers pursuant to paragraph (2) of subdivision (b) of Section 4603.2, shall be used to offset the amount of fees assessed on employers under Section 62.5.
"(d) The court administrator shall adopt reasonable rules and regulations governing the procedures for the collection of the filing fee."

One of the purposes of this new statute is to reduce some of the paperwork, and thus, administration expense, at the WCAB level by discouraging the filing of liens where there is not yet a dispute as to liability for payment or the bill is for a deminimis amount. But there is some discussion that the law of unintended consequences will result in the exact opposite effect!

A careful reading of the amendments, additions and deletions created by SB 228 indicates that the only manner is which a lien claimant may recover the filing fee for a lien is to litigate. The amendment to Labor Code section 4603.2, subsection (b)(1)(B) states, "If any contested amount is determined payable by the appeals board, the defendant shall be ordered to reimburse the provider for any filing fees paid pursuant to Section 4903.05." The only way for a "determination" to occur is to hold a hearing where all parties affected by an "order" can present their evidence and argument. It would seem unlikely that defendant carriers/TPAs/employers would voluntarily relinquish $100 per lien in each case.

This argument is further entrenched when read in conjunction with Labor Code section 4903.1. 4903.1 provides that the appeals board shall determine, "on the basis of liens filed with it" whether services have been provided "and its award or approval shall provide for reimbursement for benefits paid or services provided" in accordance with a scheme that is laid out in subsections (1) through (4). Arguably, then, recovery of the $100 filing fee could, in itself, be a lien upon which the WCJ would have to make a determination, again requiring a hearing.

SB 228 requires the court administrator to establish regulations governing the collection of the $100 lien filing fee. Perhaps the administrator should take this authorization one step further and clarify how a lien claimant, if entitled, can recover its filing fee without necessity for an evidentiary hearing.

In addition, another issue has been identified, regarding the constitutionality of LC 4903.05.

LC 4903.1 mandates the filing of liens by "the parties" that have been served "[w]hen a compromise of claim or an award is submitted to the appeals board, arbitrator, or settlement conference referee for approval." Wily lien claimants who work with applicant attorneys, will have the attorney file the lien for them at the time a C&R or Award is requested. The applicant cannot pay the lien filing fee, as doing so would violate section 5811 of the Labor Code ("No fees shall be charged by the clerk of any court for the performance of any official service required by this division [Division 4 governing workers' compensation generally], except for the docketing of awards as judgments and for certified copies of transcripts thereof.").

Finally, this provision may be challenged on constitutional grounds as violative of other lien claimant's due process rights, since no other party to a litigated workers' compensation claim is required to pay a filing fee.

By David DePaolo, president, workcompcentral.com, Inc.