By Robert G. Rassp, Esq.
In a departure from our journeys through the AMA Guides and six books on the subject (and continuing), it is time to switch gears and tackle the subject of arbitrations. We have been blessed with the experience of being an arbitrator in cases since 1995 and as a result, we have gained a deep understanding of how these proceedings and how the laws governing them work. Over the last 16 years, we have heard cases involving contribution, CIGA reimbursement, insurance coverage disputes, consolidated issues; and we have served as a special master, as a discovery referee and as a mediator of large or complex cases. So why not write an article on the subject for you to refresh your memory on the general application of the statutes and regulations governing arbitration proceedings.
We must give credit where credit is due – to Presiding WCALJ Jorja Frank, who asked lots of questions about how arbitrations work and who suggested we write this article to save lots of time explaining the statutes and regulations and how they work in practice. We hope this article assists you in participating in arbitrations, whether before us or before any other arbitrator you may face in a workers’ compensation proceeding.
ARBITRATIONS DISTINGUISHED FROM MEDIATIONS
In workers’ compensation cases, we have separate arbitration and mediation proceedings. Arbitrations are mostly mandatory by statute – more on this later – but mediations involve voluntary participation by parties. Arbitrations are formal evidentiary hearings. Arbitrations require formally offering and receiving items into evidence with the result of a final written decision called an “Arbitrator’s Findings and Award.”
In contrast, mediations are voluntary proceedings wherein parties agree to allow a mediator to discuss a case with counsel and the parties with the goal of having the disputed matter resolved. There is no evidence received and there is no binding decision issued by a mediator. In fact, all matters discussed with a mediator are confidential and are not admissible at trial before the WCAB.
BECOMING AN ARBITRATOR
The official State of California workers’ compensation related list of arbitrators has been in existence since Labor Code sections 5270 through 5278 were enacted in 1989. If you want to be included as a registered arbitrator, contact the Division of Workers’ Compensation through the EAMS forms website where the actual application to become an arbitrator exists. Alternatively, you can contact the presiding judge’s office at any WCAB District Office and find out about the application process.
LABOR CODE PROVISIONS
As indicated above, Labor Code sections 5270 through 5278 govern all aspects of workers’ compensation arbitrations. In addition, Title 8, California Code of Regulations, sections 10866 and 10997 through 10999 apply to arbitrations, which will be discussed separately below. Only Labor Code sections 5277 and 5278 were amended in 2006 and 1995, respectively.
Labor Code section 5270 simply states that the arbitration proceedings in this part of the Labor Code do not apply “in cases where an injured employee or dependent is involved unless the employee or dependent is represented by an attorney.” This section allows represented parties to agree to voluntarily arbitrate any issue, as long as the injured worker is also represented by legal counsel.
WHO CAN BE AN ARBITRATOR?
Labor Code section 5270.5(a) mandates that each presiding judge establishes a list of eligible arbitrators and also provides who can apply to become an arbitrator. Potential arbitrators must be licensed attorneys with the California State Bar and be a certified specialist or eligible to be a certified specialist in workers’ compensation law; a retired WCJ or retired WCAB member or an attorney who was certified as a judge pro tempore. Section 5279.5(b) prohibits an arbitrator from having served as a judge in the case that is being arbitrated or as an attorney or whose law firm had represented a party in the same case.
In fact, an arbitrator had to decline serving in a case involving a dispute over contribution between the current owner of a grocery store chain and its predecessor company when the arbitrator previously represented the Applicant in the case. The parties to the arbitration felt that the arbitrator would be the most knowledgeable on the case since he represented the Applicant and was exclusively familiar with the legal issues in the case. The arbitrator wrote a letter to counsel for the parties involved in the contribution proceedings citing section 5270.5(b) and declined the assignment.
WHAT IF THE PARTIES CANNOT AGREE TO AN ARBITRATOR?
Labor Code section 5271(a) mandates that the parties may agree to an attorney whose name is on the presiding workers’ compensation judge’s official arbitration list. However, if the issue is insurance coverage, the parties can agree to any attorney, even if he or she is not on an official arbitration list. This is because only a few attorneys in the workers’ compensation community are “insurance coverage” specialists. Insurance coverage issues involve attention to detail, contractual interpretations and knowledge of obscure insurance code sections and regulations.
Labor Code sections 5271(b) through (d) govern the procedures if the parties cannot agree to an arbitrator. Basically, the presiding judge develops a list of five potential arbitrators, the number of which depend on the number and type of party involved (applicant, defense, lien claimants) and each party gets to strike two names from the list. This is sort of like the “doc in the box” procedure of selecting a panel QME from a list. “Arbitrator in the box” doesn’t quite have the same ring to it though. The bottom line is that in the vast majority of cases, parties are able to agree to an arbitrator or a judge strongly suggests one.
WHAT ARE THE POWERS OF AN ARBITRATOR?
Labor Code section 5272 governs the powers of an arbitrator which are the same powers of a workers’ compensation judge pursuant to Labor Code section 5300 with two exceptions. Section 5272(a) states that the arbitrator cannot order an applicant to be examined by a QME under Labor Code sections 5701 (which allows a judge to order an exam by a “regular physician”) and 5703.5 (where a party agrees to pay for a QME evaluation that the WCAB or an information and assistance officer requests an exam). Section 5272(b) states that the arbitrator has no power of contempt. Sometimes, we wish we did.
But seriously, does an arbitrator have the power to impose sanctions pursuant to Labor Code section 5813 and Title 8 California Code of Regulations section 10651? There is no known WCAB or appellate authority for an arbitrator to have the power to impose sanctions. Besides, we are selected to resolve legal disputes between parties where those disputes are factually and medically driven and already of record in most cases. This is why it is essential for an arbitrator to have a judicial temperament and to show the utmost of neutrality and respect to the parties who appear before him or her in arbitration hearings.
We think the statute’s use of the term “contempt” versus sanctions is a distinction without a difference – an arbitrator has no authority to issue a contempt order or sanctions against a party or its attorney. Such matters can be referred by the arbitrator to the presiding workers’ compensation judge for appropriate action.
WHO PAYS FOR ARBITRATIONS?
Labor Code section 5273 governs who pays for arbitrators, use of facilities, court reporters and transcript costs. Subsection (a) says in disputes between the employee and the employer, the employer pays these costs. Subsection (b) states in disputes between an employer and insurer, between an employer and lien claimant, or in contribution proceedings under Labor Code Section 5500.5 the parties share the costs equally. In insurance coverage cases, despite the wording of the statute, if a dispute exists between an employer and insurer, usually the insurer pays the arbitrator’s bill and court reporter charges.
The section also indicates that in disputes between dependents over their proportionate shares of death benefits the dependents pay the proportionate share of arbitration costs if there is no dispute over the industrial injury causing death.
Finally, section 5273(c) mandates that any dispute over the costs or fees in arbitration proceedings shall be in the exclusive jurisdiction of the WCAB to be determined initially by the presiding judge of the district office from which the arbitration originated. Also, see below under section 10999 of Title 8 Cal. Code Regulations for the procedures required for the presiding judge to follow in order to resolve arbitration fee disputes.
WHAT KINDS OF ISSUES ARE SUBJECT TO ARBITRATION?
Some issues are subject to mandatory arbitration while other issues are voluntarily submitted to arbitration by agreement of the parties. Labor Code section 5275(a) (there is no section 5274!) requires mandatory arbitration for disputes over insurance coverage and right of contribution in accordance with section 5500.5. Subsection (b) indicates that by agreement of the parties any issue related to workers’ compensation (from Labor Code section 50 or from section 3200) can be arbitrated, regardless of the date of injury.
There is some controversy over whether petitions for reimbursement under Insurance Code section 1063.1 filed by CIGA are subject to mandatory arbitration if the proceedings do not involve a claim of a cumulative trauma injury under section 5500.5. For example, many CIGA cases involve pre- and post-insolvency petitions for reimbursement recovery in successive specific injury cases where there is no issue under Labor Code sections 5412 or 5500.5. In cases that involve CIGA, it appears that some matters are kept at the WCAB before a judge while in other cases, CIGA agrees to have these matters arbitrated. No one has requested judicial review of whether CIGA’s claims for reimbursement under the Insurance Code are subject to mandatory arbitration proceedings under section 5275(a)(2).
WHAT IS “EQUITABLE CONTRIBUTION?”
Equitable contribution issues usually arise in successive injury cases between different employers or insurance companies with the same employer where there are separate and distinct injuries to the same part or parts of body and one claims administrator seeks contribution from another for medical treatment expenses, temporary total disability payments, vocational rehabilitation expenses and EDD reimbursements, if any.
Labor Code sections 5300(b), (d) and (f) empower the WCAB and its judges to resolve disputes between employers and insurers involving issues of payments made to injured workers under the Workers’ Compensation Act. Labor Code section 4909 permits an employer or its claims administrator to pay workers’ compensation benefits to an injured employee without prejudice, before liability is fully established for those payments. By implication, a claims administrator who pays benefits without prejudice and later seeks contribution from another employer or claims administrator for the same employer may do so to seek equitable contribution when it ultimately turns out not to be 100% liable for payment of benefits to the injured employee.
HOW ARE ARBITRATION HEARINGS SCHEDULED?
Labor Code sections 5276(a) and (b) govern the date, time and place arbitration hearings are to occur. Subsection (a) basically says that the parties can agree to the date, time and location of the arbitration proceedings. Usually this is what occurs, the date, time and location – the arbitrator’s office – are agreed upon by the parties in conjunction with the arbitrator’s office. The Petitioner or party who initiates the arbitration usually calls the arbitrator’s office and begins to coordinate a date and time certain that are convenient for all participants in the arbitration proceedings.
If the parties cannot agree to set the arbitration on a specific date, time and location then the arbitrator is empowered to order the setting of the arbitration hearing and its location. Also, subsection (b) states “Unless all parties agree otherwise, arbitration proceedings shall commence not less than 30 days nor more than 60 days from the date an arbitrator is selected.” This is an unrealistic provision of the Labor Code that has not, to our knowledge, been enforced.
This is because most arbitrators are not retired judges or retired WCAB commissioners but are practicing attorneys who are working with the rigors of a law practice’s applicant, defense or combination caseload on top of an arbitration case load. So are the parties who appear before the arbitrators – most attorneys cannot realistically schedule arbitration hearings within the statutory time frames listed in subsection (b) because of their regular appearance schedules.
The first sentence of Labor Code section 5276(c) is one of the most controversial sections that govern arbitration proceedings. We call it the “Ten Day Rule” and the law mandates: “Ten days before the arbitration, each party shall submit to the arbitrator and serve on the opposing party reports, records and other documentary evidence on which that party intends to rely.” This section is rarely complied with in real practice, much to the chagrin of the arbitrators. The purpose of the Ten Day Rule is to allow the arbitrator an opportunity to read the arbitration briefs and exhibits from each party prior to the arbitration so that he or she is fully prepared at the time of the actual arbitration proceeding.
The problem is that sometimes an attorney will raise a violation of section 5276(c) as a “defense” and object to the admission into evidence of an opponent’s exhibits which were submitted to the arbitrator less than 10 days before the arbitration, in violation of subsection (c). We need to point out two things. First of all, there is no statutory remedy within section 5276 for a party’s non-compliance with the Ten Day Rule. Secondly, an arbitrator cannot raise sanctions or contempt against an attorney for not complying with section 5276(c). The arbitrator’s only remedy for a party’s violation of section 5276(c) is to allow opposing counsel additional time to respond or reply to a brief or exhibits that was filed and served late.
At the time of writing this article, a writ is pending in the Second District Court of Appeals in a case called Arrowpoint Capital Corp. vs. WCAB (Vasquez) where the contention is that a late filing of an arbitration brief and exhibits should have resulted in the evidence not being admitted or considered by the arbitrator as a punishment for non-compliance with the Ten Day Rule. The WCAB upheld the arbitrator in allowing the late submitted exhibits into evidence since section 5276(c) is intended only for the benefit of the arbitrator and there is no punishment in section 5276 for a violation of the Ten Day Rule.
The last sentence in Labor Code section 5276(c) states: “If a party intends to rely upon excerpts of records or depositions, only copies of the excerpts shall be submitted to the arbitrator.” While this provision may sound good, experience shows that complete records and complete deposition transcripts should be lodged with the arbitrator if the arbitrator requests or orders them to be submitted. This is because in so many cases, the full deposition of an applicant or physician paints a whole different picture than what an excerpt of one that is propounded by a party. We have seen excerpts of depositions submitted when in fact the entire deposition testimony changes an arbitrator’s ultimate factual finding than what a party is promulgating from an excerpted part of a deposition.
DO I NEED TO PRODUCE AN APPLICANT TO PROVE MY CONTRIBUTION CASE AT AN ARBITRATION HEARING?
There is a simple answer. No. Case law clearly states that a deposition of the injured worker can be used in lieu of testimony at an arbitration proceeding involving contribution between claims administrators. See Graphic Press, Inc. vs. WCAB (Trnavsky) 47 Cal. Comp. Cases 1004 (W/D 1982). In addition, an opposing party (e.g. the Respondent to a Petition for Contribution) has the burden of producing the injured worker as a witness if the Petitioner lodges the Applicant’s deposition transcript as an exhibit at the arbitration proceeding. See Industrial Indemnity Co. vs. WCAB (Warner) 46 Cal. Comp. Cases 136 (W/D 1981).
In reality, only in very rare and limited circumstances does an arbitration proceeding include live testimony of the injured worker. In 16 years of hearing arbitration cases, only one case comes to mind when we had live testimony by the injured worker. That case involved a voluntary arbitration on the issue of whether there was a cumulative trauma injury on top of an admitted specific injury, which would have allowed contribution between insurers in a very high exposure case.
HOW LONG DOES AN ARBITRATOR HAVE TO ISSUE HIS OR HER DECISION?
Labor Code section 5277(a) states: “The arbitrator’s findings and award shall be served on all parties within 30 days of submission of the case for decision.” This is parallel language that is in section 5313 that gives 30 days from the date of submission for a WCJ to issue his or her decision. In reality, most judges rely on the “90 day rule” (Labor Code section 123.5(a) which says judges cannot accept a paycheck if any case is pending 90 days or more from the date of its submission). Labor Code section 5313 is rarely enforced, if at all, for WCJs to issue their findings and awards within 30 days of submission.
The common practice in arbitration proceedings is for the parties to waive the provisions of Labor Code section 5277(a) and allow the arbitrator more time to issue an arbitrator’s findings and award than what is limited by the statute. The unwritten practice is for the arbitrator to issue his or her findings and award within 90 days from the date of submission just like most judges do. It is important for the parties to waive the provisions of section 5277(a) on the record at the time of the arbitration.
If the issue being arbitrated is insurance coverage, all arbitrators should follow section 5277(a) to the letter because an injured worker’s benefits may have been delayed pending a finding of correct insurance coverage, if any, to be determined by the arbitrator.
However, in conjunction with the 30 day rule of section 5277(a), Labor Code section 5277(e) states: “Unless all parties agree to a longer period of time, the failure of the arbitrator to submit the decision within 30 days shall result in forfeiture of the arbitrator’s fee and shall vacate the submission order and all stipulations.” In other words, you start the process over again, from scratch! And the arbitrator does not get paid and he or she has to pay any fees back!
This is a rather draconian outcome for arbitrators who are not aware of the statutory scheme for issuing timely decisions who may work for nothing if they don’t pay attention to the law and their decision aggrieves a party who then files a motion under section 5277(e) to start the entire process over again. This is precisely why you arbitrators out there must request the parties to waive the provisions of section 5277(a) on the record so that you can avoid working until 3:00 a.m. on the 29th day after an arbitration case was submitted for your decision.
WHAT DOES AN ARBITRATOR’S DECISION LOOK LIKE AND WHAT IS ITS EFFECT?
Labor Code section 5277(b) states: “The arbitrator’s award shall comply with Section 5313 and shall be filed with the appeals board office pursuant to venue rules published by the appeals board.” This section requires the arbitrator to issue an “Arbitrator’s Findings and Award” in the same manner that a WCJ issues his or her Findings and Award. Labor Code section 5313 mandates that a judge issue a Findings and Award, order or decision stating the determination of the rights of the parties and “Together with the findings, decision, order or award there shall be served upon all the parties to the proceedings a summary of the evidence received and relied upon and the reasons or grounds upon which the determination was made.”
In other words, the arbitrator must issue an Arbitrator’s Findings and Award (or Findings and Order) and must separately issue an Opinion on Decision, just like a WCJ does. In addition, the arbitrator must comply with the WCAB en banc decision in Hamilton vs. Lockheed Martin 66 Cal. Comp Cases 473 (2001) just like WCJs have to. The arbitrator must create a record that is clearly identified by exhibits and marked accordingly for each party so that the WCAB and any appellate courts have a clean record on appeal. Be sure to refer to the WCAB Rules of Practice and Procedure, Title 8 California Code of Regulations, section 10629, which governs the listing and filing of exhibits and which section applies in all WCAB trial courts and arbitration proceedings.
The arbitrator’s written decision is filed by the arbitrator with the presiding judge of the WCAB District Office that has venue over the underlying case, which was previously determined by the Applicant or by a judge in the event of a dispute over venue.
Labor Code section 5277(c) states: “The findings of fact, award, order, or decision of the arbitrator shall have the same force and effect as an award, order, or decision of a workers’ compensation judge.” This simply means that an arbitrator’s decision carries the same weight and is as binding on the parties as if a WCJ had issued the decision. It also means an aggrieved party can appeal an arbitrator’s decision in the same manner as appealing a judge’s decision, which is discussed below.
Labor Code section 5277(d) states “Use of an arbitrator for any part of a proceeding or any issue shall not bind the parties to the use of the same arbitrator for any subsequent issues or proceedings.” This is an interesting provision in the Labor Code and we don’t know why this provision even exists. One would think an arbitrator would have the most knowledge about a case that returns for further arbitration on other issues but, heck, we didn’t write the legislation. We guess that if you don’t like the arbitrator in the first part of the case, you can arbitrator shop for the next part of the case if something comes up later that is subject to mandatory arbitration. We can speculate that perhaps the drafters of subsection (e) were thinking that you could have arbitrator #1 on insurance coverage and have arbitrator #2 on contribution proceedings later.
Labor Code section 5277(f) states: “The presiding workers’ compensation judge may submit supplemental proceedings to arbitration pursuant to this part.” This is a catch-all provision that allows a presiding judge to refer a matter for arbitration if the judge feels that the matter should go to arbitration on supplemental issues. An example would be for a presiding judge to refer a case for supplemental proceedings on CIGA’s Petition for Reimbursement under Insurance Code section 1063.1 as stated above. The reason for such a referral may be for judicial economy at a WCAB District Office that was short handed and judges were not available for these proceedings.
Labor Code section 5278(a) states: “No disclosure of any offers of settlement made by any party shall be made to the arbitrator prior to the filing of the award.” In other words, the arbitrator is to stay out of settlement negotiations between parties who are appearing before him or her in an arbitration proceeding. We think this provision is intended to maintain the neutrality of an arbitrator during the entire process and to not allow an arbitrator to mediate the case instead of deciding disputed issues.
That being said, sometimes parties will ask an arbitrator to participate in discussions about the case including questions about the law governing insurance coverage; aspects concerning contribution or reimbursement claims, equitable contribution and other nuances of these cases and the parties must waive, on the record, the provisions of this section if the arbitrator is asked and agrees to participate. Arbitrators should leave the parties alone to discuss pending issues and disputes and to let them try and resolve the case without the formal arbitration process but the arbitrator should not offer any advice or information unless both parties agree to allow the arbitrator to participate and the parties waive the provisions of section 5278(a) on the record.
Labor Code section 5277(b) states: “Article 7 (commencing with Section 11430.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code applies to a communication to the arbitrator or a potential arbitrator.” These sections of the Government Code prohibit ex-parte communications between a judicial officer who is presiding over a hearing and a party or someone acting on behalf of a party. The sections referred to require disclosure of any ex-parte communication to be recorded on the record by the judicial officer and for everyone to have an opportunity to be heard on the effects, if any, of the ex-parte communication. In other words, don’t do it in the first place! The probable purpose of section 5277(b) is again to remind the parties that the arbitrator is a hearing officer and is not a mediator – you cannot “talk to the arbitrator alone.”
WHAT IF I WANT TO APPEAL AN ARBITRATOR’S DECISION?
This is covered in the WCAB Rules of Practice and Procedure, Title 8, California Code of Regulations, Article 17, section 10866 which is titled “Reconsideration of Arbitrator’s Decision or Award Made Pursuant to the Mandatory or Voluntary Arbitration Provisions of Labor Code Sections 5270 through 5275.” Section 10866(a) mandates that any person aggrieved by an arbitrator’s decision shall be subject to the reconsideration process as set forth in Labor Code sections 5900 through 5911 and Rules 10842 through 10850.
So an aggrieved party must file a timely, verified Petition for Reconsideration as if the arbitrator’s decision was issued by a WCJ. In addition, section 10866(a) states: “The parties, respectively, shall serve the arbitrator with the petition for reconsideration and the answer.”
Section 10866(b) mandates that a petition for reconsideration and an answer may be filed at any district office or with the office of the Appeals Board in San Francisco (the 9th floor Recon Unit and not the trial court downstairs!). Then section 10866(b) warns that duplicate copies of petitions filed with a district office shall also NOT be filed with the WCAB Recon Unit or other District Office.
Section 10866(c) covers what the arbitrator is supposed to do if a party files a petition for reconsideration of his or her arbitration decision. The arbitrator must:
1. Prepare and serve an Arbitrator’s Report and Recommendation on Petition for Reconsideration in accordance with WCAB Rule 10860 (the same section that mandates a WCJ to file an R&R within 15 days of receipt of a Petition for Reconsideration).
2. The arbitrator must forward the original Arbitrator’s Report and Recommendation and a photocopy of “the complete arbitration file” directly to the presiding judge for the district office having venue over the matter.
3. The district office shall scan the arbitrator’s R&R and photocopy of the arbitration file into the EAMS adjudication file, and, after scanning, destroy the file!
4. The adjudication file shall be electronically transferred to the WCAB Recon Unit for action on the petition for reconsideration, “or, to the extent that the adjudication file is in paper form, the file shall be delivered to the Appeals Board.”
These last two events do not occur under the current EAMS configuration. Once the WCAB panel issues its decision granting or denying reconsideration, the arbitrator’s paper file is sent back to the arbitrator either directly by the WCAB Recon Unit or by the presiding judge from the original district office where the case originated.
Section 10866(d) states: “The petition for reconsideration, any answer, and the arbitration record shall be deemed part of the WCAB’s record of proceedings under section 10750.” This just informs us that the arbitrator’s file and the subsequent documents on appeal are part of the WCAB official record of the proceedings, even though these documents were not issued from a WCJ in the WCAB file.
Section 10866(e) provides that the parties reimburse the arbitrator for the cost of photocopying the arbitrator’s file in the same manner as paying the arbitrator’s fees under Labor Code section 5273, payment to be made for the photocopying within 30 days from receipt of the arbitrator’s bill for these costs. Note to our readers – we do not bill for photocopy charges since the WCAB sends back our file when they are finished with it. We don’t want two copies of your arbitration file at our office – one is enough!
ARE THERE ANY OTHER REGULATIONS GOVERNING ARBITRATIONS I NEED TO BE AWARE OF?
Yes, and they are WCAB Rules of Practice and Procedure, sections 10997, 10998 and 10999.
Rule 10997 simply states: “In no event will arbitration be permitted after the taking of testimony in any proceeding.” We think the purpose of this rule is to prevent a WCJ from saying, “Gee, I hate this case, I am sending this case to arbitration…” after hearing testimony at trial. So once a judge hears testimony, he or she is stuck with the case and cannot pawn it off on an innocent but willing arbitrator. Once a judge starts hearing testimony, the parties cannot get cold feet and agree to arbitrate the matter.
Recently, a WCJ retired but had previously heard testimony (about 8 days!) in a case prior to his retirement and had not decided the case. The parties had to waive this section in order for the retired judge to finish the case as an arbitrator which the parties gratefully agreed to do. The other judges were also grateful the parties did not have to start the case over again!
Section 10998 is titled “Disqualification of Arbitrator” and is a fish out of water. That section refers to section 10995 which was repealed on November 17, 2008. So what is left of section 10998 is tied into Labor Code section 5271(b) through (d), the procedure to select an arbitration panel from which parties strike two names if they cannot agree who the arbitrator should be in a case.
Rule 10998 governs the procedure a presiding judge needs to follow if a party asserts a challenge for cause of one of the listed arbitrators in a panel pursuant to California Code of Civil Procedure, section 170.1. Simply stated, if a party challenges for cause any proposed arbitrator on a panel list provided by the presiding judge, a replacement arbitrator’s name is substituted in.
Rule 10999 covers arbitrator fees and cost disputes and how they are to be resolved. The section starts off by stating: “Any dispute involving an arbitrator’s fee or cost shall be resolved by the presiding workers’ compensation judge of the appropriate local office, or, in his or her absence, the acting presiding workers’ compensation judge.”
The section then goes on to require that any dispute resolution request include information including any written fee agreement, a statement of what the dispute is over and an “itemization of the hours spent in actual arbitration hearing, in preparation for arbitration, and in preparation of the decision. The statement shall also include an itemization of the verifiable costs including use of facility, reporters and transcript preparation.”
Section 10999 then describes the criteria the presiding judge is to use to make a finding that: “An arbitrator fee shall not exceed a reasonable amount” which shall be based on the responsibility assumed by the arbitrator, the arbitrator’s experience, number and complexity of the issues being arbitrated, time involved, and expeditiousness and completeness of issue resolution.
Finally, section 10999 mandates that each presiding judge of each local office “shall maintain statistics on all arbitration fees awarded pursuant to Labor Code section 5273(c) including the amount thereof and rationale and basis for the award pursuant to the criteria listed in the preceding paragraph of section 10999. Also: “Arbitration costs will be allowed in a reasonable amount pursuant to Labor Code section 5273(a).”
We are aware of only one case in which a party appealed an arbitrator’s bill to a presiding judge. The attorney representing the aggrieved party wanted to produce comparable arbitration bills for similar cases to show that the arbitrator’s $39,000.00 bill was unreasonable. That case is pending at the time this article was written.
Suffice it to say that historically, arbitration bills are less than $10,000.00 even in complex cases; and are considerably less than $5,000.00 in most cases.
MY CLIENT SIGNED A C&R OR STIP AWARD WHERE WE AGREED MY CLIENT WOULD PAY 25% OF THE AMOUNT OF THE SETTLEMENT AND NOW CO-DEFENDANT WANTS MY CLIENT TO PAY 60% CONTRIBUTION. AREN’T THE PARTIES BOUND BY WHAT PROPORTIONATE SHARES WERE PAID BY EACH DEFENDANT IN THE SETTLEMENT WITH THE APPLICANT?
Simple answer, NO! Contribution proceedings involve a trial de novo on all issues, regardless of what percentages of liability were paid in a settlement with the injured worker. See Greenwald vs. Carey Distributing, Inc. (1981) 46 Cal. Comp. Cases 703 (WCAB en banc decision). The exception is if the C&R or Stipulated Award specifically resolves the proportionate share of liability of each defendant and specifically concludes all pending contribution issues. In most cases, some respondents to a Petition for Contribution may not have been named defendants let alone participants in a settlement with the injured worker at the time of approval of a C&R or Stipulated Award. They may have been “elected out” of the case pursuant to Labor Code section 5500.5(a) and brought back into the case during contribution proceedings under section 5500.5(e) after the case in chief was settled with the injured worker.
PRACTICAL TIPS
So what do you learn from this article? There are several practical tips that we can share with you to make each arbitration you participate in a pleasant experience and beneficial for your client.
1. The parties have to complete an Arbitration Submittal Form at the WCAB District Office where the case is venued.
2. Try to agree on an arbitrator before you see the judge.
3. Have the PWCALJ approve the arbitration and appoint the arbitrator. The PWCALJ can delegate this duty to another WCJ.
4. Please send the arbitrator copies of the Arbitration Submittal Form or at least send Minutes of Hearing appointing the arbitrator to the case.
5. Prepare the arbitration brief like it was a trial brief – statement of facts, issues presented, what evidence is being relied on, points and authorities for any legal issue.
6. Attach marked exhibits to the brief in accordance with the WCAB Rules of Practice and Procedure. See Title 8 California Code of Regulations section 10629.
7. File and serve the brief with attached exhibits on the arbitrator and opposing counsel at least 10 days prior to the arbitration.
8. If you are late, don’t fax the brief and exhibits to the arbitrator! Get written permission from your opponent to submit a late brief and exhibits, if possible. If you don’t get your opponent’s permission, bring the brief and exhibits to the arbitration hearing.
9. If you show up at the arbitration hearing with a brief and attached exhibits, or if you file them within 10 days of the arbitration hearing, expect your opponent to request additional time to file a reply or response brief with or without additional exhibits.
10. Some arbitrators charge a non-refundable fee if the arbitration is continued or cancelled (we don’t!).
11. If you settle the case prior to the arbitration hearing, someone needs to file a settlement document with the WCAB. Use a cover sheet and separator sheet (ADJ/miscellaneous/correspondence - other). Usually, the Petitioner files the settlement document if the case is settled prior to the arbitration hearing, which saves money since you don’t have to pay the arbitrator.
12. If you settle a contribution case, make sure to indicate that you are settling all past, present and future claims of contribution, unless you are only settling part of contribution issues. If the Applicant settled by way of a Stipulated Award or Findings and Award, future payments to the Applicant in accordance with those Awards may be subject to future contribution from another claims administrator.
13. If you settle contribution or reimbursement issues, provide the payee name, tax ID number of the payee, claim number and where to send the money to.
14. Cases that settle at the arbitration hearing should have the settlement terms stated on the record, “payable within 30 days of receipt of the Reporter’s Transcript of Arbitration Proceedings.”
15. Whoever the petitioner is (the party responsible for initiating the arbitration proceedings at the WCAB) should ALWAYS order a court reporter to appear at the arbitration hearing. Remember, in most arbitrations, the parties share the cost of the court reporter in equal shares.
16. Please show up on time to arbitration hearings! Our time is money too!
17. Please have your clients pay the arbitration fees within 30 days of receipt of the bill. Even if you intend to file a Petition for Reconsideration, the arbitrator is still entitled to payment for services through the date of his or her decision. In addition, an amended billing will be sent once the arbitrator has filed his or her Arbitrator’s Report and Recommendation on Petition for Reconsideration.
18. When you appear at the arbitration, please comply with WCAB Rule of Practice and Procedure, section 10550 which requires you to identify precisely who your client is. See Coldiron vs. Compuware Corp. 67 Cal. Comp. Cases 289 (WCAB en banc decision 2002). When an arbitrator issues his or her Findings and Award, the precise name of your client needs to be included in the Award. The exact name of your client sometimes is not clearly spelled out in prior settlement documents such as a C&R or Stipulated Award.
19. Make sure you either file or bring to the arbitration proceeding full deposition transcripts of the Applicant, witnesses and any physicians since excerpts sometimes are not sufficient to create a full record.
20. When you go on the record at the arbitration, the arbitrator will conduct the hearing the same way a trial judge does. First, you announce your legal appearances on the record, starting with the party who initiated the arbitration (e.g. Petitioner for Contribution). Then the arbitrator will read into the record the exhibits on behalf of each party, subject to opposing counsel’s objections that are made on the record. The arbitrator has to receive proffered exhibits into evidence and rule on any objections to their admissibility. Best practices suggest that the arbitrator should state on the record what the issues are and what facts the parties stipulate to. Usually, the parties stipulate to insurance coverage periods for each participating claims administrator.
Once the record of exhibits is established, the arbitrator will ask the parties if there are any witnesses (in contribution cases, there rarely are; in insurance coverage cases, there always are witnesses). If there are no witnesses, the arbitrator will invite counsel to provide any oral argument for matters that were not covered in the arbitration briefs. Sometimes there is oral argument and sometimes there is none.
Once the oral argument is complete, the arbitrator asks the parties if there is anything further and if not then gives the parties the case’s disposition. Included in the disposition is the parties’ waiver of Labor Code section 5277(a), if appropriate. The record is closed when the arbitrator announces: “Upon receipt of the Reporter’s Transcript of Arbitration Proceedings, the matter will stand submitted.” Sometimes, the arbitrator will keep the record open until a specific date certain to allow further briefs and/or exhibits to be submitted post-arbitration hearing with all parties allowed to respond in writing to the other’s reply or supplemental briefs.
21. The Reporter’s Transcript of Arbitration Proceedings is prepared by the court reporter with the original being sent to the arbitrator and copies sent by the court reporter to counsel for each party.
22. After submission of the case for decision, the arbitrator’s work really begins and after reviewing all of the documentary evidence and legal arguments, he or she makes his or her decision and writes it up. The arbitrator has to file and serve the Arbitrator’s Findings and Award (or Order) on all interested parties, including the claims administrators and counsel for them. The arbitrator files his or her decision using the document cover sheet and separator sheet (ADJ/MISC/Correspondence-Letter) with a proof of service. Then your fun begins and you have your client pay the arbitrator and you talk them into not filing a Petition for Reconsideration!
23. Arbitrators, just like judges, do not like being reversed by the WCAB. There is a feeling that you did something wrong and you feel like you need to go back to school, but there isn’t any school. This is why we take our jobs very seriously and we feel a very strong obligation to provide substantial justice in every case. It is a very compelling burden to do what is right, based on the evidence presented by counsel. Arbitrations are a very interesting and challenging part of our law practices and we appreciate your confidence in selecting us in your cases as arbitrators.
© Copyright 2011 Robert G. Rassp, Esq. All rights reserved. Reprinted with permission.