BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: May 8, 2013 2013-2014 Regular
Session
Consultant: Gideon L. Baum Fiscal:No
Urgency: No
Bill No: SB 258
Author: Lieu
As Introduced/Amended: May 2, 2013
SUBJECT
Workers' compensation: advertisements.
KEY ISSUE
Should the Legislature require that all members of the Workers'
Compensation Appeals Board be attorneys at law?
Should the Legislature clarify existing lien assignment
language?
ANALYSIS
Existing law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that arises out of and in the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either securing the consent of the
Department of Industrial Relations to self-insure or by securing
insurance against liability from an insurance company duly
authorized by the state.
Existing law provides for the Workers' Compensation Appeals
Board (WCAB), a separate judicial body that is vested with
judicial authority to address disputes within the workers'
compensation system. (Labor Code §111)
Existing law provides that the WCAB consists of seven members,
appointed by the Governor with the advice and consent of the
Senate. Five of the members of the appeals board shall be
experienced attorneys at law admitted to practice in the State
of California. Two members need not be attorneys at law. (Labor
Code §§111 & 112)
Existing law permits the Workers' Compensation Appeals Board
(WCAB) to determine and allow liens against any sum to be paid
as compensation for a variety of services or expenses.
Allowable liens include a reasonable fee for legal services, the
reasonable expense incurred in the provision of medical
services, and the reasonable value of living expenses of an
injured employee subsequent to the injury. (Labor Code §4903)
Existing law prohibits an order or award for payment of a lien
to an assignee, unless the person who provided the services has
ceased doing business in the capacity held at the time the
expenses were incurred and has assigned all right, title, and
interests in the remaining accounts receivable to the assignee.
(Labor Code §4903.8)
This bill would require that all seven members of the WCAB be
experienced attorneys at law admitted to practice in the State
of California.
This bill would clarify that the prohibition of an order or
award for payment of a lien to an assignee is only applicable
for liens assigned on or after January 1, 2013, and therefore
would have no effect on liens assigned prior to January 1, 2013.
This bill would declare the lien assignment provisions
declarative of existing law.
COMMENTS
1. Need for this bill?
SB 258 seeks to address two issues in the adjudication of
workers' compensation claims.
Since the creation of the Workers' Compensation Appeals Board
(WCAB) in 1965, the adjudication of workers' compensation
claims has become far more technical and complex. This is
Hearing Date: May 8, 2013 SB 258
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
largely due to the evolution of case law around the workers'
compensation system, as well as the evolution of statute
governing workers' compensation. Today, the functions of the
WCAB more closely resemble a court, and this has been
reflected in the gubernatorial nomination of candidates to the
WCAB - currently, all of the members are attorneys, as has
been the case for many years.
SB 258 addresses this by requiring that all members of the
WCAB must be attorneys.
The second issue SB 258 seeks to address is the assignment of
liens in the workers' compensation system. As a part of the
reforms in SB 863 (DeLeon), Statutes of 2012, Chapter 363, the
assignment of liens was limited to medical and service
providers that were retiring or going out of business. This
was done to combat significant fraud and abuse in the
assignment and documentation of liens in the workers'
compensation system.
However, as currently written, existing law does not restrict
this assignment limitation to liens assigned AFTER SB 863 came
into effect, January 1, 2013. This could create retroactivity
problems, as it would require lien assignees to forgo their
claim on liens that were lawfully assigned prior to SB 863.
While the Committee is not aware of this occurring to date,
the risk of litigation may be significant.
SB 258 addresses this by clarifying the lien assignment
limitations are only applicable on or after January 1, 2013,
and that this amendment is declaratory of existing law. Those
who are assigned liens would still need to comply with the
lien assignment reforms in SB 863, including documenting that
the services connected to the lien were actually provided.
2. Proponent Arguments :
None on file.
3. Opponent Arguments :
None on file.
Hearing Date: May 8, 2013 SB 258
Consultant: Gideon L. Baum Page 3
Senate Committee on Labor and Industrial Relations
4. Prior Legislation :
SB 863 (DeLeon), Statutes of 2012, Chapter 363, which was
discussed above, significantly restructured the manner in
which workers' compensation liens are filed.
SUPPORT
None on file.
OPPOSITION
None on file.
Hearing Date: May 8, 2013 SB 258
Consultant: Gideon L. Baum Page 4
Senate Committee on Labor and Industrial Relations