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W.C.A.B. Decision in Costa II
The W.C.A.B. has issued its en banc decision in defendant's Petition for Reconsideration in the Costa v Hardy's Diagnostic and S.C.I.F. addressing the W.C.A.B.'s order for payment of applicant's expenses incurred in presenting evidence in rebuttal to the PD rating issued by the W.C.A.B.
In its prior decision, the W.C.A.B. had determined that the PDRS adopted effective 1/1/05 was validly adopted, that the schedule could be rebutted and reversed the W.C.A.B. order denying reimbursement for applicant's medical legal costs. In this decision the W.C.A.B. appealed several issues including the general determination that the PDRS was rebuttable and also the award of reimbursement for the vocational counselor's costs as an expert witness. The W.C.A.B. rejected all of defendant's attacks on the admissibility of rebuttal evidence but did rescind its award of the expert witness costs, set out standards for WCJ's to consider in determining if such costs should be awarded and remanded the case back to the WCJ for a determination of allowance of the costs in light of the standards outlined in the decision.
The W.C.A.B. held the allowance of costs for expert witnesses to rebut the PDRS is discretionary with the WCJ based upon Labor Code § 5811 and that factors similar to those to assess payment of medical legal costs should also be considered by a judge in determining if and how much should be allowed as an appropriate cost. The W.C.A.B. pointed to the following factors to be considered:
1. The witness must qualify as an expert: The W.C.A.B. pointed to Evidence Code § 720 & 801 to determine if the witness qualified as an expert and the testimony was admissible as expert testimony. The Evidence code does not set a high standard for who can qualify as an expert and generally almost anyone with some level of special expertise can qualify as an expert on the subject of their expertise. (As an example: this author has previously been qualified as an expert and testified in rebuttal to a DEU rating expert some years ago). Finding and presenting experts does not appear to be one of the major challenges in this decision. (Author's Commentary)
2. The costs of evidence on and/or in rebuttal to a permanent disability rating must be reasonable and necessary at the time they were incurred. This issue needs to be addressed on a case by case basis. The W.C.A.B. made it clear that the evidence does not necessarily have to affect the PD rating in the case however the WCJ has ."the discretion to balance the amount of such costs against the benefit obtained." This language presents some interesting issues. Vocational evaluations of such expert witnesses are frequently coming in at $2500 to $3500 per eval with testimony increasing the cost to $5000 or more. This holding of the W.C.A.B. allows a WCJ to reduce the reimbursable costs based on the potential results. Presenting a $5000 evaluation to increase PD by $2000 might not be seen as reasonable and potentially could result in disallowance of some of the cost as excessive. If the W.C.A.B. opinion in the Magana case (see my Eblast of 8/27/07) ends up defining how we use DFEH evidence, the utility of such testimony will become highly questionable in the overwhelming majority cases. The use of DFEH testimony is still under development but this holding makes the ultimate methodology for using such testimony very significant in terms of the potential allowance of costs. (Author's Commentary).
3. The evidence must at least be capable of affecting the rating in the case. The W.C.A.B. noted:".as with medical-legal costs, reimbursement will not be allowed if the report and/or testimony is premised on facts or assumptions so false as to render it worthless. (Citations omitted) Furthermore, as medical-legal costs are not recoverable with respect to reports, for example, that are incapable of proving or disproving a disputed fact, or whose conclusions are totally lacking in credibility (Citation Omitted) reports and testimony of a vocational rehabilitation expert must at least have the potential to affect a permanent disability rating in order for their costs to be recoverable. " Given the rather poor quality of many of the VRC reports that I have seen, this might end up being a very legitimate issue in many cases. The most recent report I have been presented, with a $3800 bill, relies on medical reports before the injured worker underwent surgery to identify work restrictions and includes post injury earnings at the same employer to calculate past earning capacity! The report fails to mention that the only reason the employee is not currently working with his employer is that he was terminated for theft. One report that I have received failed to note that the employee held a college degree. These flaws are not unique in my experience and care should be taken to evaluate the legitimacy of the conclusions of such expert witnesses.
The fact that the W.C.A.B. was willing to reconsider its original award of costs in a case where the WCJ held the evidence from the expert witness to be literally useless in addressing the issues, represents a significant alteration of the ground rules. Under the prior decision it seemed likely that such costs were recoverable virtually without limitation. While challenges to expert witness expenses are still going to be difficult and require careful analysis and significant litigation, there are at least some guidelines that allow a WCJ to consider whether the costs were appropriately incurred. Certainly most WCJs are going to be difficult to convince that some expenses should not be born by defendants, for the diligent WCJs, this decision gives them the opportunity to allow costs for work that effectively addresses the issues in a meaningful and substantive manner and reject costs that are incurred with little or no valid purpose (or possibly as a putative tactic by an Applicant Attorney irritated by a defendant's refusal to cave in to threats of obtaining a DFEH appraisal when it is not appropriate to the case?). Given these guidelines both the Applicant Attorney and the vocational expert will need to be at least a bit more cautious about jumping into this area unless they are able to justify the need for development of vocational evidence.
A copy of the case can be located at :Costa II or at the W.C.A.B.'s website: http://www.dir.ca.gov/WCAB/wcab_enbanc.htm Richard M. Jacobsmeyer Certified Specialist, Workers' Compensation Law The State Bar of California Board of Legal Specialization
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