CA High Court Keeps Workers' Comp Liability Formula

May 7, 2007 ( - California's high court has ruled that when employers are faced with workers' compensation claims from employees with previous injuries, the employer is only liable for the portion of the disability due to the latter incident.

The ruling by the California Supreme Court that 2004 workers’ compensation reforms did not change how employer responsibility would be determined in cases with multiple injuries was heralded as a major victory for employers, according to a Business Insurance news report.

The court unanimously found that employers should not be liable for the combined disability, but only for the portion due to the later injury as if a prior disabling injury did not exist.

Before the court was the issue of employer and insurer responsibility for a current permanent disability claim when an applicant also suffered a previous injury, either while working for a former employer or while away from work.

The state high court’s ruled in a case in which five lawsuits had been consolidated and drew a plethora of friend-of-the-court legal briefs from a variety of groups including employer trade associations, Business Insurance said.

The ruling maintains a formula for determining apportionment that the Supreme Court previously upheld in a 1976 case, Fuentes vs. Workers’ Comp Appeals Board.

However, the 2004 workers’ compensation reform measure created doubt over whether the formula for fixing liability adopted in the 1976 case had been superseded by the new law.

Justices accepted the latest case after three separate state appellate courts issued differing opinions on the issue with two asserting that the 2004 reforms had changed the employer liability formula.

Thursday’s ruling will result in hundreds of millions of dollars in savings for employers across the state, a spokesman for the Workers’ Compensation Action Network, a Sacramento, California-based employer and insurer coalition, told Business Insurance.

The latest ruling is  here .