State Compensation Insurance Fund v. Workers' Compensation Appeals Board

We are called upon once again to interpret Labor Code section 5814, which expressly provides that “When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the order, decision or award shall be increased by 10 percent....”

This seemingly simple statute has been the subject .of considerable litigation and its interpretation has posed difficulties for the Workers’ Compensation Appeals Board (WCAB) and the appellate courts.

Labor Code section 5814 “is explicit and clear” (Adams v. Workers’ Comp. Appeals Bd. (1976) 18 Cal.3d 226, 229 [ 133 Cal.Rptr. 517 , 555 P.2d 303 ]), yet “no model of legislative draftsmanship” when one considers the “[m]any problems . .. buried in its language .... ” (Langer v. Workmen’s Comp. App. Bd. (1968) 258 Cal.App.2d 400, 406 [ 65 Cal.Rptr. 598 ]; Manning v. Workmen’s Comp. App. Bd. (1970) 10 Cal.App.3d 655, 658 [ 89 Cal.Rptr. 76 ].)

The specific question presented here is the proper method of calculating the 10 percent penalty where there has been an unreasonable delay in the payment of attorneys’ fees to counsel for the injured worker.

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Attorneys’…