2020 Regulations Update
April 21, 2020
It seems every time we celebrate a New Year we are presented with changes in the California’s Workers’ Compensation system. 2020 was no exception, as revisions of California Code of Regulations, Title 8 became effective January 1, 2020. These changes affect sections 10300 to 10999. This regulatory update marks the largest change and reorganization of the rules since they were adopted.
The purpose of reworking the organizational structure of the rules, which were originally adopted in 1966, was primarily to accommodate the number and complexity of rules adopted in the past 54 years. Overall, this sweeping reorganization was done with the intention of organizing articles to reflect the order of events in a case, limiting duplication within the rules, breaking up complex rules, and to simplify and modernize language to clarify rules. One could argue whether these changes helped reduce or increase confusion in the rules, but there were several changes which bear closer inspection, as some of them have impacted day to day legal practice in workers’ compensation in very serious ways.
This article will discuss some of the changes that affect the everyday practice of workers’ compensation in California. The list of changes is expansive, and this article is not meant to define each and every change, but to present an overview of some the changes that impact our day to day practice, and a resource of where to find those changes for further review.
1. Renumbering The Rules
The first and most glaring change is the complete renumbering of the various sections. This renumbering was done to create space between the rules, so that additional rules can be added without the needs for decimals (DIR Newline Number 2019-50). As familiar code sections will have to be relearned, the hope was that the rules would read more sequentially, and rules involving the same or similar subject matter would be grouped together for clarity. Only time will tell if this change will make an appreciable difference in the ease of use of the rules.
2. Proper Pleading
One of the overarching themes of the rule changes was the form and process of pleading. The changes demonstrate a renewed emphasis on filing proofs of service, properly identifying and joining relevant parties, and providing proper notice to parties.
Rule 10382 discusses the joinder of parties and now requires that a party shall not be joined until 10 days after service of either a petition for joinder or by a notice of intent to join issued by the workers’ compensation judge, unless the party to be joined waives its rights. If an objection is received within 10 days after the service, the judge must consider the objection and provide the objector the opportunity to be heard.
This means that claim professionals must focus on any petition for joinder received and object to them in a timely matter, requesting a hearing if joinder is not appropriate. It is easier and less expensive to prevent an unjust joinder than to obtain dismissal.
In the same vein, the DWC completely reworked prior rule 10550 into new rule 10390, regarding the proper identification of parties. We have all received the Application for Adjudication which fails to properly identify the parties—namely, the insurance carrier—and while it seems as though knowledge of the parties being represented would be fundamental, improper identification of parties on pleadings and orders has long been a problem. This rule change states that “any party that appears at a hearing or files a pleading, document or lien, shall…set forth party’s full legal name…(c) identify the insurer and or employer…and not identify a third party administrator as a party (emphasis added).” The regulation does specify that the third party administrator will be included on the address record for mailing, but will not be considered a party to the action. As a result, we anticipate many amended pleadings in the coming months.
The most important change in pleading, however, which could have the most impact on claims defense, was the revision of Section 10465 and filing an Answer to Application for Adjudication of Claim. The biggest change in this new section for the practitioner is the amended timeframe for filing an Answer. While most of the requirements stayed the same, the section now states that an Answer should be filed and served no later than the shorter of either 10 days after service of a Declaration of Readiness to Proceed, or 90 days after service of the Application for Adjudication of Claim.
This is a significant change, as the previous version of the rule specified only the 10-day time frame from the date of a DOR. It should be noted that both versions of the rule contained the following passage:
“Evidence upon matters and affirmative defenses not pleaded by the Answer will be allowed only upon such terms and conditions as the appeals board or workers’ compensation judge may impose in the exercise of sound discretion.”
As we know, the requirement of pleading affirmative defenses, or face potential waiver, was rarely enforced in the past. However, while this provision has existed in the regulations for decades, this renewed focus on Answers by the DWC, with the inclusion of a new time frame in which an Answer must be filed, indicates we may start to see more and more WCJ’s utilizing their “discretion” to exclude evidence and affirmative defenses not pled within the proper timeframe by answer.
In addition, both the previous and new versions of this regulation state that “a general denial is not an Answer within this rule.” Recognizing that it is not likely that the defense attorney or claim professional will know all of the defenses or pieces of evidence they intend to submit at a later trial, reserving the right to assert all affirmative defenses ensures that none are presumed waived. However, wherever possible, the Answer should list the exact Labor Code section as a defense to avoid waiver. Case law has also supported later amendment of an Answer—even where the pleading states an incorrect piece of information (such as average weekly wage or temporary disability rate)— just as any other pleading may be amended. This would seemingly apply with affirmative defenses where the evidence to support that defense was obtained at a date after the initial 90 or 10-day time frames for filing an Answer.
b) Proofs of Service
In addition to the regulation changes above dealing with the pleadings themselves, the DWC focused on proofs of service accompanying those documents with stringent requirements, and potentially disastrous consequences if not followed.
New regulation 10610 defines “file and serve” to mean that a copy be served on each party “and that the document and a proof of service of the document must be filed with the [WCAB].” Therefore, wherever a party is required to serve a document with a proof of service, that same proof of service must also be filed with the WCAB.
Perhaps in response to insufficient attention to verification, Section 10510 makes clear how to prepare and file petitions and answers to petitions, including the mandate that all shall be verified under penalty of perjury. A failure to comply with the verification requirements constitutes a valid ground for summary dismissal or denial of a petition. Wherever verification is required, the DWC has intimated that failure to properly verify a document may be grounds for dismissal. Additionally, a failure to concurrently file a proof of service with the petition or answer constitutes a valid ground for summarily dismissing or denying the petition or summarily rejecting the answer. The commandment that all petitions requesting board action be filed with a proof of service, which itself must also be filed with the WCAB, demonstrates the renewed focus throughout the rule changes in proofs of service.
3. Timeframes for Filing
In the same tenor as the new regulations regarding the focus and new time frame for filing answers, the DWC also updated rules regarding time frames for filing other documents, including exhibits. In new rule 10620, the DWC states that “any document that a party proposes to offer into evidence at a trial shall be filed…at least 20 days prior to the trial unless otherwise ordered.” This means that where the judge fails to specify a time for submission of documents on a pretrial conference statement, they must be filed with the WCAB 20 days before the trial. Those documents must also be served and the proof of service must be filed with the WCAB as noted above.
Several cases last year, including an instructive panel decision* from the WCAB, dealt with the distinction between business and working days, and requirements for filing when the last day to respond falls on a weekend or holiday. It is not surprising then that the DWC addressed this issue, though somewhat insufficiently, with section 10600. The new rule states:
“(a) The time in which any act provided by these rules is to be performed is computed by excluding the first day and including the last,” and further that:
“(b) Unless otherwise provided by law, if the last day for exercising or performing any right or duty to act or respond falls on a weekend, or on a holiday for which the offices of the Workers’ Compensation Appeals Board are closed, the act or response may be performed or exercised upon the next business day.”
Specifying “business day” has important consequences, as “working day” could include Saturdays, while the former, per the aforementioned panel decision, does not.
Overall, the changes to the rules affect nearly every regulation on the books, and the impact of the changes will be felt in the coming year. As with all changes in the law, some may have a greater effect than was originally anticipated as we experience the new regulations in practice.
For more information about the numerous changes, a final text of the revisions can be found at the State of California Department of Industrial Relations at www.dir.ca.gov
*Puni Pa’u vs. Department of Forestry/Cal Fire (decided September 11, 2019) 2019 Cal. Wrk. Comp. P.D. Lexis 86
Laughlin, Falbo, Levy & Moresi, LLP.