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Feature Article: 120-Day Rule Gets Major Attention by 1st DCA
In two cases this month, the 1st DCA tries to clarify application of F.S. 440.20(4), more commonly known as the 120-Day Rule. See this month’s Case Law Update for:
First, as espoused in the Checkers case, the 120-Day rule only applies to the issue of compensability. In other words, and quite simply, did the industrial accident or incident that resulted in injury occur in the course and scope of employment for which workers’ compensation benefits would be due?
Sometimes things happen that just aren’t meant to be addressed by an employer’s workers’ compensation obligation, and it often takes more than two calendar weeks to make that determination. It is for this purpose that the 120-Day Rule was devised...to give the employer/carrier an opportunity to begin benefit payments (solely for the short-term welfare of the injured employee) while continuing to complete its investigation and make an informed and accurate decision, without prejudicing its right to deny the applicability of workers’ compensation.
The 120-Day rule does not apply to the “rise and fall” of benefit entitlement once the issue of compensability for an injury has been determined.
*Make no mistake...a fine line may often exist between what is an issue of compensability and an issue of benefit entitlement...but that is over which lawyers will continue to argue. The savvy claims adjuster should, however, be able to direct the course of investigation, analysis and negotiation of these issues to arrive at a swift and fair conclusion.
The Long John Silver’s case stands for the simple fact that, even if you send the injured claimant the 120-Day “pay and investigate” letter at the outset of the claim, yet you never begin benefit payment, you are deemed to have denied the claim, and the 120-Day letter really has no effect. The consequences of such an action are two-fold:
- The passage of the 120-Day period is irrelevant. Since you never began the payment of benefits, and the claim is considered “denied” from the beginning, your right to deny the claim is preserved;
- If, later in the claim, the claimant’s attorney convinces you to accept compensability, you will owe an attorney’s fee. So don’t be surprised, and don’t waste time litigating that issue (you know someone will...).
The 120-Day Rule is a good law. Used properly, it can preserve the rights and benefits of both employer and employee, and help both parties over the often difficult requirement of making important and complicated decisions in a very short period of time.
Misused, it can be quite detrimental to the interests of the injured employer, and ultimately quite costly for the employer/carrier.
Some states, where litigation in workers’ compensation is not as prevalent, such a rule is not needed. The employer/carrier can be “the good guy” in the beginning and watch out for the interests of the injured employee without getting “knifed in the back” later for its good deeds. But not so in Florida.
So, while you have it, use the 120-Day rule wisely. The courts understand and support its purpose, and it will serve you well.
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