Positive court ruling on permanent disability apportionment

By CMTA Staff

Capitol Update, May 11, 2007 Share this on FacebookTweet thisEmail this to a friend

In a landmark decision on May 3rd, the California Supreme Court ruled that the Permanent Disability (PD) percentage charged to employers should not include the percentage awarded to an employee for previous work related injuries.  The Court was asked to judge the intent of SB 899 (Chapter 34, Statutes of 2004, Charles Poochigian, R-Fresno) with respect to PD apportionment. The court stated that it shows "a clear intent to charge employers only with that percentage of permanent disability directly caused by the current industrial injury."

After several interpretations by the lower courts, the Supreme Court justices reviewed five cases, which tried to determine how to calculate PD benefits if a previous work injury existed.  The justices upheld an apportionment method which had previously been determined in a 1976 workers’ compensation case, (Fuentes vs. Workers' Compensation Appeals). This method allowed for the subtraction of percentages versus another formula which factors in the percentage of the previous injury. This later formula was supported by applicant attorneys because the PD benefits increase exponentially higher with the percentage of previous injury calculation.

Both employers and employees awaited the results of this court case to determine several pending workers’ compensation cases. An adverse ruling would have resulted in employers paying thousands of dollars in additional PD benefit awards. The Supreme Court ruling was fair and re-enforced the reforms that were implemented by the California legislature in 2004.

As premiums begin to drop and as employers continue to see increased savings, the opponents of the 2004 workers’ compensation reforms continue to look for ways to reverse these achievements. Most recently, cases alleging injured worker discrimination under the Fair Employment and Housing Act have begun to rise.  Nevertheless, last week’s ruling was a strong step forward by our courts to uphold the 2004 Worker’s Compensation reforms.

Read more Workers' compensation articles

Capitol updates archive 989898989