20% Late Penalties on Approved Liability Stipulations

 When an employer/insurer and an injured worker enter into a stipulated settlement agreement, the agreement, or "stip," is sent to the State Board of Workers' Compensation for approval. Once the stip is approved by the Board, the insurance company must issue payment within 20 days; if it does not it will owe an additional 20% late penalty. O.C.G.A. § 34-9-221(f).

Because of a recent decision by the Georgia Court of Appeals, it is now easier for an injured worker to collect the 20% late penalty when he or she enters into a stipulated (liability) settlement rather than a no-liability settlement. Why? Because in Brewer v. Wellstar et. al., the court ruled that the State Board of Workers' Compensation has no discretion, under O.C.G.A. § 34-9-15(b), to decide whether an employer/insurer must pay the 20% late penalty if they fail to pay settlement proceeds in a stipulated settlement within 20 days.

In Brewer, the parties filed a stipulated settlement agreement with the Board, and the Board approved the same. However, the insurance company never received the automated e-mail notice that the stip had been approved, and did not issue payment. After twenty days had passed, the injured worker's attorney requested that the 20% late penalty be imposed on the employer/insurer. The employer/insurer then issued payment, without a 20% late penalty, within one week of being notified that payment was late.

The Appellate Division of the Board found that because the employer/insurer did not receive notice that the stip was approved, payment was not due 20 days after the approval of the stip, and thus the employer/insurer could not be penalized for failing to issue payment within 20 days. The Court of Appeals overruled the Appellate Division's finding, however, and held that the Board's discretion to determine whether late penalties are owed applies only to no-liability settlements and not liability settlements.

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