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New Jersey Supreme Court Rules That Injured Employee May Not Sue Workers’ Comp Carrier for Pain and Suffering Caused Allegedly by Carrier’s Delay in Paying for Medical Services

On August 1, 2012, the New Jersey Supreme Court weighed in on an issue that has important implications for all practitioners of workers’ compensation in this state. The decision in Stancil v. ACE USA A-112-10, 06764. The case concerned a civil law suit stemming from the handling of a compensable work accident that occurred on May 14, 1995. Wade Stancil was injured in 1995 working for Orient Originals and received an award of total and permanent disability.

On September 12, 2007, the Judge of Compensation ordered ACE USA to pay certain outstanding bills consisting of treatment, prescriptions and transportation services. The Judge of Compensation awarded counsel fees and warned the carrier against further violations of court orders. At an October 29, 2007 hearing, the claimant alleged that the carrier ignored the court order and that the medical bills were still unpaid. In that hearing, the Judge of Compensation found that the carrier’s actions were willful and intentional and awarded further counsel fees. In 2008, petitioner underwent further surgery and psychiatric treatment. His physician opined that the need for additional treatment was due to the delay of the carrier in making payments to medical providers.

The Judge of Compensation ultimately concluded that he lacked contempt powers and awarded counsel for petitioner a $1,500 fee. He directed counsel to proceed in the Superior Court for further relief. The claimant then filed a Superior Court action. Defendant argued successfully that plaintiff was barred by the exclusive remedy provision of the New Jersey Workers’ Compensation Act from proceeding in a civil suit against the carrier. The New Jersey Supreme Court affirmed for three principal reasons:

1) First, the Court stated that workers’ compensation remains the exclusive remedy under the statute;

2) Second, the Court said that in amending the workers’ compensation act in 2008, the Legislature rejected a provision that would have given claimants greater power to file in Superior Court and instead adopted a remedy that permits the Judge of Compensation to act through its contempt powers;

3) Finally, the Court said that to allow a common law suit would be to make such actions the preferred manner of securing relief.

The Court said that a decision to allow such law suits “would subject all carriers to the threat of a direct right of action at law that would so overshadow our system of workers’ compensation that the Legislature’s will would be thwarted.” The Supreme Court observed that changes have been made to the New Jersey Workers’ Compensation Act under N.J.S.A. 34:15-28.2. That section of the law was specifically amended to address situations where carriers refuse to obey orders of Judges of Compensation. The Court noted that an earlier version of the bill that led to these amendments would have given a Judge of Compensation broader permission to authorize an action in the Superior Court; however, that version was deleted from the final bill.

The decision in Stancil should put an end to civil law suits against carriers in New Jersey for damages from the manner in which a workers’ compensation claim has been handled.

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