Published on:

Handling Bad Faith Workers’ Compensation Disputes in Atlanta

In Atlanta workers’ compensation claims, it’s not uncommon that an employer or an insurance company disputes payment. After all, they want to limit their own liability and costs as much as possible. coins5.jpg

However, once a claim has been deemed valid, the insurance company acts in bad faith if it refuses to pay. Other bad faith actions by insurers in workers’ compensation claims include:

  • Disputing or delaying benefits absent a valid reason;
  • Forcing an injured employee to take a low-ball offer;
  • Refusing to pay for necessary medical care or other benefits;
  • Withholding benefits during the appeals process.

These kinds of actions can be devastating for workers because they are already unable to work. They are losing wages. Medical bills are stacking up, and they require continued care. Plus, they have to figure out how to pay the mortgage and make sure there are enough groceries to feed the family.

Bad faith actions by insurance companies are unacceptable. Yet they happen all the time, as the recent case of Williams v. Liberty Mutual Ins. Co illustrates. Here, the U.S. Fifth Circuit Court of Appeals ruled that intentional bad faith refusal to pay a person’s workers’ compensation is more than simply a breach of contract. It is an independent tort committed by the carrier outside the scope of employment. This means that, in that district anyway, plaintiffs have every right to file a separate lawsuit against the insurance company to force them to pay.

According to court records, the plaintiff was injured during the scope of his employment while working as a residential contractor. Despite his being awarded workers’ compensation benefits, the insurance company for the employer did not make payments in a timely fashion. In fact, payments were delayed for a full eight months.

This prompted the plaintiff to bring action against the insurance firm, both through the state’s workers’ compensation commission as well as through the state court. He asserted claims for damages due to the insurance company’s “outrageous conduct.”

Ultimately, the insurance company conceded liability for the workers’ compensation claim, and reached a settlement with the plaintiff. However, in that settlement, the plaintiff preserved his right to sue for bad faith refusal to pay in both Mississippi and Alabama (he had been working in both states). He filed claims in both states, though both parties agreed to dismiss the Alabama claim. He proceeded with the claim in Mississippi.

The insurance company removed the case to federal court, and then was successful in obtaining a dismissal. The plaintiff appealed the dismissal.

The federal appellate court reversed the dismissal, finding that state law granted him the independent right to recover damages from an employer’s insurance company in cases where there had been a bad faith refusal to pay.

This right is reserved outside the workers’ compensation system, the court found, because it stems from an independent and intentional tortious action that occurs outside the scope of employment.

If you have been injured on the job in Atlanta, contact J. Franklin Burns, P.C., to speak with an experienced attorney. For a free consultation call 1-404-303-7770 today.

Additional Resources:
Williams v. Liberty Mutual Ins. Co., Jan. 28, U.S. Court of Appeals for the Fifth Circuit
More Blog Entries:
Atlanta Workers’ Compensation Claims: Injuries Must Arise From Employment, Jan. 14, 2014, Atlanta Workers’ Compensation Lawyer Blog