BEFORE THE WORKERS' COMPENSATION BOARD OF
THE STATE OF OREGON
In the Matter of the Adoption of
Permanent Amendments to the
Rules of Practice and Procedure for
Contested Cases Under the Workers'
Compensation Law, Relating to Filing and
Service of Documents; Correspondence
(OAR 438-005-0046); Notice of Claim
Acceptance and Hearing Rights Under
ORS 656.262(6)(d) (OAR 438-005-0050);
Notice of Claim Denial and Hearing Rights
(OAR 438-005-0055); Acknowledgment;
Notice of Conference and Hearing
in Ordinary Hearing Process
(OAR 438-006-0020); Representation by
Counsel (OAR 438-006-0100); Settlement
Stipulations (OAR 438-009-0005); Disputed )
Claim Settlements (OAR 438-009-0010);
Claim Disposition Agreements; Form
(OAR 438-009-0020); Required Information
in a CDA (OAR 438-009-0022); Claim
Disposition Agreements; Processing
(OAR 438-009-0025); Postcard Announcing
CDA Approval Order (OAR 438-009-0028);
Claim Disposition Agreements; Stay of
Other Proceedings; Payment of Proceeds
(OAR 438-009-0030); Reconsideration
of Claim Disposition Agreements
(OAR 438-009-0035); Briefs and Other
Documents (OAR 438-011-0020);
Temporary Disability Compensation
(OAR 438-012-0035); Attorney Fees;
Costs Bills; Attorney Fee Liens
(Division 015); Attorney Fees/Definitions
(OAR 438-015-0005); Cost Bill Procedures
(OAR 438-015-0019); Attorney Fee
Lien Procedures (OAR 438-015-0022);
Attorney Fees in Own Motion Cases
(OAR 438-015-0080); Mediation/
Confidentiality (OAR 438-019-0030).

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WCB ADMIN. ORDER 1-2007
ORDER OF ADOPTION

         1.  On October 15, 2007, the Workers' Compensation Board filed a Notice of Proposed Rulemaking hearing with the Secretary of State, giving notice of its intent to amend permanent rules of practice and procedure relating to:  Filing and Service of Documents; Correspondence (OAR 438-005-0046); Notice of Claim Acceptance and Hearing Rights Under ORS 656.262(6)(d) (OAR 438-005-0050); Notice of Claim Denial and Hearing Rights (OAR 438-005-0055); Acknowledgment; Notice of Conference and Hearing in Ordinary Hearing Process (OAR 438-006-0020); Representation by Counsel (OAR 438-006-0100); Settlement Stipulations (OAR 438-009-0005); Disputed Claim Settlements (OAR 438-009-0010); Claim Disposition Agreements; Form (OAR 438-009-0020); Required Information in a CDA (OAR 438-009-0022); Claim Disposition Agreements; Processing (OAR 438-009-0025); Postcard Announcing CDA Approval Order (OAR 438-009-0028); Claim Disposition Agreements; Stay Of Other Proceedings; Payment Of Proceeds (OAR 438-009-0030); Reconsideration Of Claim Disposition Agreements (OAR 438-009-0035); Briefs and Other Documents (OAR 438-011-0020); Temporary Disability Compensation (OAR 438-012-0035); Attorney Fees; Costs Bills; Attorney Fee Liens (Division 015); Attorney Fees/Definitions (OAR 438-015-0005); Cost Bill Procedures (OAR 438-015-0019); Attorney Fee Lien Procedures (OAR 438-015-0022); Attorney Fees in Own Motion Cases (OAR 438-015-0080); and Mediation/Confidentiality (OAR 438-019-0030).  Copies of the notice were distributed to the Oregonian, the Associated Press, and the Capitol Press in the Capitol Press Room on October 19, 2007.  The notice was published in the Secretary of State's November 2007 Administrative Rule Bulletin.

         On October 19, 2007, notice of this hearing was posted on the Board's website at:  http://www.cbs.state.or.us/external/wcb/wcbrule/rules.htm.  On October 26, 2007, copies of the notice, as well as the proposed rules, were also mailed to all interested parties whose names appear on the Board's mailing list.  Notice of the hearing was published in the October 2007 issue of the Board's News and Case Notes, which was posted on the Board's website in early November 2007.  On November 9, 2007, via e-mail, members of the Workers' Compensation Section of the Oregon State Bar were notified of publication of the October 2007 issue of the Board's News and Case, including a link to that document.

         Thereafter, in accordance with the notice, a public hearing was conducted by Debra L. Young, Senior Staff Attorney, on November 30, 2007 at Salem, Oregon.  The record of the public hearing was closed at 5:00 p.m. on November 30, 2007.

         2.  Seventeen individuals offered testimony at the scheduled hearing.  Written comments were submitted by 62 individuals.  Copies of the transcript of the public hearing and of all written comments received are available for public inspection and copying at the offices of the Board, 2601 25th St. SE, Suite 150, Salem, Oregon 97302-1280, during normal working hours from 8:00 a.m. to 5:00 p.m., Monday through Friday.

         3.  OAR 438-015-0050, OAR 438-015-0052.  At its December 6th meeting, the Members also discussed comments received in response to its proposed amendments to the aforementioned rules regarding attorney fees payable from Claim Disposition Agreements and Disputed Claim Settlements.  Those comments included:  the economic impact to attorneys representing workers under the current litigation system, including the present attorney fee structure for such agreements and settlements; the effect these circumstances were having on the recruitment, training, and retaining incoming attorneys into this area of the law; the impact this situation was having on workers' access to justice; the effect the proposed modification of the attorney fee rules would have on workers and their attorneys; the connection between the proposed amendments to the rule and the economic / representation problems presented by the proponents for the rule change; and requests that the Board refer this significant matter to an advisory committee (as was done when the rule was previously amended in 1998), which would include members representing the various participants in the workers' compensation system.  

         After conducting their deliberations, the members commented on the compelling testimony and written statements presented in support of the proposed amendment.  However, noting that other comments had expressed concern that the amendments had been proposed without the participation of an advisory committee (a practice that the Board had followed when the rule was previously amended), the members decided to defer further action on the rule. [1]   Instead, the Members decided to establish an advisory committee composed of individuals representing the various participants in the workers' compensation system.  This committee, which would be chaired by an ALJ, would be charged with conducting a review of the proposed amendments, including the comments already received, as well as further available data regarding the subject matter.  Considering the significance of this issue, the Members further agreed that the advisory committee would have a 90-day period within which to submit its report.  Thereafter, the Members intended to return this attorney fee matter to their meeting agenda.

         4.  Order of Adoption for Rules (Exhibits A through G).  The Board has thoroughly reviewed and considered all comments pertaining to its proposed permanent rules.  A written summary of the comments is also included in the record.

         Senate Bill 253 (SB 253) amends ORS 656.236 to extend the authority to approve or disapprove Claim Disposition Agreements (CDAs) from only the Board to also include an Administrative Law Judge (ALJ) who mediated the agreement.  The legislation becomes effective January 1, 2008.

         Senate Bill 404 (SB 404) amends ORS 656.386 and ORS 656.388 to adopt two new provisions.  First, ORS 656.386(2)(a) provides that, if a claimant finally prevails against a denial under ORS 656.386(1), the court, the Board, or the ALJ "may order payment of the claimant's reasonable expenses and costs for records, expert opinions and witness fees."  The reasonableness of these expenses and costs are determined by the court, the Board, or the ALJ and may not exceed $1,500, unless the claimant demonstrates extraordinary circumstances justifying payment of a greater amount.  ORS 656.386(2)(b), (2)(d).  Payments for these expenses and costs are to be made by the carrier and are in addition to the compensation payable to the claimant.  These amendments regarding expenses and costs apply to workers' compensation claims in which the order on the compensability of the claim denial has not become final on or before January 1, 2008, the effective date of the Act.  SB 404, § 2.

         Second, ORS 656.388(3) provides that an ALJ or the Board shall grant a lien for attorney fees out of additional compensation awarded or proceeds of a settlement under the following circumstances:  (1) after an injured worker signs an attorney fee agreement for representation on a claim made under Chapter 656; (2) additional compensation is awarded to the worker or a settlement agreement is consummated on the claim; and (3) it is shown that the attorney with whom the fee agreement was signed was instrumental in obtaining the additional compensation or settling the claim.  Such attorney fee lien shall be made in accordance with rules adopted by the Board governing the payment of attorney fees.  These amendments regarding attorney fee liens apply to all claims in which an order that grants attorney fees is issued after January 1, 2008, the effective date of the Act, regardless of the date of injury.  SB 404, § 4.

         The Board appointed an advisory committee to consider amendments to its rules resulting from SB 253. [2]   The Board also appointed an advisory committee to consider amendments to its rules resulting from SB 404. [3]   The Board also requested that this committee consider the need for any amendment to the briefing schedule extension rule (OAR 438-011-0020(3)).  After meeting to review these matters, the committees issued reports.  On September 24, 2007, at a public meeting, the Board accepted the reports and directed its staff to draft proposed amendments to its rules in response to these reports.  On October 10, 2007, at another public meeting, after reviewing drafts of amended rules addressing the legislation and considering comments expressed by practitioners (representing claimants and the SAIF Corporation) and the Ombudsman for Injured Workers, the Board proposed the adoption of permanent amendments.

         For the reasons explained in the Board's October 15, 2007 Statement of Need (incorporated by this reference), as well as those explained below, the Board has reached the following conclusions regarding the proposed amendments and rules, which are contained in Exhibits A through G (attached and incorporated by this reference).

OAR 438-005-0046

The Board proposed the adoption of amended subsection (1)(d), to provide that, if a settlement stipulation, Disputed Claim Settlement (DCS), or CDA results from a mediation, "filing" also includes the physical delivery of the "settlement or agreement and any accompanying documents" to the ALJ who mediated the settlement or agreement, regardless of location.  This proposed amendment is designed to further expedite the submission, review, and approval process for such agreements.  This proposed change results in renumbering current subsections (1)(d), (1)(e) and (1)(f)
as subsections (1)(e), (1)(f) and (1)(g), respectively.

At the rulemaking hearing, no comments were received regarding this proposed rule.  However, after reviewing the rule, the Board concluded that subsection (1)(d) should be revised to clarify that "filing" includes the physical delivery of the "the settlement stipulation, disputed claim settlement, or claim disposition agreement " to the ALJ who mediated the settlement or agreement, regardless of location, rather than using the less specific terms "settlement or agreement and any accompanying documents."  Therefore, as revised, section (1)(d) provides:  "If a settlement stipulation, disputed claim settlement, or claim disposition agreement results from a mediation, "filing" also includes the physical delivery of the settlement stipulation, disputed claim settlement, or claim disposition agreement to the Administrative Law Judge who mediated the settlement or agreement, regardless of location."

The Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that the proposed rule, as revised herein, is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit A and incorporated by this reference.

OAR 438-005-0050(2); OAR 438-005-0055(1), (2)

The Workers' Compensation Division has changed its telephone system so that its toll-free telephone number is available from all locations.  The Board proposed to amend the claim acceptance appeal rights in OAR 438-005-0050(2) and the claim denial appeal rights in OAR 438-005-0055(1) and (2) to list only the Division's toll-free telephone number, without limitation.

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit A and incorporated by this reference.

OAR 438-006-0020

OAR 438-006-0020 states that a "hearing shall be scheduled for a date that is within 90 days of the request for hearing and not less than ten days after mailing of a notice of hearing date."  However, the legislature has amended ORS 656.283(5)(a) to increase the "ten-day" prior notice required for a hearing to "at least 60 days."  See Or Laws 2005, ch 624, § 1.  Consequently, the Board proposed to amend the rule to provide that the hearing shall be scheduled not less than "60" days after mailing of a notice of hearing date. 

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B and incorporated by this reference.

OAR 438-006-0100(3)(a)

The Board proposed to change the references in subsection (3)(a) from "Rule 9.05 through 9.30" and "(Law Student Appearance Rules)" to "Rule 13.05 through 13.30" and "(Law Student Appearance Program)" to reflect renumbering and title changes in the Oregon Supreme Court rules.

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit B and incorporated by this reference.

OAR 438-009-0005(5)

The Board proposed to amend section (5) of the existing rule to simply state that a stipulation must provide "whether a claim disposition agreement in the claim has been filed."  In other words, the Board proposed deleting the phrase "for approval by the Board" from the existing rule.  The Board considered this amendment appropriate because, as a result of the amendments to ORS 656.236, the authority to approve a CDA now rests with the ALJ who mediated the agreement, as well as the Board Members.

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit C and incorporated by this reference.

OAR 438-009-0010(8)(a), (8)(b)

The Board proposed to amend section (8) of the existing rule to simply state that a DCS must provide "whether a claim disposition agreement in the claim has been filed."  In other words, for the reasons explained above in OAR 438-009-0005(5), the Board proposed deleting the phrase "for approval by the Board."  In addition, the Board further proposed to renumber that requirement as subsection (8)(a) and to renumber as subsection (8)(b) the existing requirement that the DCS shall be in a separate document from a CDA.

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit C and incorporated by this reference.

OAR 438-009-0020, (3), (4), (4)(a)

Consistent with the amendments to ORS 656.236, the Board proposed to amend the rule to provide that a CDA is filed "with the Board" for approval "by the Administrative Law Judge who mediated the agreement or the Board Members."  The Board proposed to amend section (3) to modify the "Order" language for the CDA to include "20    ," and to include a signature line for the "Administrative Law Judge who mediated the agreement."  The Board proposed to amend section (4) to extend the authority for sending "addendum letters" (if the CDA submitted for approval lacks any information required by section (1)) to the ALJ who mediated the CDA. 

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit C and incorporated by this reference.

OAR 438-009-0022

In accordance with SB 583, the Board proposed to amend subsection (3)(f) to no longer require the inclusion of the worker's social security number in a CDA.  As a result, the remaining subsections will be renumbered accordingly. 

The Board also proposed to amend the language in subsection (4)(h) to modify the required "Notice to Claimant" to:  (1) include a provision acknowledging that the ALJ who mediated a CDA is also involved in the approval/rejection process; (2) include the Board's toll-free telephone number and update the Board's zip code; and (3) update the Ombudsman's address and toll-free telephone number.

At the rulemaking hearing, no comments were received regarding this proposed rule.  

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper. [4]   Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit C and incorporated by this reference.

OAR 438-009-0025(1), (2)

Consistent with the amendments to ORS 656.236, the Board proposed to amend section (1) to provide that a CDA is filed "with the Board" for approval "by the Administrative Law Judge who mediated the agreement or the Board Members."  The Board also proposed to amend section (1) to provide that a CDA may be filed in accordance with OAR 438-005-0046(1)(a) and (1)(d), which provide for the "filing" of a CDA (as well as a stipulation and DCS) by means of physical delivery to any permanently staffed office of the Board or the date of mailing (OAR 438-005-0046(1)(a)) or by physical delivery to the ALJ who mediated the agreement, regardless of location (OAR 438-005-0046(1)(d)).

The Board also proposed amending section (2) to provide that any CDA filed under section (1) is deemed submitted as of the date it is received by the ALJ who mediated the agreement or the Board and that all times are calculated from that date of receipt. 

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit C and incorporated by this reference.

OAR 438-009-0028(1), (2)(c), (3)

Consistent with the amendments to ORS 656.236, the Board proposed to amend these sections and subsections to clarify that, in addition to the Board, the ALJ who mediated the CDA is authorized to process postcards announcing the approval of a CDA.  Section (1) is further amended to provide that the ALJ who mediated the agreement may also physically deliver the postcards to the parties and their attorneys as prescribed in OAR 438-009-0030(6).  

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit C and incorporated by this reference.

OAR 438-009-0030(1), (2), (3), (4), (5), (6)(a), (6)(b), (7)

Consistent with the amendments to ORS 656.236, the Board proposed to amend section (1) (which provides that proceedings shall be stayed on receipt of a CDA) to extend to receipt by the ALJ who mediated the CDA, in addition to receipt by the Board.  Sections (2), (3), and (4) were proposed to be amended to authorize the ALJ who mediated the CDA, in addition to the Board, to provide notice of the receipt of a CDA to the Director, the parties, and the court, if a case is pending before that appellate forum.  Section (5) was proposed to be amended to authorize (in addition to the Board) the ALJ who mediated the CDA to issue a separate written decision approving or disapproving the CDA, should the ALJ wish to do so, with copies to the parties, their attorneys, and the Director.  Section (6) was proposed to be amended to provide that, "except as otherwise provided in section (5) of this rule," in addition to the signature of two Board members, the signature of the ALJ who mediated the CDA on the agreement constitutes a final order.  Subsections (6)(a) and (6)(b) were proposed to be amended to provide that notice of the approval may be provided by means of the mailing of postcards by the ALJ who mediated the agreement or the Board or by physical delivery of the postcards to the parties and their attorneys by the ALJ who mediated the agreement.  Section (7) was proposed to be amended to clarify that, unless otherwise provided in the agreement, payment of CDA proceeds shall be made no later than 14 days after notice of approval of the CDA has been mailed or provided under Section (5) or (6) to the parties; i.e., by the mailing of an order by the ALJ who mediated the CDA or the Board, by the mailing of a postcard by the ALJ who mediated the CDA or the Board, or by physical delivery by the ALJ who mediated the agreement.

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit C and incorporated by this reference.

OAR 438-009-0035(1), (2), (3)

Consistent with the amendments to ORS 656.236, the Board proposed to amend these sections to clarify that, in addition to the Board, the ALJ who mediated the CDA is authorized to reconsider a final CDA order and the procedures to follow when doing so.

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit C and incorporated by this reference.

OAR 438-011-0020(3)

As explained in its Statement of Need, the Board requested that the SB 404 advisory committee also consider the need for amendments to its briefing extension rule.  The advisory committee recommended that the following sentence be deleted from this rule:  "For purposes of this section, ‘extraordinary circumstances beyond the control of the party requesting the extension' shall not include the press of business."  After conducting their deliberations, the majority of the Board proposed amendment of the rule consistent with the committee's recommendation.  In doing so, the Members encouraged the submission of further public comment regarding the rule and possible alternative versions.

Two comments were received at the rulemaking hearing.  One comment favored the proposed amendment because "the press of business is a valid reason to extend the briefing schedule in some instances."  Another comment opposed the amendment, expressing concern that claimants might be harmed by further delay when their benefits were stayed pending the outcome of litigation.

After considering the comments and consistent with the reasoning expressed in its Statement of Need that agreed with the advisory committee's recommendation, the majority of the Board decided to adopt the proposed amendment. [5]

The Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit D and incorporated by this reference.

OAR 438-012-0035(6)

The Supreme Court has ruled that the Board lacks statutory authority to suspend temporary disability under its Own Motion authority in ORS 656.278.  Jordan v. SAIF, 343 Or 208 (August 30, 2007).  Because OAR 438-012-0035(6) addresses suspension of temporary disability in Own Motion claims, the Board proposed deleting section (6) of this rule.

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit E and incorporated by this reference.

Division 015

Consistent with the amendments to ORS 656.386 and ORS 656.388, the Board proposed to include new rules in Division 015 regarding "Cost Bills" and "Attorney Fee Liens."  These proposed additions result in changing the title of Division 015 from "Attorney Fees" to "Attorney Fees; Cost Bills; Attorney Fee Liens."

At the rulemaking hearing, one comment suggested referring to "Expense and Cost Bills," which would be consistent with the terminology used in the statute (ORS 656.386(2)).  Because "cost bill" is defined by proposed OAR 438-015-0005(6) to encompass both expenses and costs, the Board adopted the proposed amendments.

The Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that the proposed rule title is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule title as a permanent change, contained in Exhibit F and incorporated by this reference.

OAR 438-015-0005(6), (7), (8)

Consistent with the amendments to ORS 656.386, the Board proposed amending section (6) to include in the definition of "costs" expenses incurred by the claimant or, if represented, the claimant's attorney.  At the rulemaking hearing, some comments were received regarding the definition, which noted that the statute refers to both expenses and costs.  At their meeting, the Members discussed these comments, as well as the proposition that the statute also refers to "records," which are not mentioned in the proposed rule.  The Members also observed that because the proposed rule is solely based on expenses and costs incurred by the claimant or claimant's attorney, a later reference in the rule to services to pursue a matter "on behalf of a party" was not necessary.  Finally, the Members agreed that, because an attorney represents a claimant, the rule could simply refer to "the claimant" (which would encompass both an unrepresented claimant and a claimant's duly retained attorney). 

After considering these matters, the Board decided to revise the proposed rule as follows:  "Expenses and [C]costs" reimbursable under ORS 656.386(2)(a) mean[s] reasonable expenses and costs incurred by [an] the claimant for things and services reasonably necessary to pursue a matter [on behalf of a party], but do not include attorney fees [paid to any attorney].  Examples of expenses and costs referred to include, but are not limited to, costs of [independent medical examinations] records, depositions, expert witness opinions, witness fees and mileage paid to execute a subpoena and costs associated with travel." 

Finally, because the definition has been changed from "costs" to "expenses and costs," its alphabetical order in the "definition" section has been altered from (6) to (8). 

As proposed, section (7) defines "cost bill" to mean a "sworn (or affirmed)" itemized statement of the amount of expenses and costs for records, expert opinions, and witness fees incurred as a result of the litigation involving a claim denial under ORS 656.386(1).  Some of the comments received at the rulemaking hearing questioned the requirement for a sworn or affirmed itemized statement, asserting that a signature was sufficient.  Other comments further noted that the proposed rule did not clarify that the itemized statement (the "cost bill") was from the claimant.

After considering these comments, the Board decided to revise the rule to remove the "sworn or affirmed" requirement.  In doing so, the Board decided that a claimant's or attorney's signature confirming that the claimed expenses and costs were incurred in the litigation of the denied claim was sufficient.  In addition, the Board chose to supplement the rule to clarify that the cost bill was furnished by the claimant.  Finally, as a result of the changes to the definition of "expenses and costs" (requiring its alphabetizing move to section (8) of the definitions), the Board stated that the definition of "cost bill" would now be located in section (6).

Regarding proposed section (8) (the definition of "denied claim"), the Board noted that the only proposed amendment was to change its current section (7) to (8).  Nevertheless, because changing "expenses and costs" resulted in moving that definition from section (6) to (8) (thereby moving the "cost bill" definition to section (6)), the Board determined that there was no longer an amendment to section (7) because the definition of "denied claim" would now remain in section (7). 

In conclusion, the Board finds for the reasons expressed in its Statement of Need, as well as those expressed herein, this amended rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this amended rule, contained in Exhibit F and incorporated by this reference.

OAR 438-015-0019

As amended, ORS 656.386(2) addresses the potential for payment by the carrier of "the claimant's reasonable expenses and costs for records, expert opinions and witness fees" if a claimant finally prevails against a denial under ORS 656.386(1).  Consistent with the amendments to ORS 656.386, the Board proposed the adoption of a rule to prescribe "cost bill" procedures for claiming and resolving any disputes regarding a claimant's award of reasonable expenses and costs.  

In response to its proposed amendments, the Board received a variety of comments.  These comments ranged from suggesting minor adjustments to the proposed procedures to eliminating the procedures and delegating the matter to the ALJ's discretion.  After considering these comments and other possible methods, the Board has decided to adopt a rule that implements the following cost bill procedures. [6]

If the parties stipulate to the specific amount of the reasonable expenses and costs incurred by claimant in the litigation of a denied claim, the ALJ or the Board order will specify the amount of such an award in the order finding that claimant finally prevails against a denied claim under ORS 656.386(1).  Section (2).  In absence of the parties' stipulation, the ALJ or Board order finding that claimant finally prevails against a denied claim under ORS 656.386(1) may award an unspecified reasonable award of expenses and costs, which the claimant may subsequently claim by submitting a cost bill to the carrier.  Id. 

The claimant is not required to submit a cost bill to the ALJ or the Board.  Instead, the claimant shall submit the cost bill to the carrier within 30 days after the order finding that claimant finally prevails against a denied claim under ORS 656.386(1) becomes final.  Section (3).  Unless the carrier disagrees with the reasonableness of the itemized expenses and costs in the cost bill, it must pay them within 30 days of its receipt.  Sections (4), (5).  If the cost bill is disputed, a party may request a hearing for resolution of the dispute.  The ALJ's resolution of that dispute will be made by a final, appealable order.  Finally, as explained above in the section addressing OAR 438-015-0005, because an attorney represents a claimant, the rule refers to "the claimant" (which encompasses both an unrepresented claimant and a claimant's duly retained attorney).

In selecting this method, the Board noted that the initially proposed procedure required the filing of cost bills and responses in every case involving a denied claim.  Concerns were raised that such a process could delay the issuance of a final order regarding the merits of the denied claim issue.  The Board also discussed that approximately 40 percent of denials are overturned and that (considering the collegiality of the workers' compensation bar) it was reasonable to expect that most cost bills would likely not
result in a dispute. 

Under such circumstances, the Board concluded that its chosen method was a more practical approach for processing cost bills when a claimant finally prevails over a denied claim.  The Board also reasoned that for those limited claims when a dispute arose over a cost bill, a resolution process would be available. 

In reaching their conclusion, the Members acknowledged that the advisory committee had recommended another approach that resolved cost bill issues in conjunction with the same proceeding / litigation order as the denied claim.  Although appreciative of the committee's efforts and observations, which were valuable and seriously considered, the Board determined that, for the reasons previously discussed, the method ultimately chosen was the preferred approach. 

Based on the reasoning discussed herein, the Board finds that this revised rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this rule as contained in Exhibit F, and incorporated by this reference.

OAR 438-015-0022(1), (2), (3), (4), (5), (6)

As amended, ORS 656.388(3) addresses the potential for an attorney fee lien out of additional compensation awarded under Chapter 656 or out of the proceeds of a consummated settlement agreement, provided that specific requirements are satisfied by the attorney seeking the lien.  ORS 656.388(3) also provides that such a lien shall be granted by the ALJ or the Board "in accordance with rules adopted by the board governing the payment of attorney fees."  Consistent with the amendments to ORS 656.388, the Board proposed the adoption of OAR 438-015-0022.

Section (1) of the proposed rule provides that copies of the notice of potential attorney fee lien must be simultaneously provided to the claimant and, if there is litigation pending, to the appropriate litigation forum (the Hearing Division, the Board, or
"the court").

A comment noted that the rule should not extend to court procedures and, also, that the statutory amendments to ORS 656.388 confer authority over potential attorney fee liens to the Board or an ALJ.  After considering this comment, the Board agreed that deletion of the reference to "the court" in section (1) was appropriate.

Another comment suggested that a reasonable time limit be imposed for the filing of the proposed lien (e.g., 30 days from the date of the termination of the "attorney-client" relationship).  Yet, ORS 656.388(3) does not provide for any specific time limit for the former attorney to file such a lien.  See SB 404 §3.  Likewise, the proposed rule does
not impose such a time limit. 

Another comment suggested that the claimant or the carrier (in addition to the former attorney) be permitted to petition for resolution of a dispute over a notice of potential attorney fee lien.  This comment reasoned that extending such permission to all participants in a particular claim or settlement agreement could expedite the resolution of the matter.  Following discussion, the Board agreed with this suggestion.  Consequently, the first sentence in section (4) is revised to read:  "If the notice of potential attorney fee lien is disputed, the former attorney, the claimant, the insurer, or the self-insured employer may file a petition for resolution of the lien dispute with the forum where litigation involving the claim is pending or, if there is no pending litigation, with the Hearings Division."

As proposed, section (5) provides the claimant and the carrier with not less than seven days to respond to the petition for resolution of a potential attorney fee lien dispute and provides the former attorney with not less than seven days to reply to the responses.  Based on the revisions to section (4), all participants may petition for resolution of a dispute over a notice of potential attorney fee lien.  Consistent with that revision, the Board agreed to revise the first sentence of section (5) to read:  "If a petition for resolution of a potential attorney fee lien dispute is filed, the respondent(s) shall be provided not less than seven days to respond to the petition."

A comment suggested that the other parties to the dispute be allowed a specific time period (e.g., ten days) to respond to the petition.  However, after considering the matter, the Board decided not to revise the proposed rule as suggested.  In doing so, the Board reasoned that the proposed version provides a reasonable minimum time line for a response (not less than seven days), but also allows discretion to allow more time, if necessary.

The Board finds for the reasons expressed in its Statement of Need, and those discussed herein, that the proposed rule, as revised herein, is reasonable, necessary, and proper.  Accordingly, the Board adopts this rule as a permanent rule, contained in Exhibit F and incorporated by this reference.

OAR 438-015-0080(1), (2)

OAR 438-015-0080 provides for attorney fees in Own Motion cases.  Sections (1) and (2) concern attorney fees payable out of increased temporary disability compensation for Own Motion cases.  The Board proposed to amend the language in sections (1) and (2) to make it consistent with the language regarding attorney fees payable out of increased temporary disability compensation for "regular" cases; i.e., cases are not in Own Motion status.  OAR 438-015-0045, OAR 438-015-0055.  Specifically, the Board proposed to amend sections (1) and (2) to provide that "out-of-compensation" attorney fee payable from increased temporary disability compensation should be "25 percent of the increased compensation, but not more than $1,500."  Currently, sections (1) and (2) contain the $1,500 maximum out-of-compensation fee, but they do not include the 25 percent limitation.  Although the Board has applied the "regular" and Own Motion rules for out-of-compensation attorney fees regarding increased temporary disability compensation consistently, these proposed changes will make the language consistent, which will avoid potential confusion.  Timothy Ledbetter, 58 Van Natta 906 (2006).

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit F and incorporated by this reference.

OAR 438-015-0080(5), (6), (7), (8)

The Board proposed to delete subsections (5), (6), (7), (8) because they concern "post-aggravation rights" new or omitted medical condition claims that were previously subject to the Board's Own Motion jurisdiction.  As a result of the 2005 statutory amendments, jurisdiction over such claims rests with the Hearings Division in the first instance and, as such, the Board's Hearings Division and Board review attorney fee rules apply to such claims. 

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit F and incorporated by this reference.

OAR 438-019-0030(4)

The current version of section (4) provides that any mediation agreement that requires approval by the Board pursuant to ORS Chapter 656 and OAR Chapter 438 shall not be confidential.  Consistent with the amendments to ORS 656.236, the Board proposes to amend section (4) to clarify that this section also includes approval by the ALJ who mediated the CDA. 

At the rulemaking hearing, no comments were received regarding this proposed rule. 

The Board finds for the reasons expressed in its Statement of Need that the proposed rule is reasonable, necessary, and proper.  Accordingly, the Board adopts this proposed rule as a permanent rule, contained in Exhibit G and incorporated by this reference.

        5.  Under the authority granted by ORS 656.726(5), the Board finds that:

a.  All applicable rulemaking procedures have been followed; and

b.  The rules being adopted are reasonable, necessary and proper.

        PURSUANT TO THE AMERICANS WITH DISABILITIES ACT GUIDELINES, ALTERNATIVE FORMAT COPIES OF THE RULES WILL BE MADE AVAILABLE TO QUALIFIED INDIVIDUALS UPON REQUEST TO THE BOARD.

        Consequently, in accordance with its Notice of Proposed Rulemaking, the Board adopts the attached rules, as set forth in Exhibits "A" through "G" incorporated herein by this reference, as permanent rules of the Workers' Compensation Board, to become effective January 1, 2008.  The amendments are applicable as follows:

Amendments to OAR 438-005-0046, OAR 438-009-0020, OAR 438-009-0022, OAR 438-009-0025, OAR 438-009-0028, OAR 438-009-0030, and OAR 438-009-0035 apply to all claim disposition agreements filed on or after January 1, 2008.

Amendments to OAR 438-005-0050 and OAR 438-005-0055 apply to all notices of claim acceptance and notices of claim denial issued on or after January 1, 2008.

Amendments to OAR 438-006-0020 and OAR 438-006-0100 apply to all cases pending before the Hearings Division on or after January 1, 2008.

Amendments to OAR 438-009-0005 apply to all settlement stipulations filed on or after January 1, 2008.

Amendments to OAR 438-009-0010 apply to all disputed claim settlements filed on or after January 1, 2008.

Amendments to OAR 438-011-0020 apply to briefing extension requests filed on or after January 1, 2008.

Amendments to OAR 438-012-0035 and OAR 438-015-0080 apply to all Own Motion claims existing on or after January 1, 2008.

Amendments to OAR 438-015-0005 and OAR 438-015-0019 apply to all claims in which the order on compensability of the claim denial has not become final on or before January 1, 2008.

Amendments to OAR 438-015-0022 apply to all claims in which an order that grants attorney fees is issued after January 1, 2008, regardless of the date of injury.

Amendments to OAR 438-019-0030 apply to all mediations pending on or after January 1, 2008. 

        The Board further orders that notice of this Order of Adoption, along with a certified copy of the amended rules, be filed with the Secretary of State and that a copy of the aforementioned notice and amended rules be filed with the Legislative Counsel within 10 days after filing with the Secretary of State as required by ORS 183.715.



[1] Members Kasubhai and Biehl expressed their willingness to adopt the proposed amendments as permanent rules.  In doing so, they explained that they were concerned about the diminishing number of experienced attorneys available to represent workers in an increasingly complex workers’ compensation system and, as such, those workers access to justice.  Nevertheless, because a majority of the membership favored referring the matter to an Advisory Committee, Members Kasubhai and Biehl agreed with such a proposal, with the understanding that this important matter would expeditiously return to the Board’s agenda following the Committee’s report (which would be coordinated by an ALJ and due within 90 days).

[2] Ronald Bohy, Claudette McWilliams, and Christopher Moore served on that committee.  The Members extend to the committee their grateful appreciation for their valuable participation in this endeavor.

[3] Martin Alvey, Ron Atwood, Steve Cotton, Randy Elmer, David Lipton, Chuck Mundorff, and Barbara Woodford served on that committee.  The Members extend to the committee their grateful appreciation for their valuable participation in this endeavor.

[4] In taking this action, the Board encourages parties and practitioners to clarify their intentions whenever they wish to have their CDA directed to the ALJ who mediated their agreement.  As examples, they could physically deliver or mail the CDA to the ALJ at the ALJ’s permanent office, include a cover letter expressing the parties’ intention, or notify the CDA Coordinator via telephone.  Each of these methods will assist the WCB staff in processing the proposed CDA as expeditiously as possible.

[5] Member Langer voted against the proposed amendment, reasoning that there was nothing wrong with the current version of the rule or its application.  Member Langer believed that the current version of the rule (which was consistent with the Federal Rules of Appellate Procedure) should be retained.  She expressed concern that the proposed amendment was inconsistent with the statute and, considering the rule’s history, could make the rule inconsistent and vague.

[6] Members Lowell and Langer voted against the adoption of this revised method for processing cost
bills.  Noting that this approach was not resolving the cost bill matter in the same proceeding / litigation order as
the denied claim, they were concerned that this method could lead to more litigation and further delay the dispute resolution process.  Moreover, Members Lowell and Langer noted that the revised method was significantly different than the approach that the Board had previously proposed, which had also been consistent with the recommendation from the Board’s administrative rule advisory committee.