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 Notice
of Claim Denial and Hearing Rights
(OAR 438-005-0055); Depositions
(OAR 438-006-0055); Attorney Fees
When a Claimant Requests a Hearing
on a Responsibility Denial (OAR 438-
015-0038); Attorney Fees When a
Claimant Requests Review by the Board
(OAR 438-015-0055); Attorney Fees
When Insurer or Self-insured Employer
Requests a Hearing (OAR 438-015-0065);
Attorney Fees When Insurer or Self-
Insured Employer Requests or Cross-
Requests Review by the Board
(OAR 438-015-0070); Attorney Fees in
Cases Involving ORS 656.262(11)(a)
(OAR 438-015-0110).

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WCB ADMIN. ORDER 1-2009
ORDER OF ADOPTION

            1.   On July 1, 2009, 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:  Notice of Claim Denial and Hearing Rights (OAR 438-005-0055); Depositions (OAR 438-006-0055); Attorney Fees When a Claimant Requests a Hearing on a Responsibility Denial (OAR 438-015-0038); Attorney Fees When a Claimant Requests Review by the Board (OAR 438-015-0055); Attorney Fees When Insurer or Self-Insured Employer Requests a Hearing (OAR 438-015-0065); Attorney Fees When Insurer or Self-Insured Employer Requests or Cross-Requests Review by the Board (OAR 438-015-0070); Attorney Fees in Cases Involving ORS 656.262(11)(a) OAR 438-015-0110).  Copies of the notice were distributed to the Oregonian, the Associated Press, and the Capitol Press in the Capitol Press Room on July 7, 2009.  The notice was published in the Secretary of State's August 2009 Administrative Rule Bulletin.

            On July 14, 2009, notice of this hearing was posted on the Board's website at:  http://www.cbs.state.or.us/external/wcb/wcbrule/rules.htm.  On July 14, 2009, 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 July 2009 issue of the Board's News and Case Notes, which was posted on the Board's website in early August 2009.

            Thereafter, in accordance with the notice, a public hearing was conducted by Debra L. Young, Senior Staff Attorney, on August 28, 2009 at Salem, Oregon.  The record of the public hearing was closed at 5:00 p.m. on September 4, 2009.

            2.   No testimony was presented at the scheduled hearing.  Written comments were submitted by two 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.   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.

              House  Bill  3345 (HB 3345)  creates new provisions and  amends ORS 656.262, ORS 656.308, ORS 656.382, and ORS 656.386, which concern various provisions regarding assessed attorney fees available at hearing and on Board review.[1]  ORS 656.262(11)(a) is amended to increase the available assessed attorney fee for a carrier's unreasonable delay or refusal to pay compensation or unreasonable delay in acceptance or denial of a claim.  This assessed fee is increased from a maximum of $2,000 absent a showing of extraordinary circumstances to a maximum of $3,000 absent a showing of extraordinary circumstances.  In addition, ORS 656.262(11)(a) is amended to provide that the maximum attorney fee award "shall be adjusted annually on July 1 by the same percentage increase as made to the average weekly wage defined in ORS 656.211, if any."  HB 3345, § 1.

            ORS 656.308(2)(d) is amended to increase the available assessed attorney fee for a claimant's attorney's appearance and active and meaningful participation in finally prevailing against a responsibility denial.  This assessed fee is increased from a maximum of $1,000 absent a showing of extraordinary circumstances to a maximum of $2,500 absent a showing of extraordinary circumstances.  In addition, ORS 656.308(2)(d) is amended to provide that the maximum attorney fee award "shall be adjusted annually on July 1 by the same percentage increase as made to the average weekly wage defined in ORS 656.211, if any."  HB 3345, § 2.

            ORS 656.382(2) is amended to provide that the carrier shall be required to pay the claimant's attorney a reasonable attorney fee if the Administrative Law Judge (ALJ) or the Board find, through the assistance of an attorney, that an order rescinding a notice of closure should not be reversed or the compensation awarded by a reconsideration order under ORS 656.268 should not be reduced or disallowed.  HB 3345, § 3.

            ORS 656.386(3) adds a new provision for assessed attorney fees on claim reclassification.  If the carrier requests a hearing or Board review, and the ALJ or the Board finally determines that the claim should be classified as disabling, the ALJ or the Board are authorized to assess a reasonable fee.  HB 3345, § 5.

            These amendments to ORS 656.262, ORS 656.308, ORS 656.382, and ORS 656.386 apply to all claims for which an order is issued on or after January 1, 2010, the effective date of the Act.  HB 3345, § 6.

            Pursuant to ORS 656.388(4), the Board's schedule of attorney fees must be established after consultation with the Board of Governors of the Oregon State Bar.  On July 10, 2009, the Board referred the proposed rule amendments implementing HB 3345 to the Board of Governors for their consideration.  On August 31, 2009, the Board of Governors submitted written notice that they considered the proposed amendments appropriate.

            For the reasons explained in the Board's June 30, 2009 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 438-005-0055(1), (2)

HB 3345 amends ORS 656.262 to adopt a new provision, ORS 656.262(12), which provides for the Director to assess penalties and attorney fees for untimely payment of disputed claim settlements.  As a result of this new provision, the remaining section numbers in ORS 656.262 are renumbered accordingly.  The rules regarding notice of claim denial and hearing rights (OAR 438-005-0055(1), (2)) cite ORS 656.262(14), which has been renumbered as ORS 656.262(15).  The Board proposed to amend OAR 438-005-0055(1), (2) to reflect this statutory change.  In response to this proposal, the Board has received no concerns to this amendment.

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 438-006-0055

As addressed above, HB 3345 amends ORS 656.262 to adopt a new provision, ORS 656.262(12), which results in the renumbering of the remaining section numbers in ORS 656.262.  The rule regarding depositions (OAR 438-006-0055) cites ORS 656.262(13), which has been renumbered as ORS 656.262(14).  The Board proposed to amend OAR 438-006-0055 to reflect this statutory change.  In response to this proposal, the Board has received no concerns to this amendment.

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 438-015-0038

Consistent with the amendments to ORS 656.308(2)(d), the Board proposed to amend OAR 438-015-0038 to provide for an increased maximum attorney fee of $2,500 absent a showing of extraordinary circumstances for finally prevailing at hearing on a responsibility denial and to provide for annual adjustment on July 1 of that maximum fee by the same percentage increase as made to the average weekly wage defined in ORS 656.211.[2]  In response to this proposal, the Board has received no concerns to this amendment.

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 438-015-0055

Consistent with the amendments to ORS 656.308(2)(d), the Board proposed to amend OAR 438-015-0055 by specifying that section (4) concerns assessed attorney fees on Board review regarding compensability denials and by adding section (5) to address assessed attorney fees on Board review regarding responsibility denials.  Section (5) provides for an increased maximum attorney fee of $2,500 absent a showing of extraordinary circumstances for finally prevailing on Board review on a responsibility denial and to provide for annual adjustment on July 1 of that maximum fee by the same percentage increase as made to the average weekly wage defined in ORS 656.211.[3]  In response to this proposal, the Board has received no concerns to this amendment.

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 D and incorporated by this reference.

OAR 438-015-0065

Consistent with the amendments to ORS 656.382(2), the Board proposed to amend OAR 438-015-0065 (which provides for assessed attorney fees when a carrier requests a hearing and the claimant prevails) by listing the available assessed attorney fees under separate sections.  Section (1) provides that the ALJ shall award a reasonable assessed fee if the carrier requests a hearing or otherwise seeks a reduction in compensation and the ALJ finds that the compensation awarded to the claimant should not be disallowed or reduced.  Section (2) provides that the ALJ shall award a reasonable assessed fee if the carrier requests a hearing on a reconsideration order rescinding a notice of closure and the ALJ finds that the reconsideration order should not be reversed.  Section (3) provides that the ALJ shall award a reasonable assessed fee if the carrier requests a hearing on a reconsideration order and the ALJ finds that the compensation awarded by the reconsideration order should not be reduced or disallowed. 

Finally, consistent with the amendments to ORS 656.386(3), the Board proposed to add section (4) to provide that, if the carrier requests a hearing on a claim reclassification order from the Workers' Compensation Division and the ALJ finally determines that the claim should be classified as disabling, the ALJ "may award a reasonable assessed fee."  In response to this proposal, the Board has received no concerns to this amendment.

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.

OAR 438-015-0070

Consistent with the amendments to ORS 656.382(2), the Board proposed to amend OAR 438-015-0070 (which provides for assessed attorney fees when a carrier requests or cross-requests review and the claimant prevails) by listing the available assessed attorney fees under separate sections.  Section (1) provides that the Board shall award a reasonable assessed fee if the carrier requests or cross-requests review of the ALJ's order and the Board finds that the compensation awarded to the claimant should not be disallowed or reduced.  Section (2) provides that the Board shall award a reasonable assessed fee if the carrier requests or cross-requests review of the ALJ's order regarding a reconsideration order rescinding a notice of closure and the Board finds that the reconsideration order should not be reversed.  Section (3) provides that the Board shall award a reasonable assessed fee if the carrier requests or cross-requests review of the ALJ's order regarding a reconsideration order and the Board finds that the compensation awarded by the reconsideration order should not be reduced or disallowed. 

Finally, consistent with the amendments to ORS 656.386(3), the Board proposed to add section (4) to provide that, if the carrier requests or cross-requests review of the ALJ's order on a claim reclassification order from the Workers' Compensation Division and the Board finally determines that the claim should be classified as disabling, the Board "may award a reasonable assessed fee."  In response to this proposal, the Board has received no concerns to this amendment.

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 438-015-0110(3)

Consistent with the amendments to ORS 656.262(11)(a), the Board proposed to amend OAR 438-015-0110(3) to provide for an increased maximum attorney fee of $3,000 absent a showing of extraordinary circumstances if the carrier is found to have unreasonably delayed or refused to pay compensation or unreasonably delayed acceptance or denial of a claim.  In addition, the Board proposed to provide for annual adjustment on July 1 of that maximum fee by the same percentage increase as made to the average weekly wage defined in ORS 656.211.[4]  In response to this proposal, the Board has received no concerns to this amendment.

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.

4.   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, 2010.  The amendments are applicable as follows:

Amendments to OAR 438-005-0055 apply to all notices of claim denial issued on or after January 1, 2010.

Amendments to OAR 438-006-0055 apply to all depositions taken on or after January 1, 2010.

Amendments to OAR 438-015-0038, OAR 438-015-0055, OAR 438-015-0065, OAR 438-015-0070, and OAR 438-015-0110 apply to all claims for which an order is issued on or after January 1, 2010.

            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] HB 3345 also amends ORS 656.262 to adopt a new provision, ORS 656.262(12), which provides for the Director to assess penalties and attorney fees for untimely payment of disputed claim settlements.  In addition, HB 3345 amends ORS 656.385(1), which provides for assessed attorney fees for various matters that are in the Director's jurisdiction.  These rule amendments do not address the changes to ORS 656.262(12) and ORS 656.385(1), which concern matters that are subject to the Director's (Workers' Compensation Division) jurisdiction.

[2] The Director, through the Workers' Compensation Division, will make this annual adjustment calculation.

[3] The Director, through the Workers' Compensation Division, will make this annual adjustment calculation.

[4] The Director, through the Workers' Compensation Division, will make this annual adjustment calculation.