Insurance Recovery Group, Inc. has achieved another notable victory using its focused second injury fund appellate practice. This victory has a value to our clients alone in excess of $600,000 for existing claims, but will impact companies and employers in the state by driving more timely settlements.
In June, based on IRG's appeal, the Massachusetts Reviewing Board took the exceptional step of overruling a previous decision and ordering the payment of interest on second injury fund claims. The Reviewing Board's original decision that interest did not apply was based on the application of the doctrine of sovereign immunity- that is, the government is not subject to interest assessment because the sovereign can not be sued.
In IRG's appeal, we vigorously dissented to the application of this doctrine saying we were not dealing with the state acting as the state but rather as a trustee of moneys paid by employers upon the hiring an impaired worker who later becomes disabled. This time, the Reviewing Board agreed with us, and further, acknowledged that the reasoning for its previous decision was "flawed".
There were two key quotes in the decision:
"The imposition of Sec. 50 interest serves the policy of encouraging early resolution and settlement".
"It only makes sense that there should be financial motivation for the Trust Fund to promptly pay meritorious Section 37 petitions".
The court went on to note that "The benefits to employers from the Section 37 reimbursement- the appropriate downward adjustment to experience modification - can be entirely lost when petitions languish in the system for years."
We look forward to using this development on behalf of all our clients as a financial incentive to the Fund to adopt the practice of responsible and timely adjustment of Section 37 claims.