Saturday, June 04, 2005

Commonwealth Court Holds Board Should Not Have Reduced Subrogation Credit And Extended Time For Repayment Based On Financial Hardship

In Monessen, Inc. v. WCAB (Fleming) the Board affirmed the WCJ's determination that the workers' compensation carrier could recover its subrogation lien from the Claimant's indemnity payments. The Claimant presented no evidence of financial hardship in the event of suspension of benefits. The WCJ entered a suspension of benefits for 241.38 weeks for recovery of the lien.

However, the Claimant asserted financial hardship before the Board. The Board, without taking any evidence, reduced the insurer's credit to $80.00, extending the period for repayment to 494.30 weeks.

The Commonwealth Court reversed the reduction of the credit, holding the Board had no authority in fact or in law to grant less than a complete suspension of benefits. The Court distinguished Fahringer, McCarty & Grey, Inc. v. Workers’ Comp. Appeal Bd. (Green), 529 A.2d 56 (Pa. Cmwlth. 1987) (en banc) stating both there was no factual evidence of hardship presented before the WCJ and Fahringer did not involve subrogation under Section 319, which the Court said confers an absolute right to immediate repayment.

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