State Compensation Insurance Fund v. Workers' Compensation Appeals Board

Opinion

ROUSE, J.

Petitioner, State Compensation Insurance Fund,

is the

insurance carrier for the Alameda-Contra Costa Transit District, which employs respondent Preston McDowell, the injured employee here involved, Petitioner seeks review and annulment of an en banc decision of the Workers’ Compensation Appeals Board (hereafter Board) denying credit for medical-legal costs against petitioner’s liability for compensation after the employee had settled a suit against a third party for his injuries. The majority of the Board concluded that the Legislature did not intend to include medical-legal costs within the meaning of section 3861 of the Labor Code. Three dissenting members were of the opinion that

Adams

v.

Workers’ Comp. Appeals Bd.

(1976) 18 Cal.3d 226 [133 Cal.Rptr. 517, 555 P.2d 303], was controlling and should have been followed by the Board. We agree that

the Adams

case is controlling.

[138]

Section 3861 of the Labor Code provides that “The appeals board is empowered to and

shall

allow, as a credit to the employer to be applied

against his liability for compensation,

such amount of any recovery by the employee for his injury, either by settlement or after judgment, as has. not theretofore been applied to the payment of expenses or attorneys’ fees, pursuant to the provisions of Sections 3856, 3858, and 3860 of this code, or has not been applied to reimburse the employer.” (Italics added.)

Adams

involved the question of whether the penally provisions of section 5814 of the Labor Code applied to medical-legal costs. In