The Wilson Case: Flexible Catastrophe

• Publication year: 2022
• Author: JAMES COTTER, ESQ.

The Wilson Case: Flexible Catastrophe

JAMES COTTER, ESQ.

WALNUT CREEK, CALIFORNIA

As with most major changes to existing laws, when SB 863 was passed, practitioners had more questions than answers as to what it meant for their clients—and this was true for employers and injured workers alike.

One of the questions most debated was what to make of the "catastrophic" injury exception to the prohibition on permanent disability increases for psychiatric disorders arising out of a compensable physical injury. Employers long lobbied for clear limits on when impairment was to be increased, expressing a perception that many applicants were pleading sleep dysfunction, sexual dysfunction and psychiatric dysfunction as pro forma accompaniments to even the most garden variety of injuries. Even in cases where the medical evidence supporting such additions was thin or nonexistent, the regular pleading of these add-ons increased discovery costs, litigation costs and the time it took to resolve even basic cases. Often the addition of these allegations led to settlements that included some nuisance value in order to resolve the add-ons even where there was no substantial medical evidence supporting the pleadings. The Legislature itself stated, in enacting SB 863,

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that "the Legislature intends to eliminate questionable claims of disability...."

So, as part of the usual Frankenstein process of grafting together concessions and half-measures to create a law that no one will be entirely happy with, the Legislature enacted Labor Code section 4660.1 for injuries occurring on or after January 1, 2013. That statute set forth that:

there shall be no increases in impairment ratings for sleep dysfunction, sexual dysfunction, or psychiatric disorder, or any combination thereof, arising out of a compensable physical injury

but also excepted from that general bar any

catastrophic injury, including, but not limited to, loss of limb, paralysis, severe burn, or severe head injury.

The employer still owed treatment if applicant suffered compensable consequence psychiatric injuries from non-catastrophic physical injuries, but no additional permanent impairment was to be provided to the injured worker.

The Legislature was right, of course, to allow itself some flexibility, as there is general agreement that injuries probably exist that legitimately produce some additional psychiatric residual disability not covered by loss of limb, paralysis, severe burn or severe head injury. One does not need to be...