I have been contacted by a couple of respected copy service companies asking my thoughts about the injured worker’s “independent right to discovery.” I think the concept being inferred is that injured workers and their attorneys should have a right to ANY and ALL discovery they feel might support their case, with very few limitations. This concept is coming up because some of my past posts at ScanFiles.com have discussed how the DWC’s new Copy Service Fee Schedule LIMITS when the applicant’s discovery is payable by the defendant.
RIGHT TO DISCOVERY VS THE RIGHT TO HAVE THE DEFENDANT PAY FOR THE DISCOVERY
There is NO QUESTION in my mind that applicant attorneys have a right to subpoena ANY and ALL records that they have a mind to request from their chosen copy service. In other words, I believe there are very few limits on what an applicant attorney can subpoena as far as discovery on his/her case. What the Legislature enacted in Labor Code 5307.9, and what the DWC has taken even further in CCR 9980 through 9983, is LIMIT when such discovery is PAYABLE by the defendant.
This is a BIG distinction, and what I want to discuss today.
Applicant’s right to discovery is regulated by Labor Code Section 5710, which incorporates the California Code of Civil Procedure at Title 4, Part 4, commencing with Section 2016.010. We also have CCR 10530, which the WCAB enacted many years ago and regulates the use of Subpoenas. The body of law contained in these Code Sections and regulations are what REGULATES the applicant’s right to “Independent Discovery“, and it’s fairly BROAD. In other words, if an applicant’s attorney wants to obtain a copy of some records on a case and everything is done according to the procedures in the above sections then that discovery is VALID and permissible. The only question is who has to pay for it…
Applicant’s discovery that is PAYABLE by the defendant is regulated by Labor Code Section 5307.9, the DWC’s Fee Schedule at CCR 9980 through 9983, the medical-legal expense tracks and limitations of Labor Code Sections 4620 through 4622, and finally the WCAB’s CCR 10451.1, which further interprets and defines the collection procedures for medical-legal expenses.
These are two entirely separate concepts.
EFFECT OF APPLICANT ORDERING RECORDS NOT PAYABLE BY DEFENDANT
When an applicant law office orders discovery (records) from a copy service with the intent to have those services paid by the defendant (as a medical-legal expense), the law office and the copy service are RESPONSIBLE for knowing and following the procedures and LIMITATIONS contained in the DWC’s new Fee Schedule Regulations, CCR 9980 through 9983. When the law office and copy service FAIL to stay within the limitations and procedures contained therein it causes friction, costs, and delays for the other parties involved in managing that case, from the Claims Adjuster to the Defense Attorney, the Judge, and of course the Copy Service. The applicant attorney may get his/her records they wanted, but it is literally at the expense of everybody else in the system when this is not done properly.
The friction/costs/delays I’m talking about come from the fact that the defendant is not responsible for paying the expenses related to discovery performed OUTSIDE of the DWC’s Fee Schedule regulations, and the copy service is not going to accept the denial of their requested FEES for their services without a fight. Therefore, the defendant (claims adjuster and defense attorney) have to respond to all the copy service’s collection efforts, paperwork, phone calls, filings, and appearances… and the Judge and the appeals board has to deal with the DISPUTE between the the copy service and the defendant – all because the discovery was unnecessarily requested AND performed OUTSIDE of the allowable guidelines of the DWC’s Copy Service Fee Schedule regulations.
Applicant-side providers (including copy services) are accustomed to having their invoices disputed by the defendant, and leaving those accounts receivable on the books for years until the case in chief has concluded. Once the case in chief has concluded and the provider is now a case party under CCR 10301(DD), THEN the provider can go to trial on their disputed issue(s). The reason I am raising these issues so strongly today is because I see a real problem coming YEARS from now, when copy services have MILLIONS in accounts receivable that they FINALLY realize are uncollectible because the applicant law office didn’t stay within the Fee Schedule guidelines when placing the orders. I fully expect those copy shops to eventually try to collect those receivables FROM THE APPLICANT LAW OFFICE, and the Judges in the system to be SO tired of dealing with copy services taking up the appeals board’s valuable resources trying to collect their improperly-ordered services that the Judges actually hold the ordering attorney responsible for those receivables (as LC 5813 sanctions). This has already happened.
The copy shops that are actively encouraging orders that fall outside the Fee Schedule regulations have their own internal motives for doing so, and are leading the whole industry down a dangerous path. Ordering law offices should not depend on the same people and relationships to be in place when the proverbial mountain of uncollectible copy service receivables finally parks itself in the appeals boards several years from now, and has to be adjudicated. Ordering law offices might THINK they are sloughing off responsibility for placing those orders on to somebody else, but that may not be the political environment in the future. Think about that…
I urge everybody to stay within the regulations and do so conservatively.
HOW TO EDUCATE THE LAW OFFICE AND COPY SERVICE STAFF ABOUT STAYING WITHIN THE DWC’S REGULATIONS
The DWC’s regulations are posted (click here) for all to read, but law offices and copy services can also read a blog post I authored a few weeks ago on ScanFiles.com. You can read that article here.
The injured workers’ right to “Independent Discovery” has NOT been limited by the Legislature or the DWC. The applicant’s attorney can still order ANY records they feel they need or want, and at any time during the case timeline up to the MSC. However, if the applicant intends to have the defendant pay for those services as a medical-legal expense, THEN those services must be REASONABLE and NECESSARY. This standard has ALWAYS been in place as Labor Code Section 4621(a), but now the DWC has published the legal definition of WHEN and HOW such “copy and related services” are reasonable and necessary. I think most people will find the limitations on ordering records are really not draconian or terribly one sided… the DWC simply wanted to make sure that RECORDS already available through the defendant were requested by the applicant’s attorney before incurring a duplicative expense by ordering the same records through an applicant copy service. If the defendant does not have those records, or fails to deliver the records within 30 days of a request, THEN the applicant law office is free to order those records from their own chosen copy service, and have those services paid by the defendant.
The applicant attorney can still order records outside of the DWC’s guidelines… but the applicant (or his/her attorney) will have to pay for those services out-of-pocket. Judges can (and HAVE) ordered applicant attorneys to pay for copy services that were incurred improperly, so this concept is not farfetched.
There are so many things working against copy services right now that I would urge all copy shop owners/CEOs to think long and hard before attempting to “swim upstream” of the DWC’s Fee Schedule regulations. The regs are cast and that ship has sailed. Now, it’s time for applicant copy services to concentrate on surviving long-term. I would bet that every Payer in the industry is currently setting up filters and checklists and training materials that will be used to deny and delay payment of copy service invoices that fail to comply with a very conservative interpretation of the Fee Schedule regulations. The future looks choppy to me as it relates to copy service cash flow unless the copy services and their applicant attorney customers take this seriously, and conservatively conform to the new regulations.