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A new WCAB en banc decision in the case of Luis Martinez vs Ana Terrazas held that a medical-legal lien claimant cannot avoid the lien activation fee by pursuing their fees as “costs” under Labor Code 5811.

On April 18, 2011, applicant Luis Martinez resolved his claim against Ana Terrazas and Allstate Insurance Company by compromise and release. On August 8, 2011, New Age filed a lien for copying and related expenses. The billings submitted with the lien show that the expenses claimed were for subpoenaing and copying various records at the request of applicant’s attorney, namely: (1) the records of applicant’s employer on September 28, 2009, (2) the records of Dr. Zaragaff on October 12, 2009, (3) the records of the U.S.C. Medical Center on September 21, 2009, (4) the records of the Law Office of Lionel Quiroz on September 16, 2009, (5) the records of the WCIRB on July 26, 2010,3 and (6) the records of Specialty Risk Services (defendant’s claims administrator) on June 16, 2011.

After January 1, 2013, the effective date of Senate Bill 863 but prior to any lien proceedings, New Age withdrew its lien and in lieu of it filed a petition for costs under Labor Code section 5811 for the same expenses it previously sought to recover by its lien, apparently in an attempt to avoid payment of a lien activation fee under section 4903.06. The WCJ denied the petition for costs, determining that New Age could not “abrogate” its obligation to pay the lien activation fee. New Age appealed.

The WCAB in the en banc decision held that section 5811 “costs” do not include costs and expenses that are governed by other specific statutory schemes. The Legislature has established an extensive statutory scheme for claimed medical-legal expenses. In light of the specific statutory framework established by the Legislature for pursuing claims of medical-legal expenses, the WCAB concluded that medical-legal expenses cannot be sought through the filing of a petition for costs under section 5811. “[I]t would be an abuse of discretion to permit medical-legal expenses to be claimed under section 5811.”

“However, given the uncertainty in the law when New Age withdrew its lien and given that its lien was never formally dismissed, we will deem its lien reinstated. This reinstatement principle shall be applied to lien claimants in other cases who withdrew their liens and filed petitions for costs on or before the issuance date of this decision, if their liens have not been dismissed.”

The WCAB went on to note that although “the case presently before us relates to copy service expenses claimed through a medical-legal lien filed before January 1, 2013 under former section 4903(b), we emphasize that this holding applies to all medical-legal expense claims, regardless of: (1) whether a pre-January 1, 2013 lien was filed; (2) when the claimed medical-legal expenses might have been incurred; or (3) the nature of the medical-legal expenses claimed.”