Understanding California Code of Regulations Section 10545: Petition for Costs in Workers’ Compensation Cases

In the workers’ compensation system, various costs may arise that are not typically recoverable as liens under Labor Code Section 4903. California Code of Regulations Section 10545 outlines the procedure for filing a Petition for Costs when seeking reimbursement for certain expenses or services. This regulation helps parties in a workers’ compensation case—such as employees, defendants, and interpreters—recover costs that otherwise might not be payable through the usual lien system.

At Yrulegui & Roberts, we assist claims adjusters, employers, and defense attorneys in understanding and navigating the complexities of cost reimbursement under Section 10545. Below, we will break down the key provisions and processes involved in filing a Petition for Costs.

Who Can File a Petition for Costs Under Section 10545?

A Petition for Costs is a formal request for reimbursement for expenses that are not allowed as liens against compensation. According to Section 10545(a), only the following parties are eligible to file a Petition for Costs:

1. Employees or the dependents of a deceased employee.
2. Defendants in a workers’ compensation case.
3. Interpreters, but only for services other than those rendered at a medical treatment appointment or medical-legal examination.

These limitations ensure that only specific types of costs are eligible for reimbursement through this petition process, as opposed to being claimed as liens under Labor Code Section 4903.

Key Provisions of Section 10545

1. Types of Reimbursable Costs:
   • An employee or their dependent may file a Petition for Costs to recover payments made directly to providers for medical-legal goods or services, subject to applicable fee schedules (Section 10545(c)). For instance, if an employee paid out-of-pocket for a medical-legal report or interpretation services that are not covered under the standard lien process, they can seek reimbursement through this petition.
   • An interpreter may file a Petition for Costs for services performed outside of medical treatment appointments or medical-legal examinations. These petitions must include specific information, such as the interpreter’s certification number or justification for using a non-certified interpreter (Section 10545(d)).
2. Pre-Petition Written Demand:
   • Before a Petition for Costs can be filed, the petitioner must serve a written demand for the costs on the defendant or other responsible party and wait at least 60 days (Section 10545(e)). The petition should include:
     • A copy of the written demand.
     • Proof of service of the demand.
     • Any response received from the defendant or responsible party.

If these steps are not followed, the petition may be dismissed for failing to comply with procedural requirements.

3. Filing Requirements:
   • The petition must be properly labeled as a “Petition for Costs” in the case caption (Section 10545(b)). This helps the Workers’ Compensation Appeals Board (WCAB) and the parties involved clearly identify the petition and its purpose.
4. Action by the WCAB:
   • The WCAB has discretion to issue a notice of intention to allow or disallow the costs requested in the petition, either in whole or in part (Section 10545(g)). The WCAB must give the parties at least 15 calendar days to file an objection if they disagree with the proposed action.
   • If no objection is filed or if the objection lacks merit, the WCAB may issue an order regarding the petition for costs or set the matter for a hearing if necessary.
5. Sanctions for Bad Faith Actions:
   • If the filing of a Petition for Costs, or failure to make good faith payments, is found to be in bad faith, the WCAB can impose monetary sanctions under Labor Code Section 5813 (Section 10545(h)). For bad faith actions, the sanctions must be no less than $500.00, and the WCAB may also award attorney’s fees and costs. This provision ensures that parties act in good faith when dealing with cost claims.

How Section 10545 Benefits Employers and Claims Adjusters

For employers and claims administrators, understanding Section 10545 is crucial when faced with requests for reimbursement from employees, dependents, or interpreters. Following this regulation helps manage costs that arise outside the standard lien process and ensures that only legitimate claims are paid.

• Preempting Cost Claims: If you receive a written demand for costs, acting promptly can help resolve the issue before it escalates into a formal petition. By reviewing the demand and making reasonable payments when appropriate, employers can avoid unnecessary litigation and potential sanctions.
• Defending Against Unwarranted Claims: If a Petition for Costs is filed without proper justification or does not follow the 60-day demand process, employers can file objections and seek dismissal of the petition for non-compliance.
• Sanctions for Bad Faith Petitions: Section 10545 allows employers to defend against bad faith cost claims by seeking sanctions, which can be an effective tool to deter frivolous or inflated petitions.

Conclusion

California Code of Regulations Section 10545 establishes a clear process for filing a Petition for Costs in workers’ compensation cases when reimbursement is sought for expenses that cannot be claimed as liens. Whether you are an employer, claims adjuster, or defense attorney, understanding this process helps manage costs efficiently and defend against unfounded claims.

At Yrulegui & Roberts, we help our clients navigate the complexities of workers’ compensation law, including defending against cost claims and ensuring compliance with procedural requirements. If you have received a written demand for costs or need to file a Petition for Costs, contact us today to learn how we can assist with your workers’ compensation defense strategy. We currently handle matters at all Boards in California!