Background:
A.P. Concrete voluntarily paid Mariner partial workers’ compensation benefits following a work-related injury on June 29, 2001. The employer later filed a 21-day discontinuance. The employee filed a Petition for Review and a Provisional Order was entered, reinstating his benefits pending a hearing on the Petition. After hearing, a Decree was issued, granting the employee protection of the Act only and specifically provided that “the employer may cease payment of incapacity benefits as of the date of this decision”. The employer immediately stopped payment of benefits and the employee filed a Motion for Findings of Fact and Conclusions of Law, which was denied.
The employee filed a Petition for Assessment of Forfeiture with the Abuse Investigation Unit (AIU), arguing that it was improper for the employer to stop paying benefits while a Motion for Findings of Fact and Conclusions of Law was pending. The AIU agreed and assessed the employer a penalty of $1,600. The AIU reasoned that payments made pursuant to a Provisional Order are payments pursuant to “an order or award of compensation or compensation scheme” that must continue until the matter has been finally resolved, including appeal proceedings and Motions for Findings of Fact and Conclusions of Law (see 39-A M.R.S.A. §205(9)(b)(2)). The employer appealed.
Court ruling:
The Court unanimously overruled the decision of the AIU. According to the Court, a205(9)(b)(2) “order or award of compensation or compensation scheme” is one that is entered only after formal proceedings have been initiated and the parties have either reached an agreement or the matter has been decided by a hearing officer. The Court then reasoned that a Provisional Order is only in place pending a hearing and that until then there has been no formal agreement or finding by the hearing officer that the employer is liable to pay benefits.
In support of its decision, the Court looked to legislative history and the policy behind the “pay without prejudice” provisions of Section 205(9)(b)(1). The Court noted that the purpose of that Section was to encourage employers to voluntarily pay benefits without litigation. The Court was concerned that employers would be less likely to voluntarily pay benefits without prejudice if they could be looking at paying all the way through appeal, especially in cases like this where there was never a formal agreement or decree finding that the employer was responsible for paying benefits. The Court also was concerned that hearing officers may be reluctant to enter Provisional Orders out of concern that they would be creating a long-term obligation for the payment of benefits that may never be determined to be owed.