Commonwealth Court Rules the Security Fund Is Not Subject to Attorney‑Fee Assessments

In this case, the claimant and employer settled a 1998 work injury by Compromise and Release agreement. The employer agreed as part of the settlement, they would continue to pay for future medical treatment. Later, the employer filed a request for utilization review as to the  chiropractic treatment the claimant received. The treatment was found to be partially reasonable and necessary. The claimant then filed a UR petition, challenging the UR determination.

The Security Fund indicated at the first hearing on the petition that they were the entity involved in the matter, and asserted that since it is not an insurer as defined by the Act, it is not subject to an assessment of attorney’s fees under the case of Lorino v. WCAB (Commonwealth of Pennsylvania), 266 A.3d 487 (Pa. 2021). The WCJ granted the petition and concluded that although the employer’s contest was reasonable, an award of attorney’s fees was appropriate under the humanitarian purposes of the Act. The employer was ordered to pay claimant’s counsel an attorney’s fee, pursuant to Lorino. The Fund filed an appeal with the Workers’ Compensation Appeal Board, which reversed the WCJ as to the Lorino fees award. The claimant then appealed to the Commonwealth Court.

The Commonwealth Court affirmed the board, stating that when an employer has established a reasonable basis for contest, the language of Section 440 of the Act gives the WCJ discretion to refuse an award of attorney’s fees that are otherwise discretionary. The court also said that the Fund is not an “insurer” under Section 440(a) of the Act and therefore cannot be assessed with attorney’s fees. Accordingly, the court held that the WCJ had no authority to order such an award against the Fund, regardless of the reasonableness of employer’s contest.