INDUSTRIAL INSURANCE -- APPEAL COSTS

INDUSTRIAL INSURANCE -- APPEAL COSTS

Department of Labor & Industries (not new Board of Industrial Insurance Appeals) liable for all costs in connection with industrial insurance appeals.

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                                                               November 30, 1949

Honorable A. M. Johnson
Director, Department of Labor and Industries
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 170

Dear Sir:

            You have requested our opinion on the following question:

            Does the enactment of chapter 219, Laws of 1949, divesting the Joint Board of the Department of Labor and Industries of its powers of review in industrial insurance claims, and creating a Board of Industrial Insurance Appeals, providing for its organization, defining its powers and duties, and appropriating:

            "* * * the sum of one hundred fifty thousand dollars ($150,000) from the Accident Fund and the sum of one hundred fifty thousand dollars ($150,000) from the Medical Aid Fund, or so much thereof as may be necessary, for the purposes herein stated."

            transfer the obligation of appeal costs from the Department of Labor and Industries to the new Appeal Board?

            Our conclusions may be summarized as follows:

            Liability for appeal costs was not transferred to the Board of Industrial Insurance Appeals.  All costs incurred in connection with appeals arising from decisions of the Division of Industrial Insurance to the Board or to any court constitute a charge against the appropriation for "Appeal Costs." provided in chapter 242, Laws of 1949 (General Appropriations) to the Department of Labor and Industries.

             [[Orig. Op. Page 2]]

                                                                     ANALYSIS

            Prior to 1949, the Director of Labor and Industries, the Supervisor of Industrial Insurance and the Supervisor of Safety, acting together, constituted a Joint Board to review decisions of the Department.  Their duties and powers with respect to reviewing industrial insurance claims were transferred to an independent appeal board designated as the Board of Industrial Insurance Appeals by § 5, chapter 219, Laws of 1949.

            The clear intendment of this legislation was to effectuate the purposes contemplated in the workmen's compensation act.  Certain changes in the procedural methods for its administration and operation with respect to appealing claims are therein prescribed.  After delegating to the Board of Industrial Insurance Appeals the power to make rules and regulations concerning its functions and procedures, the legislature provided in § 3 of said act that "The board is authorized and shall have power to incur such expenses as are reasonably necessary to carry out its duties hereunder.  All such expenses shall be paid, one half from the Accident Fund and one half from the Medical Aid Fund upon vouchers approved by the Board."  The act then, in § 7 thereof (being the quoted portion of your question), appropriated $300,000 "or so much thereof as may be necessary," for the purposes therein stated.

            While chapter 219, Laws of 1949, transferred the review and appeal powers of the Joint Board to the Board of Industrial Insurance Appeals and conferred upon it the appellate jurisdiction formerly vested in the Joint Board, at that point all similarity ends.  The new board was created to act entirely independent of the Department of Labor and Industries.

            It was the intent of the legislature to establish an impartial, quasi-judicial tribunal to hear appeals from orders entered by the Department with respect to industrial insurance.  Unlike regulatory bodies, the Board of Industrial Insurance Appeals is not a party to its own proceedings; nor may it initiate proceedings on its own motion, hence it is in no sense a party litigant either in its own forum or in the superior and Supreme courts on appeal, as is the case of many regulatory bodies.  The parties litigant before the Board of Industrial Insurance Appeals are the claimant, the employer, and the Department of Labor and Industries.

            Not being a party litigant, but rather being an independent tribunal in its own right, it is clear that the Board of Industrial Insurance Appeals cannot be made responsible for costs or expenses upon appeal nor for witness fees, as  [[Orig. Op. Page 3]] these items are throughout our judicial system borne by the litigants.  It is therefore our opinion that the appropriation contained in chapter 219, Laws of 1949, was designed and intended to meet the expenses which would be incurred in the administration and operation of an intermediate trial board.

            On the other hand, the Department of Labor and Industries is a party litigant.  The 1949 enactment [§ 6, chapter 219, Laws of 1949] specifically provides that "the Department shall be entitled to appear in all proceedings before the Board and introduce testimony in support of its order."  (Olympia Brewing Co. v. Department of Labor and Industries, 134 Wash. Dec. 456 [[34 Wn.2d 498]].)  The act further [§ 6, chapter 219, Laws of 1949] that upon any appeal being taken from an order of the Department of Labor and Industries or from an order of the Board, the appellant must serve upon the Director of Labor and Industries a notice of appeal.  The Department, by statute, is thus entitled to notice of appeal as is any other party litigant.

            Furthermore, since the year 1931, the Department of Labor and Industries has been obligated to pay all expenses and costs upon appeals from decisions of the Division of Industrial Insurance.  Rem. Rev. Stat. 7697-1 provides:

            "Whenever any appeal is taken from any decision of the division of industrial insurance of the department of labor and industries to the joint board or to any court, all expenses and costs incurred therein by the department of labor and industries, including fees for expert medical testimony, court reporter costs and attorneys' fees, and all costs taxed against such department, shall be paid one half out of the medical aid fund and one half out of the accident fund of the state treasury."

            To meet this financial burden, the 1949 legislature, in its general appropriations act (chapter 242, Laws of 1949, pages 959, 960), has made the following appropriation for the fiscal biennium ending March 31, 1951:

FOR THE DEPARTMENT OF LABOR AND INDUSTRIES:  ***
FROM THE MEDICAL AID FUND.  ***

                 Appeal Costs:
                   Salaries and Wages                                   $ 73,980.00
                   Operations                                                      89,876.00

                   * * *

             [[Orig. Op. Page 4]]

            FROM THE ACCIDENT FUND.
                 Appeal Costs:
                   Salaries and Wages                                   $ 73,980.00
                   Operations                                                      89,876.00
                   * * * "

            This appropriation is separate and distinct from the $300,000 appropriated by chapter 219, Laws of 1949, and similar express appropriations for appeal costs have been made for each preceding biennium since 1941.  (Prior to that date, appeal costs were included in an appropriation to the Department for "Claims and Awards and Other Expenses Provided by Law."  (Chapter 223, Laws of 1939, page 945.)

            We are, therefore, of the opinion that the general appropriation for appeal costs above quoted, and that appropriation alone, was designed and intended to meet expenses referred to in Rem. Rev. Stat. 7697-1 quoted above, namely, the costs of all appeals taken from any decision of the Division of Industrial Insurance to the Board of Industrial Accident Appeals or to any court, and that all costs incurred therein by the Department such as superior court transcripts(Department of Labor and Industries v. Ayer, 185 Wash. 310, 54 P. (2d) 1019), fees for expert medical testimony, court reporter costs, and attorneys' fees, including attorneys' fees allowed by the courts, as well as salaries and expenses of attorneys representing the Department, as provided in chapter 50, Laws of 1941.  The enactment of chapter 219, Laws of 1949 did not have the effect of transferring the burden of costs and expenses enumerated above to the newly created Board of Industrial Insurance Appeals.

Yours very truly,

SMITH TROY
Attorney General

T. H. LITTLE
Chief Assistant
Attorney General