Claimants are arguing that de facto awards apply in their claims with increasing frequency.
The de facto doctrine creates an implied award based upon actions of the parties that show an agreement, though no formal award has been entered in a claim. A de facto award can eliminate available defenses in a claim and can shift the burden to the defendants to terminate benefits with the same requirements as those present in a formal award scenario. Generally, for a de facto award to apply, there is no dispute to compensability or average weekly wage, and the employer/carrier has made longstanding indemnity payments.
In this recent December 13, 2016, Opinion, the Court of Appeals addresses the elements required to establish a de facto award in Virginia. The Court found that in order to be entitled to a de facto award, the claimant must establish that she suffered prejudice, or that she was placed in a disadvantageous position as a result of the absence of an actual award.
In this claim, the claimant argued that she did not look for work due to the voluntary payments of the carrier. The Court found this without merit for two reasons: 1. She had presented evidence that she did look for work at the hearing, and; 2. the accident was found not compensable, and the duty to market only applies if the accident is compensable.
The Court also found that the claimant’s alternative argument that she could have been prejudiced is not adequate, and a claimant must show evidence of actual prejudice in order for a de facto award to apply. This Opinion is important, as it provides an additional argument to defendants to argue against the application of de facto awards if it can be established that the claimant suffered no prejudice as a result of voluntary indemnity payments in claims.
The Opinion also addresses the compensability of the underlying claim, finding that the claimant’s fall due to tripping while walking across a non-defective rug did not arise out of the employment.
You can read the full Opinion here: