The Workers’ Compensation Appeals Board, in a panel decision, awarded fees to the vocational rehabilitation expert used by applicant while at the same time upheld the Workers’ Compensation Judge’s (WCJ) finding that the report was not substantial evidence. (Michael Hennessey, applicant, v. Compass Group and National Fire Insurance Company of Pittsburgh, Pennsylvania, 2019 Cal. Wrk. Comp. P.D. LEXIS 121).

Applicant claimed injury to the left arm, shoulder, elbow, wrist, hand, and knee while employed as a cook on August 14, 2013. Applicant had undergone two left wrist surgical procedures during the course of treatment and the parties utilized Agreed Medical Examiner Dr. Jeffrey Lundeen. Additionally, applicant hired vocational rehabilitation expert Gene Gonzales, MSW, to perform a vocational rehabilitation evaluation and address lost future earnings capacity. After Trial, the WCJ found that the injury caused 25% permanent disability and that the report and deposition testimony of the vocational rehabilitation expert was not substantial evidence. Additionally, the WCJ found that defendant was not liable for the costs or fees for services provided by the vocational rehabilitation expert. Both parties filed Petition for Reconsideration.

Among other things, defendant contended that the vocational rehabilitation expert report should not have been admitted into evidence for the purpose of rebutting the 2005 Permanent Disability Rating Schedule in relation to a claim after January 1, 2013. Applicant claimed the WCJ erred in failing to find 100% permanent disability, in concluding that the vocational rehabilitation expert report and testimony was not substantial evidence, in requiring that the vocational rehabilitation expert witness report be consistent with the opinions of the AME, and finding that defendant was not liable for the vocational rehabilitation expert witness costs and fees.

As to whether the vocational rehabilitation expert’s report was admissible, the WCAB addressed defendant’s contention that changes to the language in Labor Code §4660.1, removing reference to consideration of future diminished earning capacity, rendered the vocational rehabilitation report inadmissible and found to the contrary. The WCAB cited Labor Code Section §5307.7(a), which requires the Administrative Director to adopt a fee schedule to establish reasonable fees paid for services by vocational experts as well as the fact that Labor Code §4660.1(b) did not eliminate the future earning capacity adjustment factor but rather standardized it to a 1.4. Therefore, the report was admissible.

The WCAB agreed with the WCJ that the report of the vocational expert was not substantial evidence because it did not adequately address the apportionment opinions as provided by Agreed Medical Examiner, Dr. Lundeen. The WCJ made this finding primarily because there was insufficient explanation provided by the expert on why he did not apply the apportionment as opined by Dr. Lundeen. The WCAB relied on Acme Steel v. WCAB (Borman) (2013), 218 Cal. App. 4th 1137 for this conclusion.

On the issue of liability for the vocational expert’s fees, the WCAB found that the vocational expert’s report and opinions had the potential to affect the permanent disability rating and thus the fees were recoverable against defendant. The factors in determining whether vocational rehabilitation expert fees and costs are allowable was set forth in the en banc decision of Costa v. Hardy Diagnostic (Costa II), (2007) 72CCC1492. These factors include: 1) the proposed expert must qualify as an expert; 2) the costs of the rebuttal evidence to a permanent disability rating must be reasonable and necessary at the time they were incurred; and 3) the evidence must at least have the potential to affect the permanent disability rating in order to be recoverable. The allowance of such costs and fee are done on a case by case basis and within the WCJ’s discretion.

In short, the WCAB in Hennessey concluded the vocational rehabilitation expert’s report and opinions were not substantial evidence on the issue of rebutting the 2005 Permanent Disability Rating Schedule, but met the factors in Costa II so as to allow recovery of costs and fees from the employer.