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Can an Insurer Waive Its Rights?

"Waiver" is the legal term that is used to prevent unfair change by an insurer. Once an insurer accepts a bill, pays for treatment, it may be too late to change its position.

In a recent case, an injured worker we will call "Jane" was injured almost two years ago.

The insurer paid for Jane's surgery.

Later, the insurer hired an "independent" medical doctor who said that Jane's treatment was not related to the injury at work.

Based on the "independent" medical doctor report, the insurer changed its position. Even though more post-op treatment was needed, the insurer refused to pay for it.

The insurer also stopped paying any more weekly checks to Jane, even though her checks were her sole source of income.

We were able to obtain an Order in favor of Jane and against the insurer.

The Order required the insurer to reinstate each and all of Jane's rights. That included a requirement that the insurer pay to Jane all past weeks of checks it had denied, and pay for all of Jane's ongoing medical care for her work injury.

Here is part of our successful argument on "waiver" made to the Department of Labor:

"Anne Coutermarsh, Specialist II
Vermont Department of Labor
Workers' Compensation Division
PO Box 488
Montpelier, VT 05601-0488

Dear Anne:

Please let this serve as confirmation of our entry of appearance on behalf of the injured and disabled employee, {client actual name withheld}.

...
The insurer has legally waived a defense of causation under applicable law.

The law is well established that the Department of Labor and the Vermont Supreme Court will not allow an insurer to retrace its routes and avoid the impact of waiver:

"It is undisputed that Claimant suffered an injury in 1993. "Every natural consequence that flows from that injury" is also compensable. See 1 A Larson and LK Larson, Larson's Workers' Compensation Law ch 10 at 10-1. Therefore, a condition triggered by a work-related injury, barring intervening events, is compensable. Second, the carrier has waived its right to challenge causation after such a lengthy period of coverage.

Waiver is the intentional relinquishment or abandonment of a known right and may be inferred from the party's words or conduct. Tooley vs. Robinson Springs Corp., 163 Vt. 627, 628, 660 A. 2d 293, 295 (1995) (mem). We have held that the essence of a waiver is a voluntary choice. And thus the party must have acted with a knowledge of all the material facts. Eastman vs. Pellettier, 114 Vt. 419, 423, 47 A. 2d 298, 301(1946)."
Humphrey vs. Vermont Tap and Die Co., Vt. Sup Ct Op No. 96-187 (23 Apr 1997) (entry order)."
....

In the present case, the insurer at all times had available to it all relevant information about the 2008 injury to the right arm to make its decision, and chose legally not to challenge the issue of causation or to raise a defense. Further, it chose to accept very significant surgery. It did not pay without prejudice or reserve any rights or defenses.

...
The insurer's own expert, Dr. Boucher, now states at pg. 11 that the "surgery has merely entrenched her condition and removed any possibility of 100% resolution." The need for ongoing post op care is, according to the insurer's own expert, due to the accepted surgery.

The insurer cannot now be heard to raise a defense of causation, not after accepting the case, not after more than a year having approved right arm surgery, and particularly under the circumstance where post op care is still needed after both the Department and the injured employee have relied upon the acceptance of the case in undergoing surgery... .

The defense of causation is legally waived."

If the insurer tries to change horses in midstream, it may be too late. It may have waived its right to deny responsibility.