James v. Anne's Inc., Op. No. 26762

(S.C. Sup. Ct., substituted and re-filed October 25, 2010) aka The Utica-Mohawk Case

What Happened? 

The S.C. Supreme Court ruled the Workers' Compensation Commission can prorate the award of disability over the claimant's life expectancy (commonly referred to as Utica-Mohawk language) without consent from Employers and Carriers. The Supreme Court initially issued an opinion holding the consent of the Employer and Carrier was required. However, the employee filed a motion for re-hearing, which was granted, and the case was re-heard on June 24, 2010. This opinion was filed on October 25, 2010, and reversed the initial ruling.

What Does it Mean for Employers and Carriers? 

Social Security Disability (SSD) benefits are offset, or reduced, when an employee also is receiving workers' compensation benefits. If the workers' compensation award is fictionally apportioned over the claimant's life expectancy, the amount of social security disability the employee receives increases. Prior to this case, Employers and Carriers have been able to withhold consent to proration language as a bargaining chip in settlement negotiations. Employers and Carriers no longer have that bargaining chip, as the Supreme Court held the Employer and Carrier consent to this proration language is no necessary. 

When an employee was on or expected to be awarded SSD, the Employer/Carrier had leverage in settlement negotiations in resolving issues of permanency. If the defense declined to consent to apportionment language, the employee received less SSD benefits until the value of the permanency award on a weekly basis had passed. As such, the defense could negotiate a reduced settlement value in exchange for agreeing to apportion the award. The defense no longer has that leverage in negotiations because the Commission can now order it absent the Employer/Carrier's consent.