The controvert is the keystone of the defense of workers’ compensation claims. It serves as the employer/insurer’s shield against fraud and facilitates protection under the law. However, the controvert has also served as the sword turned against the employer/insurer as a basis for an assessment of attorney’s fees and penalties. In many occasions, the timeliness of filing the WC-3 or WC-1(c) determines whether the controvert works for or against you.

While the controvert is a basic component of a litigated workers’ compensation claim, it is often improperly used and untimely filed. The fundamental aim of the controvert is to give the employee notice that the employer/insurer will not commence income or certain medical benefits voluntarily. Generally, the controvert is final unless challenged by the employee. This challenge comes when the employee requests an evidentiary hearing before the State Board to determine whether or not the employee should be awarded benefits.

The primary statute that governs controverting claims is O.C.G.A. § 34-9-221. Essentially, if no benefits have been paid on the claim, the employer/insurer has 21 days from the discovery of the asserted injury or disability to controvert the claim. The proper controvert must state the grounds for the denial of benefits. While the law does not provide a list of acceptable reasons to controvert a claim, the Board suggests that using a vague reason such as “pending investigation” is insufficient. However, under subsection (d) of O.C.G.A. § 34-9-221, the employer/insurer may controvert the claim, initiate an investigation, and then commence benefits, if appropriate. The cost of this approach is a 15% late-payment penalty if it turns out that the claim was in fact compensable.

The initial 21 days is calculated from the date of “injury” or “disability.” Fortunately, the expiration of the 21 days does not bar the employer/insurer from contesting the claim and does not serve as statute of limitations. However, the failure of timely filing the WC-3 or WC-1(c) opens the door to an assessment of attorney’s fees and administrative penalties.

Many times a reason for controverting a claim reveals itself after the employer/insurer commences benefits. In those situations, the employer/insurer may controvert the claim in its entirety within 60 days of the date the benefits are due. O.C.G.A. §34-9-221(h). Hence from a practical standpoint, the law allows the employer/insurer 81 days from discovery of the injury or disability to challenge the claimant’s entitlement to benefits.

In certain conditions, the law also allows the employer/insurer to dispute the claim past the first 81 days. These circumstances arise when there is a change in condition or when newly discovered evidence is discovered. Cumberland Distribution Services, Inc. v. Fuson, 228 Ga. App. 380 (1997). Furthermore, employee misrepresentation may serve as a ground for tolling the allowable time to controvert a claim. Two recognized examples of such misrepresentation include the employee’s false accounting of information relating to the nature of the accident or the employee’s intentional misrepresentation during the hiring process which nullifies the employment relationship.

Recently, the Georgia Supreme court addressed the proper implications for failing to timely controvert workers’ compensation claims. In Meredith v. Atlanta Intermodal Rail Service, 274 Ga. 809, 561 S.E.2d 67 (2002), the Court clarified the consequences for missing the 21 day and 81 day deadlines.

In this case, the employer failed to file its notice of controvert within the prescribed 21 days. Additionally, it did not commence any benefits to the employee. In turn, the employee challenged the untimely controvert and asserted that the employer was barred from presenting any and all defenses to the claim. The Supreme Court disagreed and found that the 21 day deadline did not serve as a statute of limitations since the employer/insurer did not commence benefits. O.C.G.A. § 34-9-221 (d). However, the Court pointed out the untimely controvert subjected the employer/insurer to potential penalties.

The high Court also explained that the “81 day controvert rule” applies when benefits are actually commenced and suspended because the employer/insurer believes it has reasonable grounds to controvert the entire claim. In order to utilize the extended filing deadline, the employer/insurer must be currently paid up on all accrued benefits and penalties before it files the controvert with the Board. Cartersville Ready Mix Co. v. Hamby, 224 Ga. 116, 479 S.E.2d 767 (1996).

The Notice of Controvert protects the employer/insurer from the fraudulent or unentitled claimant. Hence, the properly executed controvert serves its intended purpose. However, the danger of misusing or improperly filing of the controvert carries with it potentially costly consequences that are difficult to explain to an administrative law judge, and more importantly, to your supervisor.

Originally Published in Drew, Eckl & Farnham Journal: Volume 15, No. 85 March 2003