On Jan. 8, 2026, a significant panel decision was issued in Rader v. Ticketmaster Corp. and SCIF, wherein the Workers' Compensation Appeals Board found jurisdiction beyond five years from the date of injury to reallocate payment of a 100% PD award.

David J. Chetcuti

In November 2011, a $39,441.79 lump-sum attorney fee was ordered commuted off the side of a PTD award, thus reducing the applicant’s weekly benefit rate from $336 to $285.60, a difference of $50.40 per week. In 2024, the applicant's attorney asserted that after 15 years of reduced benefits, the commuted $39,441.79 attorney fee had been completely offset by the $50.40 weekly reductions ($39,441.79 ÷ $50.40 = 782.63 weeks or 15 years). Counsel sought discontinuation and reallocation of the offset in order to reinstate the full $336 disability rate.

The trial judge disagreed and found no jurisdictional authority to reallocate the award beyond five years from the date of injury. In addition, the trial judge mentioned that applicant never provided proof that the offsets exhausted the commuted sum.

On appeal, the WCAB overturned the decision and found jurisdiction to reallocate. In addition, the ruling was designated as a “significant panel decision.”

Consequently, numerous articles and commentaries were then published by major law firms throughout the industry reporting on this decision. Unfortunately, everyone seems to have overlooked a rather important flaw: namely, the decision was partially premature. 

The board failed to address the trial judge’s comment that no proof had been presented concerning exhaustion of the $39,441.79 commuted fee despite applicant’s assertions to the contrary. 

When overturning the decision, the panel “implied” that the entire commuted attorney fee had been offset, pursuant to applicant’s calculations. However, these calculations were erroneous, as more fully explained below. This situation presents us with a wonderful educational opportunity to study the mathematics of commutation formulas.

All commutations in workers’ compensation consist of two elements: namely principal and interest (8CCR10169 Tables 1-3). A defendant is allowed a 3% per annum credit for interest against commuted lump sums. For example, if $39,441.79 is commuted, resulting in a weekly $50.40 rate reduction, then $28.71 of the reduction applies toward principal and $22.69 toward interest. After one year, the value of the outstanding commuted attorney fee is reduced by approximately $1,492.92 ($28.71 x 52 weeks) as opposed to $2,620.80 (50.40 x 52 weeks) as calculated by applicant. 

The board in Rader failed to mention that the $50.40 weekly reduction is not a dollar-for-dollar offset. All commutation formulas require that a credit of 3% per annum for interest be considered in the equation. 

Therefore, in Rader, it will take much longer than 15 years to completely offset the commuted attorney fee, thus rendering the issue of reallocation premature. The other issue of jurisdiction remains germane.

Rader also raises an interesting additional issue: namely, if an employee outlives his life expectancy, resulting in reallocation due to the complete offset of the commuted attorney fee, then what would happen if the opposite situation occurred, where the applicant dies prematurely? Will the employer be entitled to a refund of excess attorney fees paid? 

Rader has opened the door to this possibility, where the board now retains jurisdiction to entertain the argument. But that is an issue for another day.

David J. Chetcuti is a former vice president for the world's largest insurance broker, in charge of workers' compensation claims consulting services, a former director of education and development for the second largest workers' compensation insurance company in California, and a former director of workers' compensation for a Fortune 100 company. He is also a professor of workers' compensation law, having taught college-accredited classes over the past three decades in California and other states. Chetcuti often presents public seminars for various professional organizations, including the state bar. He is also a co-author of the 16-volume law book, "Sullivan on Comp."