House Bill 186

AN ACT TO AMEND SECTION 71-3-59, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT WORKERS' COMPENSATION LAW BAD FAITH CLAIMS ARE UNDER THE EXCLUSIVE JURISDICTION OF THE WORKERS' COMPENSATION COMMISSION; TO PROVIDE VARIOUS OTHER PROVISIONS OF LAW REGARDING SUCH BAD FAITH CLAIMS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 71-3-59, Mississippi Code of 1972, is amended as follows:

71-3-59. (1) If the court having jurisdiction of proceedings in respect of any claim or compensation order determined that the proceedings in respect of such claim or order have been instituted or continued without reasonable ground, the costs of such proceedings shall be assessed against the party who has so instituted or continued such proceedings.

(2) If the full commission determines that proceedings in respect to a claim have been instituted, continued or delayed, including by way of appeal to the commission, without reasonable ground, the full commission shall require the party who has so instituted, continued or delayed such proceedings or the attorney advising such party, or both, to pay the reasonable expenses, including attorney's fees, caused by such institution, continuance or delay to the opposing party. In addition to requiring the payment of reasonable expenses, including attorney's fees, to the opposing party, the commission may levy a civil penalty not to exceed Ten Thousand Dollars ($10,000.00) against such party, or attorney advising or assisting such party, or both, payable to the commission. Any such civil penalty levied and collected by the commission shall be deposited into the Administrative Expense Fund provided for in Section 71-3-97 and any such penalty which is not voluntarily paid may be collected by civil suit brought by the commission.

(3) (a) The commission has the exclusive jurisdiction and control of claims for alleged bad faith claims handling and any alleged intentional torts arising out of the handling of workers' compensation claims by the employer, the employer's workers' compensation administrator, or the workers' compensation insurance carrier, and further has the exclusive jurisdiction to determine whether the employer, the employer's workers' compensation administrator, or the workers' compensation insurance carrier has acted in bad faith in adjusting or settling a claim for compensation. Such actions may not be brought or maintained in any other venue or jurisdiction; however, the determination by the commission may be appealed in like manner as other awards under the Workers' Compensation Act. Any actions pending upon July 1, 2017, shall be immediately transferred to the commission.

(b) The failure to pay a benefit timely does not in itself constitute bad faith claims handling, and penalties for such failure remain subject to Section 71-3-37.

(c) Where the commission finds by clear and convincing evidence conduct constituting bad faith claims handling, it may, in its discretion, levy a reasonable penalty payable as increased compensation to the claimant. In determining the amount of the penalty award, the commission shall take into account the wrongful conduct, intent to cause harm, if any, the amount not paid, single or repeated conduct, harm to the employee, and other characteristics of the conduct that the commission finds relevant. The commission shall ensure the penalty is reasonable in its amount and rationally related to the purpose to penalize what occurred giving rise to the penalty and to deter its repetition by the defendant and others.

(d) For purposes of this section, the term "bad faith claims handling" shall mean an intentional and malicious denial or substantial delay of compensation benefits without any reasonable basis or reasonable belief that such benefits were not currently due.

(e) The commission shall promulgate rules governing conduct subject to penalty under this section.

SECTION 2. This act shall take effect and be in force from and after July 1, 2017.