There is always confusion about section 440.20(4), otherwise known as the 120 day rule.  Per that statute, and E/C–if it is uncertain that a claim is compensable–can temporarily pick up the claim and with a good faith investigation determine if there is compensability. 

This way, if the claim is compensable the injured worker does not miss his benefits.  Yet, if there is evidence that the accident did not occur in the course and scope of employment or Claimant is not an employee or Claimant did not report the accident within 30 days, the E/C can still deny as long as it does so within the 120 days.

There is a notice requirement, in that the E/C must tell the Claimant, in writing, that is accepting compensability only for 120 days.  Per the statute if the E/C does not deny the claim within 120 days then it waives its right to deny compensability.

But, does the E/C waive its right to deny the claim for any other reason?

The idea behind the 120 day rule lies in the old equitable principle of estoppel.  Estoppel basically means that if an E/C takes a position that induces the Claimant to rely upon that position to his detriment, then the E/C cannot reverse its position.  

In other words by not denying the claim within 120 days, the Claimant believes his claim is accepted and does not pursue other avenues of relief (health insurance, Medicare).  Therefore, it would be unfair for the E/C to reverse course.

For many Claimant attorneys the 120 day rule was a catchall claim whenever the E/C would fight a PFB.  The idea being that once the 120 days passes then the E/C loses all of it defenses.  School District of Hillsborough County v. Dickson is an example of how those Claimant attorneys would be wrong.

In Dickson, Claimant suffered a compensable accident and injured her knee.  The E/C picked up the claim and authorized medical care.  After a period of physical therapy, Claimant  recovered.

Some time later, Claimant injured her knee again, this time at home.  At first, the authorized doctor thought Claimant aggravated her compensable injury.  After reviewing the MRI scan and performing a diagnostic scope, the doctor changed his position and opined that she suffered a completely new injury.  

Based on the doctor’s new opinion, the E/C denied the claim on major contributing cause grounds (more than 120 days after the new accident).   At trial, the Judge found that Claimant did have a new accident and that the 120 day rule is “mandatory” and that since the E/C did not deny the new claim within 120 days they could not deny compensability.***

On appeal, the First DCA reversed.  It found that the 120 day rule applied to the initial compensability of the accident, i.e. whether Claimant suffered a compensable work place injury.  The rule did not apply to the major contributing cause defense.   This was not a case where the E/C tried to deny because an “accident” did not take place as defined by s. 440.02, or that Claimant is an independent contractor, or that the accident did not occur within the course and scope of employment.

Also, the E/C did not know of their major contributing cause defense until the doctor confirmed this.  They then denied the claim.  Per s. 440.20(4), there is an exception to the 120 day rule.  If the 120 days passes, the E/C can still deny if it can “establish material facts relevant to the issue of compensability that it could not have discovered through reasonable investigation within the 120 days.”  In this case, the only way it could discover that Claimant suffered a new home accident rather than an aggravation of a compensable accident was from the opinion of the doctor.

Does this mean that the Court delegitimized the 120 day rule?  That an E/C need not worry about it?  Absolutely not.  Whenever you have doubt about a claim, fire off a 120 day letter to Claimant advising her of their rights and begin your compensability investigation with your defense counsel.   There are host of defenses that you give up when the 120 day passes.  Relying on the major contributing cause defense to save is not good enough.

***It should be noted that the Claimant in the Dickson case did not raise the 120 day rule as a counter claim to the E/C’s major contributing cause defense.  The Judge raised it on her own and the First DCA found this to violate the E/C’s due process rights.  The Judge cannot rule on the 120 day rule unless the Claimant raises. 

The same applies to E/C’s with affirmative defenses, like fraud.  If you do not raise it at trial, you lose it.