AN ACT FURTHER REGULATING WORKERS’ COMPENSATION INSURANCE.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same as follows:
SECTION 1. Section 25C of chapter 152 of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by adding the following subsection:-
(11) Whenever facts exist showing that an employer has failed to comply with this chapter, then any 3 persons may bring a civil action and that civil action shall be deemed a private attorney’s general action. Before bringing a civil action under this subsection, the 3 persons shall provide notice, by certified mail, return receipt requested, of what might become the substance of a complaint to the employer and any insurer that was or is entitled to collect amounts not paid. The notice shall include a statement of intent to file suit under this subsection. After the expiration of 90 days after delivery of the notice to the employer and the insurer, the 3 persons may file a civil action under this subsection, but they shall not be bound by the notice provided to the employer and the insurer.
Plaintiffs shall prove a violation of this chapter by a preponderance of the evidence. An employer shall be liable for all amounts which should have been paid by the employer. Upon establishing that a violation occurred, plaintiffs shall be collectively entitled to recover 25 per cent of the amount not paid or $25,000, whichever is less, plus costs and reasonable attorneys’ fees, and an additional amount from the employer as compensatory and liquidated damages which shall be equal to 25 per cent of the amount that should have been paid or $25,000, whichever is less.
After a civil action is commenced under this subsection, any insurer that has failed to file a complaint or seek arbitration to recover or collect all of the amounts which would have been due to the insurer from an employer in the action shall be barred from recovering, attempting to recover or collect any amounts sought in the action unless the insurer obtains the voluntary, written consent of the plaintiffs. When such written consent is provided, a court may substitute the insurer as the plaintiff and, upon substitution, the case shall proceed without further regard to this subsection or to the Workers’ Compensation Trust Fund.
No settlement between an insured and an insurer shall prohibit or limit an action under this subsection to recover other amounts that should have been paid under this chapter. The insurer shall, upon demand, provide a copy of any settlement to the 3 persons who sent notice under this subsection. Except as provided herein and unless the insurer has been substituted in the action, any amounts recovered by the plaintiffs under this subsection shall be deposited into the Workers’ Compensation Trust Fund established in section 65, except those amounts payable to those plaintiffs in accordance with this subsection. An insurer who has been served with notice under this subsection and who pays a claim may recover from the amounts that are deposited into the trust fund any premium that should have been paid to that insurer which would have provided coverage for that specific claimant and claim.
Nothing in this subsection shall limit or prohibit a political subdivision, public entity or office, division, commission, commissioner, director, attorney general or a law enforcement agency or office entitled to bring a civil or criminal action against a defendant to an action under this subsection from proceeding against such defendant in an appropriate forum. The judge or other hearing officer in that forum may consider and offset the amounts recovered, or likely recoverable, by an action pursuant to this subsection in imposing a verdict or judgment or against imposing a fine or other penalty.
Any action filed under this subsection shall be filed only after 90 days following the expiration of a workers’ compensation policy affected by the action, if such policy existed.
Actions under this subsection shall be commenced within 6 years after the cause of action accrues.
SECTION 2. Subsection (11) of section 25C of chapter 152 of the General Laws shall not affect, or apply to insurance contracts in effect on the effective date of this act.
Approved, August 9, 2010.