Issue link: http://www.e-digitaleditions.com/i/83215
XI. Traps for the Unwary A. De Facto Awards 1. De facto Awards are premised upon Code Section 65.2-701(A), which provides, in pertinent part: If after injury . . . the employer and the injured employee . . . reach an agreement in regard to compensation or in compromise of a claim for compensation under this title, a memorandum of agreement in the form prescribed by the Commission shall be filed with the Commission for approval. The above statutory language establishes that if an agreement is reached between a carrier and claimant, to comply with the Act, the carrier must forward agreement forms to the claimant for signature. To illustrate, a claimant files a Claim for Benefits with the Commission. The carrier begins to pay without an Award from the Commission. The carrier does not dispute the compensability of the claim or any other issue, such as the average weekly wage. The carrier does not send agreement forms to the claimant. If such payments continue for a significant period of time, a de facto Award could be entered. The courts will not make a bright-line rule about exactly what is a "significant" period of time, but three months has been deemed a significant period of time for de facto Award purposes. The effect of a de facto Award is exactly the same as an actual Award. For example, in our hypothetical, imagine that after three months the carrier learns that the claimant is not really looking for work. The carrier stops payment to the claimant and wishes to assert a marketing defense. Similar to an actual Award, if a de facto Award is found, the carrier would have a duty to provide vocational rehabilitation, and the claimant would not have to market his residual capacity. It is important that you do not begin to pay indemnity benefits to a claimant without an Award in place. The voluntary payment of medical benefits alone does not subject carriers to the same risk as the payment of indemnity benefits, as medical benefits are not deemed to be "compensation" under 65.2-701(A). The de facto Award doctrine applies to both original claims for benefits, and to claims for changes in condition.