“For Whom the Statute Tolls” The effect of the 2019 amendment and reenactment of Virginia Code Section 65.2-602

As of July 1, 2019, the legislature passed an amendment that puts an abrasive twist on defendants’ chances of prevailing on a two-year statute of limitations defense when voluntary payments have been made.

Prior to July 1, 2019, Virginia Code Section 65.2-602, better known as the “Tolling Statute,” provided in pertinent part that:

In any case where an employer has received notice of an accident resulting in compensable injury to an employee as required by §65.2-600, and whether or not an award has been entered, such employer nevertheless has paid compensation or wages to such employee during incapacity for work as defined in §65.2-500 or §65.2-502, resulting from such injury or the employer has failed to file the report of said accident with the Virginia Workers’ Compensation Commission as required by §65.2-900, and such conduct of the employer has operated to prejudice the rights of such employee with respect to the filing of a claim prior to expiration of a statute of limitations otherwise applicable, such statute shall be tolled for the duration of such payment or, as the case may be, until the employer files the first report of accident required by §65.2-900.

Effective July 1, 2019, the statute now reads:

In any case where an employer has received notice of an accident resulting in compensable injury to an employee as required by §65.2-600 and, whether or not an award has been entered, the employer has paid compensation or wages to such employee during incapacity for work, as defined in §65.2-500 or 65.2-502, resulting from such injury or the employer has failed to file the report of said accident with the Virginia Workers’ Compensation Commission as required by §65.2-900, or otherwise has under a workers’ compensation plan or insurance policy furnished or caused to be furnished medical service to such employee as required by §65.2-603, the statute of limitations applicable to the filing of a claim shall be tolled until the last day for which such payment of compensation or wages or furnishment of medical services as described above is provided and that occurs more than six months after the date of accident. However, no such payment of wages or workers’ compensation benefits or furnishment of medical service as described above occurring after the expiration of the statute of limitations shall apply to this provision. In the case where the employer has failed to file a first report, the statute of limitations shall be tolled during the duration thereof until the employer filed the first report of accident as required by §65.2-900. In the event that more than one of the above tolling provisions applies, whichever of those causes the longer period of tolling shall apply.

I. What does this mean for you?

Any voluntary payments made by the employer after the accident and for longer than six months or payments originating six months after the accident will toll the statute of limitation for filing a claim until the last day of which such payment is made. Therefore, if the employer continues
to make payments the tolling will continue to restart every time another payment is made, which will make it difficult to succeed on a defense of statute of limitations as long as payments are continuing to be made.

Overall, this amendment could have a chilling effect on the inherit good nature of voluntary payments. Historically, voluntary payments have been a good way to keep the insured happy while the claim is being investigated, and this amendment could now – and understandably so – deter the insurer for wanting to make any payments prior to the filing of the claim or entry of an award.

II. How should you proceed in the future?

In two words: with caution! As this legislation is still very new, it is hard to predict where the crux of the issues will be regarding enforcement and on what side of the legislation the Commission will rule. Right now, it is best to take precautionary measures when making payments for longer than six months post-accident and/or any payments originating six months post-accident. We would advise that you calendar all voluntary payments made within or after this period and assess prior to the expiration of the six-month period whether it is in the best interest of the case to continue making the payments longer than six months or to originate any payment six months post-accident. As you will be subjecting the claim to this new tolling provision, which will give the claimant even longer to file a Claim for Benefits and could potential avail the defendants to more liability and/or exposure while also lessening the chances of prevailing on a statute of limitations defense.

While we do not believe that it is a good idea to completely throw the idea of voluntary payments out the window, as they can be a good tool to keep the insured satisfied during the investigation process and initial phases of litigation. We do advise that you treed cautiously when making voluntary payments and keep a close eye on how long and when the payments are made.

Posted In: E-Blast