Fraud Allegations in Workers’ Compensation Claims

By Bruce P. Miller

With increasing frequency, insurance companies are raising the defense of fraud on the part of a Petitioner in Workers’ Compensation cases. There is an anti-fraud provision in the Workers’ Compensation law. It is a fourth-degree crime for making “a false or misleading statement, representation or submission concerning any fact that is material to that claim for the purpose of wrongfully obtaining the benefits.” The alleged fraudulent statements must have been “purposely or knowingly” made.

If the Judge of Compensation finds that such fraudulent statements or representations had been made, the Court “may order the immediate termination or denial of benefits with respect to that claim and a forfeiture of all rights of compensation or payments sought with respect to the claim.”

Instances of fraud that have been alleged by insurance companies in Workers’ Compensation cases include a Petitioner providing false or misleading information insofar as his/her health history is concerned, medical treatment history and even exaggerations of his/her symptoms, such as inability to participate in certain activities and experiencing pain.

When analyzing the facts of a Workers’ Compensation case in order to ascertain whether fraud has been committed, New Jersey’s Appellate Courts have consistently held that the Workers’ Compensation law is socially beneficial legislation and must be interpreted liberally and inclusively. Moreover, the anti-fraud provision is only intended to root out fraudulent claims. It is not meant to merely to test “an injured person’s ability to remember every detail of a lengthy medical history or to accurately determine what may be material for purposes of receiving treatment or other benefits.” Bellino v. Verizon Wireless, 435 N.J.Super 85 (App. Div. 2014).

Our Appellate Division has emphasized that the Workers’ Compensation law is intended to afford coverage to as many injured workers as possible; accordingly, “all elements of the anti-fraud provision must be proven by competent evidence for a Motion to Dismiss to prevail on those grounds.” Our courts have emphasized that it is not enough that the Respondent show that the injured worker made an inaccurate or false statement or omitted some facts. Rather, the Respondent must show that the injured worker acted purposefully or knowingly with the intent to receive benefits that he/she knew they were not entitled to and that the false statement or omission was made specifically for the purpose of falsely obtaining benefits “to which the worker was not entitled.”

Moreover, our Courts have stated that even if it is shown that an injured worker has lied or given false statements, if that false statement has no connection to the injury itself the Courts will generally overlook the fraud that may have been committed.

The Workers’ Compensation law is well known to represent “social or remedial legislation” and is to be liberally construed. Accordingly, although injured workers should avoid giving false or misleading information or omitting important facts for the purpose of falsely obtaining benefits, the Workers’ Compensation judicial system in New Jersey is clear that an injured workers’ memory does not have to be perfect, and that individual’s recital of symptoms need not be exact in every detail.

If it is apparent that the worker’s information is essentially accurate and truthful and given in good faith, the fraud statute will not provide a barrier to the award of Workers’ Compensation benefits.

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