The “G” in a 1201 (G) penalty does NOT stand for “good”

Most of us are unfortunately familiar with the more common “(F)” and “(I)” penalties under Louisiana Revised Statute 23:1201. But there is another, and potentially more painful penalty that exists. The dreaded “(G)” penalty. You are hopefully unfamiliar with this penalty, as it tends to arise after the case has been tried, unsuccessfully appealed, or settled.  In short, once a court awards any benefit to a claimant, and that award becomes final (either no appeal is taken, the appeals process has been exhausted and was unsuccessful, or you settle a claim fully and finally), you must pay that judgment within thirty days from the date the judgment became final.

Under 23:1201(G), if any final judgment is not timely paid within thirty days after it becomes due, the penalty is equal to 24% of the value of the judgment or $100 per day up to $3,000.00 whichever is greater plus reasonable attorneys’ fees. As the penalty is the greater of the two options, even being one day late could be a $3,000.00 penalty plus whatever attorneys’ fee the court decides to award. While there is an escape if the reason for the delay is something outside of your control, unless you can prove that the U.S. Post Office lost a timely mailed to check, almost no excuse you offer will be good enough.

If you take a case to trial, and the judge renders an unfavorable opinion, you must pay that judgment within thirty days unless you decide to appeal. If you later appeal, and the appellate court affirms the lower court’s decision or if the Supreme Court denies your writ application, that judgment is final. You have 30 days to pay that judgment plus any accumulated judicial interest. In the unlikely event that the Louisiana Supreme Court hears your writ, and you continue to receive bad news with their ruling, you have 30 days from that absolutely final ruling. But it is probably best if you do not concern yourself with whether a judgment is final or not. A smart adjuster will always inquire from their attorney whether a judgment if final or not, and if a check needs to be cut. Regardless, upon receipt of the judgment, your attorney should immediately notify you of what is owed and the deadlines for presentation of the funds to the other side. This is a hard deadline, and being even one day last is a miserable experience. If you receive this letter/email, stop what you are doing and issue this check…perfectly. We have all had situations where indemnity checks were paid late or improperly, and no claim was made for penalties, but if you pay a judgment late or improperly, no attorney is going to cut you any slack. The penalty is simply too easy for them to recover. So, stop what you were doing and issue the check, and issue it perfectly.

Yes, a final judgment also includes a settlement. Whether you are settling the 1008, or you finally achieved a full and final settlement of a claim that makes you miserable, that has the same effect as a final judgment, and it must be paid within thirty days. When you settle the 1008, the thirty days run from the date the agreement is reached between the attorneys. With a full and final settlement, the thirty days are measured from the date the judge signs the settlement.

However, there are often little things in settlement documents that must also be satisfied. You should discuss these issues in advance with your attorney so as to be forewarned. For example, in a case where you are paying indemnity benefits, unless you have reached an agreement with the claimant that you will stop payment by a certain date, you remain legally obligated to pay benefits until the judge signs the order. So, if you do not pay indemnity benefits up to, and including the date the documents are signed, you have not fully paid the judgment, unless your settlement documents allow for an earlier stop date. If you agree to continue to pay medicals until the settlement is finalized, and you do not pay the bills as they come in, you have not fully paid the judgment. Always know what you are obligated to pay in any settlement outside of the settlement amount and remember the thirty-day payment window remains open until everything under that settlement is resolved. As a rule of thumb, assume that the case continues forward to the judge’s signature in the same state it was in when the agreement was reached.

Never, ever hesitate to ask your attorney to clarify anything related to the payment of a judgment or for the additional terms of any settlement. The “(F)” and “(I)” penalties are bad enough, but you never want to see a “(G)” penalty mentioned.