The opinion
MOSK, J.
I dissent. The government insurance fund responsible for supplying DuBois with compensation benefits while he was disabled acted with
*400 complete incompetence in handling his claim. Though it stipulated to the award, it failed to pay him, failed to respond to his request for payment, appeared at the hearing regarding payment unable to say whether it had paid him or not, and finally, six months after the award was made, asked for a continuance to check its records to see if it had paid him or not.
A government insurance fund that so injures a worker by such unreasonable delay of the payment of a stipulated workers’ compensation award should pay the same penalty to the worker that is assessed against a private workers’ compensation insurance company or employer for unreasonable delay. I agree with the majority of the Court of Appeal in this case that the goal of our workers’ compensation system to provide prompt support for injured workers, our duty to interpret this statutory scheme liberally with a view to promoting the goal of compensation, and the legislative history of the particular statute at issue support this outcome.
We have observed that the underlying policy of the workers’ compensation statutes “ ‘as well as the recurrent theme of countless appellate decisions on the matter has been one of a pervasive and abiding solicitude for the work[er].’ ” (Webb v. Workers’ Comp. Appeals Bd. (1980) 28 Cal.3d 621, 626 [ 170 Cal.Rptr. 32 , 620 P.2d 618 ], quoting Moyer v. Workmen’s Comp. Appeals Bd. (1973) 10 Cal.3d 222, 233 [ 110 Cal.Rptr. 144 , 514 P.2d 1224 ].)
Our state’s body of workers’ compensation laws provides for relief from industrial injury and financial support in order to encourage the worker’s ultimate return to the work force. (Moyer v. Workmen’s Comp. Appeals Bd., supra, 10 Cal.3d at p. 233 .)
The prompt payment of statutory benefits—here, vocational rehabilitation benefits—is crucial to the operation of the statutory compensation plan and its central purpose of prompt treatment of industrial injury and encouraging workers’ early return to productive labor. Therefore, since 1945 Labor Code section 5814 1 has provided for a penalty for unreasonable delay in payment. 2
“Section 5814 is the goad for securing timely payment of compensation of injured working men and women without delay. [Citation.] One of its *401 principal purposes is to encourage employers or their workers’ compensation insurance carriers to make payments of compensation in a reasonable and timely fashion to speed the recovery and return to work of injured employees as rapidly as possible. [Citation.] An equally important purpose of section 5814 is to encourage timely payments of compensation to injured working people to promptly ameliorate economic hardship because of the interruption of their employment and concomitant loss of income.” (Consani v. Workers’ Comp. Appeals Bd. (1991) 227 Cal.App.3d 12, 23 [ 277 Cal.Rptr. 619 ], italics added.)
The statutory scheme of workers’ compensation is to be “liberally construed by the courts with the purpose of extending . . . benefits for the protection of persons injured in the course of their employment.” (§ 3202.) We have frequently applied the rule of liberal construction to all aspects of workers’ compensation law. (Webb v. Workers’ Comp. Appeals Bd., supra, 28 Cal.3d at p. 626 , and cases cited.)
The case law establishes that as to section 5814, providing for penalties for delay in payment of benefits, the rule of liberal construction in favor of the employee is particularly necessary. (Kerley v. Workmen’s Comp. App. Bd. (1971) 4 Cal.3d 223, 227 [ 93 Cal.Rptr. 192 , 481 P.2d 200 ]; Klee v. Workers’ Comp. Appeals Bd. (1989) 211 Cal.App.3d 1519, 1524 [ 260 Cal.Rptr. 217 ]; Pascoe v. Workmen’s Comp. Appeals Bd. (1975) 46 Cal.App.3d 146, 157 [ 120 Cal.Rptr. 199 ]; see also Gallamore v. Workers’ Comp. Appeals Bd. (1979) 23 Cal.3d 815, 823, 826 [ 153 Cal.Rptr. 590 , 591 P.2d 1242 ].)
The majority express the view that the Uninsured Employers Fund (Fund) should be exempt from section 5814. Section 5814 provides for no exemption; the rule of liberal construction in favor of the worker does not permit us to read such an exemption into the statute.
The majority claim that section 3716.2 provides the exemption that is missing from section 5814. The statutory history of the provision persuades me otherwise, as does our duty to interpret any ambiguity in favor of the injured worker.
Until 1971, injured workers of employers who had failed to procure workers’ compensation insurance had difficulty obtaining prompt payment of benefits. For this reason the Legislature created the Fund, and obliged the Workers’ Compensation Appeals Board (Board) to make awards for such employees, and, if payment was not forthcoming, order the payment of the award to the injured employee out of the Fund of the state treasury. (§§ 3715, 3716.) Soon thereafter we held that the Fund is liable not only for *402 the underlying compensation award, but also for penalties imposed on employers under sections 4554 and 4555. (Flores v. Workmen’s Comp. Appeals Bd. (1974) 11 Cal.3d 171, 176-178 [113 Cal.Rptr 217, 520 P.2d 1033 ].)
As the majority concede, the Legislature responded to our decision in Flores v. Workmen’s Comp. Appeals Bd., supra, 11 Cal.3d 171 , in 1976 by adding section 3716.2, which, when enacted, provided in pertinent part that “[notwithstanding the precise elements of an award of compensation benefits . . . the . . . Fund [ ] shall pay the claimant only such benefits allowed . . . that would have accrued against an employer properly insured for workers’ compensation liability.” (Stats. 1976, ch. 1036, § 7, p. 4642.)
Unlike the majority, who view this language as clearly establishing that the Fund was liable only for benefits and not for penalties arising from the employer’s failure to pay compensation (maj. opn., ante, p. 391), my view is that this enactment left the Legislature’s precise intent vague. In fact, unless the reader of the statute knew of the Flores decision, the statute on its face relates only to benefits, and says nothing at all about the subject of penalties. Accordingly, it was necessary for the Legislature in 1981 to add file provision that the Fund “shall not be liable for any penalties or for the payment of interest on any awards.” (Stats. 1981, ch. 894, § 4, pp. 3409-3410.) But this language must be read in the context of the statute as a whole, which is aimed at limiting the vicarious liability of the Fund for the misconduct of the employer. It says nothing at all about the liability of the Fund for its own misconduct, that is, unreasonable delay. After all, the misconduct of the Fund had certainly not been an issue in Flores , which was the apparent impetus for the enactment of section 3716.2. Thus it is anomalous to seek a rule as to the Fund’s liability for penalties in that section.
The majority point to no committee report, letter from a proponent or other direct evidence that the Legislature was concerned with exempting the Fund from penalties for its own misconduct when it enacted section 3716.2. The majority point to circumstantial evidence, as in the right of the employee of an uninsured employer to maintain a civil action as well as a claim for workers’ compensation benefits (§§ 3706, 3715), and in the lack of a deadline for the Fund’s payment of benefits. The latter is easily disposed of; the penalty is imposed for “unreasonable delay,” and not for failing to meet the statutory deadline. (§ 5814.) Thus the exact deadline for payment of benefits is not determinative in the imposition of a penalty, whether the delay is attributable to the Fund or to an employer. As for the availability of a civil action, again I see no way in which this reflects any legislative intent with respect to penalties to be imposed upon the Fund for misconduct in cases in which the employee has chosen to maintain a claim for workers’ compensation benefits.
*403 The majority argue that the penalty provision of section 5814 should not apply to the Fund as, unlike a private insurance fund, it has no incentive for delay, and is often slow simply in response to its perpetual shortage of money. The argument is a smokescreen; it has no applicability whatever to the facts of this case. There is no evidence that lack of money was the cause for the delay in the instant case, and, in fact, the Fund offered no explanation or justification for its delay at the hearing before the Board, and ultimately conceded that its delay had been unreasonable. As I demonstrate in detail below, the Fund simply acted with gross incompetence in handling the applicant’s claim. In any event, in a case in which the issue of budget shortfall was actually presented, I would find that to the extent that delay is attributable to lack of funds it is not “unreasonable” in the terms of the statute, and should not be penalized. The majority’s citation to authority limiting excused delay to medical or legal doubt of entitlement to benefits is inapposite; these cases did not consider the question of the Fund’s liability for its own institutional misconduct. (See, e.g., Kerley v. Workmen’s Comp. App. Bd., supra, 4 Cal.3d at p. 230 .)
The profit motive may not cause the Fund to delay, but it is clear from the record in this case that some other improper cause of delay is at work and needs to be addressed. There is disturbing evidence in this record that the Fund is operating with chronic, inexcusable delays and is so slow and unresponsive that it has caused workers’ compensation attorneys to refuse to take cases in which the Fund will be involved. That there is chaos in the administration of the Fund is demonstrated by the evidence of the representative of the Fund at the hearing on this matter long after the award was stipulated that he still could not say whether the Fund had made any payments to the applicant or not! In fact, counsel for the Fund conceded at oral argument that the Fund did not ultimately determine what it had done with respect to payment for more than a year after the stipulated award.
The Board, the body that originally assessed the penalty against the Fund, evidently found the following chronology of incompetence as striking as I do: “On 12/14/89, a hearing was held .... The Applicant, his attorney, and a representative for the Uninsured Employers Fund signed and submitted Stipulations With Request for Award . . . . [f] The Stipulations With Request for Award were reviewed and approved by Workers’ Compensation Judge James M. Bass on 12/14/89. Copies of the Award . . . [were] served by hand on . . .the representative of the Uninsured Employers Fund at the hearing. [j[] On 1/2/90 and 1/24/90, Applicant’s Counsel wrote to the Uninsured Employers Fund requesting compliance with the Award .... On 2/15/90, the Applicant filed a . . . Petition for Penalty alleging that the Uninsured Employers Fund had not made payment in accordance with the *404 Award. . . . There was no objection or other response filed by the Uninsured Employers Fund, [ft] On 5/24/90, a hearing was held . . . [before the Board], The Applicant made an offer of proof that he had received no payments from the Uninsured Employers Fund .... The representative of the Uninsured Employers Fund noted for the record that he could not say one way or the other whether the Uninsured Employers Fund had made any payments. The parties were allowed 15 days to submit written arguments regarding the penalty issue, [ft] On 5/31/90, the Applicant submitted his written argument regarding the penalty issue. On 6/6/90, the Uninsured Employers Fund filed a motion requesting that submission of this matter be delayed so it could investigate what payments might have been made to the Applicant, [ft] The motion filed by the Uninsured Employers Fund requesting additional time to investigate what payments it might have made to the Applicant is improper and untimely. More than 5 months elapsed between the time of the Award and the penalty hearing. More than 4 months elapsed between the Applicant’s first demand for payment for Award and the penalty hearing. More than 3 months elapsed between the filing of the Applicant’s DOR/Petition for Penalty and the penalty hearing. There is no indication in the record, and there was no representation made by the representative of the Uninsured Employers Fund at the trial hearing, that the Uninsured Employers Fund had taken any steps to make payment to the Applicant or to investigate what payments . . . might have been made.”
My only hesitation about urging that a penalty should be assessed against the Fund is that the 10 percent penalty for delay may have little effect on such a torpid agency. Certainly the majority opinion will not be helpful. Hercules’s method at the Augean stables may be more to the point.
For the foregoing reasons, I would hold that the mandate of section 5814 relating to benefits to the injured worker must apply to aid employees whose payments should come promptly, subject only to the reasonableness of the efforts of the Fund. I would affirm the decision of the Court of Appeal.
All statutory references are to the Labor Code unless otherwise indicated.
Section 5814 provides: “When payment of compensation has been unreasonably delayed or refused, either prior to or subsequent to the issuance of an award, the full amount of the order, decision or award shall be increased by 10 percent. The question of delay and the reasonableness of the cause therefor shall be determined by the appeals board in accordance with the facts. Such delay or refusal shall constitute good cause under Section 5803 to rescind, alter or amend the order, decision or award for the purpose of making the increase provided for herein.”