Seafarers Disability When Delayed Assessment Trumps Third Doctor Rule

The Supreme Court's ruling in Esteva v. Wilhelmsen Smith Bell Manning, Inc. clarifies a crucial point for seafarers claiming disability benefits: the mandatory third-doctor referral rule only applies when the company-designated physician has issued a valid, final, and definite assessment within the prescribed periods. When the company fails to timely disclose its assessment, the seafarer cannot be penalized for not contesting it.

The Case: A Seafarer's Delayed Diagnosis

Jessie C. Esteva was hired as a seafarer in January 2012 with a basic monthly salary of US$675.00. In June 2012, while onboard the vessel Ikan Bagang, he began suffering severe back pains. After repatriation in October 2012, he was referred to the company-designated physician at Metropolitan Medical Center, where x-rays revealed osteodegenerative changes in his lumbar spine.

In April 2013, the company-designated physician, Dr. Mylene Cruz-Balbon, issued a Medical Certificate indicating Esteva was given medications for Pott's disease, a form of tuberculosis of the spine, and prescribed at least one year of treatment. Her suggested disability grading was Grade 8, with 2/3 loss of lifting power.

Esteva consulted his own physicians, who certified that his condition would no longer allow him to return to work as a seaman. He then filed a Complaint for total permanent disability benefits under the Collective Bargaining Agreement.

The Issue: When Does the Third Doctor Rule Apply?

The POEA Standard Employment Contract provides that if a doctor appointed by the seafarer disagrees with the company-designated physician's assessment, a third doctor may be jointly agreed upon, and that doctor's decision shall be final and binding.

The Court of Appeals ruled against Esteva, finding that he failed to follow this procedure by immediately filing a Complaint instead of referring the matter to a third doctor. The appellate court upheld the company physician's Grade 8 rating, entitling Esteva only to partial disability compensation.

The Supreme Court reversed, holding that the mandatory third-doctor referral rule has two essential conditions: (1) there must be a valid and timely assessment made by the company-designated physician, and (2) the seafarer's appointed doctor must have refuted that assessment.

The Ruling: No Assessment, No Presumption of Compliance

The Court found that respondents failed to discharge their duty. They did not dispute Esteva's contention that he was never furnished copies of the disability assessment and only learned of it after filing his Complaint.

By the time Esteva learned of Dr. Cruz-Balbon's assessment during the submission of position papers before the Labor Arbiter, the prescribed 240-day period had already lapsed. From October 7, 2012, when Esteva reported to the company-designated physician, to July 19, 2013, when his chosen physician issued the last Medical Certificate, 285 days had passed—well beyond the period allowed by law.

The Court cited Talaroc v. Arpaphil Shipping Corporation in outlining the consequences of a company-designated physician's failure to issue a final assessment:

1. The company-designated physician must issue a final medical assessment within 120 days from the seafarer's report;
2. If the physician fails to give an assessment within 120 days without justifiable reason, the seafarer's disability becomes permanent and total;
3. If the physician fails to assess within 120 days with sufficient justification, the period may be extended to 240 days; and
4. If the physician still fails to assess within the extended 240-day period, the seafarer's disability becomes permanent and total, regardless of justification.

Since respondents belatedly disclosed the assessment and there was nothing on record showing they submitted their findings within the prescribed period, the Court held that a presumption arose that Esteva's disability was total and permanent.

Bad Faith and Damages

The Court also awarded moral and exemplary damages, citing Sharpe Sea Personnel, Inc. v. Mabunay, Jr. The respondents' scheme of withholding the disability rating from Esteva, compelling him to seek opinions from private physicians, and then trying to invalidate those findings for supposed noncompliance with the third-doctor rule constituted bad faith.

Practical Takeaways

• The third-doctor rule is not absolute. It only applies when the company-designated physician has issued a valid, final, and definite assessment within the 120-day or 240-day periods.
• Seafarers should actively request a third-doctor referral when they disagree with a timely company assessment. Failure to do so allows the company to insist on its disability rating.
• Companies must timely disclose assessments. Withholding a disability rating from a seafarer while later using the third-doctor rule against them is bad faith that can justify moral and exemplary damages.
• The 240-day rule creates a presumption. If no final assessment is made within the extended period, the seafarer's disability is presumed total and permanent, regardless of any justification.
• Document everything. Seafarers should keep records of all consultations, treatments, and communications with the company-designated physician to establish the timeline of their disability assessment.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.