Interest at Mediation

April 2006

In light of the Law Court’s ruling in Hoglund v. Aaskov Plumbing & Heating, employers and insurers should take note of another consequence of reaching an agreement at mediation. Section 205(6) of the Act provides that “when weekly compensation is paid pursuant to an award, interest on the compensation must be paid at the rate of 10% per annum from the date each payment was due, until paid.” The policy of the Workers’ Compensation Board has been to apply this Section to mediation agreements as well. Therefore, if an agreement is reached at mediation, the employer and insurer will be responsible for the interest on those payments as well.