MADISON, Wis.—Retroactively extending a statute limiting how long employers and insurers are liable for workers compensation claims is unconstitutional, Wisconsin’s Supreme Court ruled Thursday.

The ruling in Society Insurance and James Meyer Inc. vs. Labor Industry Review Commission and Gary Liska upholds an appeals court finding that the retroactive extension violates due process and contractual rights.

The high court decision addresses a coverage dispute stemming from a 1982 injury Mr. Liska suffered that required an amputation below his right knee. At the time, Society was required to pay Mr. Liska’s benefits and medical expenses only until June 2, 2002, under an existing 12-year statute of limitations beginning from the date of injury, death or last payment of compensation.

Further payments would be paid from a state Work Injury Supplemental Benefit Fund, court records show. But Wisconsin’s Legislature later amended the state statute of limitations effective April 1, 2006, to retroactively shift the payment burden for traumatic injuries to insurers or employers after 12 years.

Court records show Society paid Mr. Liska temporary total disability benefits intermittently until June 12, 1990. But on Feb. 25, 2004, Mr. Liska filed a claim with Society for additional medical expenses.

Wisconsin’s Supreme Court concluded that extending the time Society must pay benefits violates the insurer’s due process rights under the U.S. and state constitutions. The court also said the extension “substantially impairs Society’s contractual obligation,” violating the U.S. and Wisconsin constitutions.