Managing Litigation Cost for Workers Compensation Cases

Litigation cost is a factor calculated into premium as an allocated expense. Each state retains a record of all allocated cost expenses. Through the various state formulas, all allocated expenses become a part of the experience modification code. The experience modification code sets the stage for premium calculation.

 

 

Fee Determination

 
Plaintiff attorney fees are generally capped as a percentage of the employee’s benefits awarded in contested claims. They also become a part of the final ruling by the judge or mediator. When paid they are paid as part of the indemnity benefit. Since indemnity benefits are already part of the experience modification process there is no separate impact as an allocated expense.

 

Defense costs are based on billable hours at the attorney’s hourly fee rate. Defense attorney fees are payable regardless of a win or a loss of the case. The defense attorney bills are paid on the file in separate direct payment. Legal reserves are required to cover the payments.

 

Billable time includes: telephone calls, legal research, investigative steps, reporting, deposition time, trial time, and trial preparation, witness briefing, consultation time with fellow counsel and or witnesses, as well as negotiating time with plaintiff counsel.
In addition to the lawyer’s time fee, a defense legal bill may include clerical time charges, photocopying fees, postage, subpoena service cost, investigative cost, messenger service, witness fees, paralegal service time, travel time and cost. Some bills may even go so far as to charge for filing time and paper supplies.

 

 

 

Retaining Defense Counsel

 
All too often there can be a scarcity of local defense counsel. Fewer legal firms are taking defense work in rural areas or smaller towns. This limits legal counsel choices. All local claim units may be using the same attorneys. Fee rates and costs may become non-negotiable, and quality and quantity of defense work may be weak. Worst of all, the judges and mediators might give little credence to their defensive presentations. Larger communities might have more defense counsel choices, but all too often there is still a tendency to rely on the same legal firms.

 

Contacting the local legal bar association is one step to locate new attorneys. The association can advise of the current practicing and newly licensed counsel. They will also advise field of practice.

 

Attending a workers compensation court hearing and observing the defense counsel is a second way to search for new legal counsel. Probably the most used method, however, is to obtain a recommendation from professional associates or employers.

 

Before fully engaging any attorney, obtain their resume and request references. After reviewing the resume and contacting the references arrange for a personal interview. Discuss fees, reporting requirements, and all other expectations desired from the attorney. Do not be afraid to offer fees lower than those being asked as many attorneys will adjust fees to obtain business.

 

When reaching an agreement with an attorney follow through with a written confirmation.

 

 

 

Effective Use of Attorneys

 
Since attorney fees and bills are charged by the hour, it is incumbent on the claim technician to limit those hours. The following list of ideas should help:

 

  1. Keep telephone calls to a minimum. Know what you are going to discuss before calling. During the call gather the necessary information and terminate the call as quickly as possible. Document the telephone call information in the claim file notes.
  2. Use e-mail as much as possible and limit them to necessary information. This automatically documents the claim file and reduces time to document a telephone call. Use formal letters and regular mail only as necessary.
  3. Limit the attorney’s need for additional investigations. This is accomplished by the claim technician obtaining all defense and claimant statements. The adjuster should supply all personnel records that may be needed, arrange and forward all information from independent medical examinations, as well as supplying claim file reports and investigation information.
  4. Require a legal cost estimate and follow up on this for necessary revisions. Use the estimates as a basis for legal reserving.
  5. Require the attorney to obtain permission to do any additional investigations, hire private investigators, and schedule depositions (if statements are in the file defense depositions should be minimal).
  6. Limit verbosity in reporting. Once the attorney has made initial assessment (which should include a full review of the loss facts) and given a plan of action, it will only be necessary to comment on current happenings. It is not necessary to have the attorney copy the claim file on interrogatories, depositions etc. These are seldom needed if the attorney is reporting on the findings and results. The cost of reproduction and mailing can be eliminated.
  7. Obtain all information the attorney may request as promptly as possible.
  8. Try to employ more than one attorney. Competition generates better results in litigation and disposition.
  9. Negotiate settlements and agreements as much as possible. Attorney negotiating should be limited to court house steps, pretrial conferences, arbitration, and trial.
  10. When the attorney does negotiate, set limits and authorities. Require a telephone request for additional limits and authorities. If possible, serve subpoenas for the attorney.
  11. Require regular and timely billing by counsel. Audit each bill line by line to ascertain accuracy. It should also conform to the written agreement. Charges should coincide with legal information in the claim file records. If any reductions are necessary, let the attorney know why. Pay the bill promptly to avoid late fees and charges. Check to ascertain that a paralegal fee is not accidentally submitted as the attorney’s fee.
  12. Due to inflation and other impacting factors fees may need to be increased. This should always be done by mutual agreement and direct negotiation.

 

 
Summary

 

Litigation costs impact premium as allocated expenses. Controlling litigation cost is vital and requires the proper choice and use of lawyers.

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

Breaking Down New Jersey Workers Compensation Laws

Workers compensation rules and regulations vary from state to state. With that said, do you know how workers comp is run in New Jersey?

 

For Garden State employers with employees, they are required by law to have workers comp coverage. The state’s Workers Compensation Act (WCA) mandates coverage for corporate officers, while workers of sole proprietors (other than the principal owner) and employees of partnerships (minus the partners) are required to have workers comp coverage. Lastly, employers of domestic labors and farm workers must provide workers comp coverage.

 

If you are a New Jersey business owner with independent contractors under your wing, you are not mandated to offer workers comp insurance, though a sizable number of individual independent contractors who would not be looked upon as employees in other states will be thought of as an employee in New Jersey.

 

If the employer retains the right to decide what should be done and how it will be taken care of, or if the work that is done by the independent contractor is a key part of the activities of the business, New Jersey will look upon the individual as an employee.

 

 

Obtaining Coverage in New Jersey

 

In order to receive comp coverage in the Garden State, there are two options for employers:

 

  1. Acquiring a comp policy through an insurer with authority to conduct business in the state;
  2. Receiving approval from the New Jersey Commissioner of the Department of Banking and Insurance to serve as an independent self-insurer, along with the posting of security if requested Governmental agencies in New Jersey must carry compensation insurance, but are not required to obtain it from an authorized insurer or to be self-insured. They can take part in a governmental insurance pool, or they can maintain a separate appropriation for workers comp.

 

 
Reporting a Claim

 

In those instances when a claim must be reported, the injured worker is required to report the incident to his or her boss within three months of the injury.

 

The notice of injury may be passed on to the employees’ supervisor, personnel team or any worker that holds an authoritative position at the company.

 

Upon hearing of the injury, the company must report the comp claim to the insurer at once. At that point, the insurance company must file the First Report of Injury form with the New Jersey Division of Workers Compensation within 21 days of the of obtaining claim notification.

 

 
How Medical Benefits Are Determined

 

In order for medical benefits to move through, the business owner chooses the medical provider.

 

In the event the employer turns down providing medical treatment, the employee is allowed to choose the medical provider. In an emergency scenario, the employee may receive treatment at any emergency care facility or the emergency room of a hospital without the employers’ approval.

 

Once the initial emergency care has been completed, the employee must treat with the employer’s selected medical provider. All reasonable and required medical treatment including prescriptions and hospitalization are provided and approved under New Jersey’s workers comp statutes for as long as the employee needs medical treatment.

 

 
Dealing with Temporary Total Disability Benefits

 

When it comes to temporary total disability (TTD) benefits, these are calculated as 70 percent of the employees’ average weekly wage, not to go beyond the statutory maximum rate or to drop beneath the statutory minimum rate.

 

There is no annual cost of living adjustment for accidents after Jan. 1, 1980. The maximum amount and minimum amount of TTD benefits is altered regularly by the Commissioner of Labor and Workforce Development.

 

The initial seven days of disability (the waiting period) is not paid to the injured employee unless the worker finds themselves disabled for more than a week. TTD benefits can be paid until the employee returns to his or her job, or reaches maximum medical improvement, or for a maximum of 400 weeks. Permanent

 

 
Dealing with Partial Disability Benefits

 

New Jersey employees are paid permanent partial disability (PPD) benefits for any permanent loss of body function that is the result of an on-the-job injury.

 

Once the employee has gotten to the point of “permanent and stationary” (maximum medical improvement), the employee is paid PPD weekly and PPD is paid after TTD benefits have concluded.

 

The Garden State utilizes a Schedule of Disabilities when it comes to injuries for arms, legs, hands, feet, fingers, toes, vision and hearing. The loss of an arm amounts to 330 weeks of indemnity benefits. The number of weeks of indemnity benefits drops to the loss of a small toe being worth 15 weeks of indemnity benefits (with a week calculated the same as TTD).

 

Injuries to the back, heart and lungs are not scheduled injuries. When a New Jersey worker is dealing with a non-scheduled injury, they will continue to gather TTD benefits, up to 600 weeks or until they are able to go back to their job.

 

 

 

Case for Permanent Total Disability Benefits

 

New Jersey permits the worker to receive 450 weeks of indemnity benefits when the employee can’t return to any form of gainful employment.

 

Benefits can be continued conditionally past the point of the 450 weeks provided the employee has agreed to the prescribed rehabilitation and can show that she/he remains totally disabled.

 

The permanent total disability benefits are paid weekly, based upon 70% of the employees’ average weekly wage, not to exceed the state maximum or to drop beneath the state minimum.

 

 
Looking in at Death Benefits

 

The burial costs in the Garden State are covered for a work-related death up to $3,500. If there is one beneficiary, the death benefits equal 50% of the deceased employee’s average weekly wage.

 

In the case of each additional beneficiary, an added 5% is included up to a maximum of 70%, but not to surpass the maximum weekly benefit rate. The death benefits are payable to a surviving spouse, or spouse and children, or any other member of the family who is able to prove dependency upon the deceased employee.

 

A judge for the Department of Labor and Workforce Development will oversee a hearing to decide how the death benefits are divided by the dependents.

 

Children are defined as being under the age of 18, or under the age of 23 if enrolled full time in an accredited educational institution. A surviving spouse obtains the death benefit for life until the surviving spouse remarries.

 

 
An Overview of Vocational Rehabilitation

 

New Jersey employees’ permanent total disability benefits are referred to the New Jersey Division of Vocational Rehabilitation at the 450 week mark.

 

Permanent total disability benefits may be halted unless the worker has taken part in physical or educational retraining as mandated by the Division of Vocational Rehabilitation.

 

Permanent total disability benefits will continue if the Division of Vocational Rehabilitation certifies the employee is in fact fully disabled.

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

 

 

Social Media Basics for Attorneys and Claims Professionals

Social media is web-based interaction that is highly accessible and utilizes scalable publishing techniques. According to Wikipedia, there are over 300 “active” and “well known” social media sites. Some of the more commonly used social media sites include Facebook, Twitter and Linked In.

 

 

Why Should Claim Handlers Care?

 

Even though there has been a steady decline in the use of social media by American youth, it continues to be a popular form of communication and interaction among Generation X’ers and Baby Boomers. Unlike other forms of communication, social media leaves a permanent record that is digital and easily discoverable. There are also a growing number of data collection services such as Spokeo.com, which compile information from social networks, marketing surveys, real estate listing, government censuses resources and other accessible sources.

 

With the rise in the collection of data, there are several benefits to the workers’ compensation claim handler.

 

• Cost effective form of surveillance: Obtain background information and checking honesty/integrity of claimant;

• Discovery: Monitor post-injury activities, or verify limitations or severity of injury; and

• Legal ramifications: Credibility of the party/witness and facts of case – damages/liability, jury considerations, etc.

 

 

Ethics for Social Media

 

Attorneys using social media as part of their discovery efforts should be aware of ethical issues. Professional conduct rules may vary from jurisdiction-to-jurisdiction, so it is important to check when handling any case.

 

• RULE 1.6: Confidentiality of Information

• RULE 4.2: Communication with Person Represented by Counsel

• RULE 4.3: Dealing With Unrepresented Person

• RULE 5.3: Responsibility for Non-Lawyer Assistants

• RULE 8.4: Misconduct

 

Lawyers should also be aware that in at least one jurisdiction, failure to investigate ethically social networking sites violated the lawyer’s duty of competence and diligence.

 

 

Case Law and Social Media

 

Courts are becoming more aware of social media and its societal implications on the judicial system. It is important to be aware of legal precedent and how it can influence your case.

 

Beye v. Horizon Blue Cross Blue Shield of N.J., No. 2:06-cv-5377-FSH-PS, (D.N.J. Dec. 14, 2007). The Insurer sought production of all e-mails, journals, diaries, and communications involving eating disorders or symptoms related to the Claimant. The court allowed for broad discovery related to Facebook and MySpace that was shared with other people.

 

Bass v. Miss Porter’s School, No. 3:08cv1807 (JBA), 2009 WL 3724968 (D. Conn. Oct. 27, 2009). Litigation involved the harassment of a high school student at an elite boarding school. The court held discovery “should not be limited to plaintiff’s own determination of what may be ‘reasonably calculated’ to lead to the discovery of admissible evidence.”

 

Moreno v. Hanford Sentinel Inc., 91 Cal Rptr. 3d 858, 862 (Cal. Ct. App. 2009). The court determined that person who makes information available to anyone with a computer also makes the information available to the public at large.

 

EEOC v. Simply Storage Management, LLC, No. 1:09-cv-1223-WTL-DML, (S.D. Ind. May 11, 2010). The Employee objected to demand for production of documents related to social networking. The judge ordered Employee to produce social networking profile information.

 

 

Social Media and Ethical Claim Management

 

Claim professionals should be aware of rules or laws that govern discovery in workers’ compensation claims. While some jurisdictions have adopted ethical codes, it is important to note that failure to follow adopted litigation norms can harm the interests of your company, client, put your license and/or job in jeopardy and subject you to civil fines.

 

• Claim handlers should use social media as a discovery tool and incorporate this information into recorded statements;

 

• Claim handlers should be aware of various ethical and professional limitations involved in social media “discovery;”

 

• Claim handlers should be aware that some items may not be discoverable in court; and

 

• Claim handlers should use professional judgment in personal posts, tweets, blogs, etc.

 

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

 
Editor Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

 

In Work Comp, Don’t Be Surprised If…

Work comp is a “remedial statute” which did not exist prior to the first decade of the 20th Century. In addition, most comp laws are “administrative” laws which are not governed by strict rules of procedure, as are negligence claims. And just to complicate things a bit more, most comp laws have a rule that a decision does not have to be based on “preponderance of evidence” – all that is required is a “scintilla” of evidence, meaning just a bit more than nothing at all. Also, comp laws do not have the rule of “stare decisis” (pronounced “starry decisis”, not rhyming with “share”), which means that the comp board can contradict any of it’s decisions with any and all prior decisions.

 

And what about which comp board takes jurisdiction over an accident which occurs in state A, involving an employer from state B, whose home office is in state C?

 

What about all that? Lots of unpleasant surprises.

 
Unpleasant Surprises At Work Comp Hearings

 

Informal Rules of Procedure

 

First, informal rules of procedure. A hearing officer can admit hearsay and facts which are not remotely relevant, allowing witnesses to discuss all manner of things that would never be permitted in formal courts.

 

And do not be quick to assume that you have won because every witness but one testified on your behalf, except for that vague, largely unintelligible witness with memory challenges. If that’s the one the judge wishes to believe, you just may have lost.

 

Have you been to the Board 99 times and won on the same issue? You may, on identical facts, lose the 100th time. It doesn’t matter that you, or anyone else, has ALWAYS won on those facts.

 
Multi-State Jurisdiction

 

Now we come to the issue of which state takes jurisdiction when two, three or even five states could be appropriate. The answer is…………….ALL can simultaneously take jurisdiction. However, the awards, when totaled, cannot exceed the maximum in the state that has the highest comp rates.

 

But really, does that ever happen? Yes, all the time, especially with crew members of commercial airlines. Your author had to endure a period where a New York City comp firm managed to get most of the flight crews to sign up for NY comp, no matter where or how the injury occurred, or even if the claim was already in progress in several states. The idea faded only when the workers discovered that NY rates were the lowest and, just maybe, they might have to appear a few times at the NYC board.

 

Of course, the extreme examples are rare – but possible. Which is why employers should never – EVER – rely on common sense in predicting what problems they may face in comp.

 
Best Preventative Measure Is To Gather Facts & Relay Them To Carrier

 

And the best preventative measure an employer can take is to gather facts and relay them to the carrier. A low, low chance of a bad surprise is far better than rolling the dice at a hearing.

 

 

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Don’t Overlook Workers Comp Needs for Volunteers

As more companies and organizations nationwide are discovering, volunteering can be beneficial to both the employer and the employee, in this case, someone volunteering to work for your company.

 
Whether you run a major company, a not-for-profit charity or the smallest of businesses in the smallest of towns, volunteers can be of great benefit to your goals as a business person.

 

 

 

Americans Volunteered Nearly 7.9 Billion Hours

 

According to a 2013 national study from the Corporation for National and Community Service (CNCS) and the National Conference on Citizenship (NCoC), one in four adults (26.5 percent) volunteered through an organization in 2012, demonstrating that volunteering remains an important activity for millions of Americans.

 
Altogether, 64.5 million Americans volunteered nearly 7.9 billion hours in 2012; the estimated value of this volunteer service is nearly $175 billion, based on the Independent Sector’s estimate of the average value of a volunteer hour.

 
With that said, what are the rules and regulations for business owners and others when they have volunteers working under them?

 
Volunteering typically means one is working without monetary compensation, but what about other benefits or provisions they should be given, including workers compensation?

 

 

 

What If a Volunteer is injured on the Job?

 
One of the biggest concerns for anyone overseeing a business that utilizes volunteer workers is an on-the-job injury.
While something as simple as a paper cut or small bruise likely doesn’t involve any concern, things like falls, notable lacerations and other injuries could and should involve concern, especially if the person employing the volunteer does not have proper workers compensation coverage.

 
According to information from CIMA Volunteers Insurance, laws vary from state to state in regard to providing coverage for volunteers.

 
In cases where a state does not have such a requirement, it is not unheard of for organizations and other such businesses to acquire accidental medical reimbursement policy coverage, allowing them to be protected should a volunteer or volunteers be hurt on the job.

 

 
One such scenario is the following:

 
• A volunteer working for an organization that builds homes for the homeless is injured during a construction project. The business/organization in charge of constructing said home does not have workers comp coverage. As a result, will the injured party turn around and sue the organization/business to pay for their medical expenses? Just as any organization that uses vehicles to voluntarily deliver products and services to those in need should have the proper auto insurance coverage, they too will want drivers to have coverage.

 
Whether or not your state provides coverage for volunteer workers is something your business/organization needs to know before accepting any volunteer workers.

 

 
Sample of Volunteer Workers Compensation State Laws:

 
New York – In the Empire State, those people serving as volunteers for nonprofit organization and receive no monetary compensation are NOT covered;

 
Wisconsin – Here you will find the state’s workers compensation insurance act does in fact NOT provide comp coverage for volunteers, including volunteers of non-profit organizations that attain financial compensation or other things of value totaling not more than $10.00 per week. (s.102.07(11) and 102.07(11m)). Volunteers cannot be covered under a workers comp policy and cannot receive workers comp benefits if they incur an injury or illness during the course of their voluntary service. Lastly, the workers comp law has no jurisdiction over any other form of relief that may be available to a volunteer;

 
South Carolina – In the Palmetto State, unpaid volunteers are looked upon as gratuitous employees, and are not subject to the Workers Compensation Act. Organizations that have volunteers working under their watch can obtain coverage/insurance for volunteers;

 
Alaska – In the nation’s last frontier, the state’s Workers Compensation Act requires each employer having one or more employees in Alaska to obtain workers comp insurance, unless the employer has been approved as a self-insurer. Determining employee status is accomplished utilizing the relative-nature-of-the-work-test as set out in Alaska Regulation 8 AAC 45.890. There are few exceptions to those who need to be covered under a workers’ compensation policy. Generally speaking, those include: sole proprietors in a sole proprietorship; general partners in a partnership; executive officers in a nonprofit corporation, members in a member managed limited liability company, part-time baby-sitters, cleaning persons (non-commercial), harvest help and similar part-time/transient help, sports officials for amateur events, contract entertainers, commercial fishers, taxicab drivers whose compensation is by contractual arrangement, a participant in the Alaska temporary assistance program, and professional hockey team players and coaches if those persons are covered under a health care insurance plan. In addition, executive officers in a for-profit corporation may exempt themselves by filing an Executive Officer Waiver with the department.

 
Other special provisions set out in statute include:

 
• High school students in work study programs are covered under the Act as employees of the state;
• Volunteer emergency medical technicians are covered under the Act as employees of the state;
• Volunteer fire fighters are covered under the act as employees of the local fire department.

 

 

As you can see, volunteers typically do not fall under the same category when it comes to regular employees.

 

Whether you head a small or large organization or a regular business, be sure to check with your state’s workers comp department to know and understand the workers compensation rules for volunteers.

 

 

 

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact: mstack@reduceyourworkerscomp.com.

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Defense In Depth On Work Comp Claims: The Employer’s Role

“Defense in depth” is a principal from conflict theory which promotes using several defenses in coordination instead of seeing them as separate defenses to be used one at a time. Sometimes, the phrase “mutually supporting” is used.

 

In work comp hearings, defense issues often are identified and documented but they are not processed so that the use in hearings is enhanced. In addition an investigation will be halted when “enough” evidence is obtained or, worse, when one defense has so much evidence that an investigation will be halted before additional issues are located.

 

 

In Hearings Nearly All Doubts Are Resolved in Favor of Injured Worker

 

In hearings such as work comp, where nearly all doubts are resolved in favor of the worker, it is hard to imagine that the defense could grow so comfortable as to settle for less than a reasonable maximum of information, but comp is a bulk process with highly repetitious fact patterns, leading to fact and law burn-out.

 

What can the employer do about all of this? The role of the employer in many states has been minimized without much complaint by carriers. However, the employer is the first and best source of information.

 

The sticking point, where useful information is stopped in its tracks, is the employer report to the carrier and/or comp board of the alleged workers comp incident. That is nearly always due to the fact that the forms given to employers have many questions but little space to write detailed explanations and itemize a list of objections to the claim. An employer who is given only one line or less to “describe the incident” may think that all claims can be fully described in twenty words or less, or that it’s a rule of the comp board that twenty words are the most that will be tolerated.

 

 

 

“See Attached” Is The Best Answer, “Unknown” is the Worst

 

 

The employer can enhance its reporting skills by simply inserting “see attached” as the answer to complex questions. Your correspondent has seen claims won where the employer attached a five page explanation, with lists of names of witnesses and sources of information. This in turn, led to a carrier putting a retired police detective to perform further investigation and search for evidence. In one notable case, the detailed explanation by an employer actually led to the carrier obtaining a copy of a confession to murder for reasons completely unrelated to the employer’s work, resulting in a dismissal of a death claim. (The claim was paid by a different employer, whose employee had a grudge and knew the victim from that job.)

 

Detailed reporting by employers, using those “see attached” documents, leads to a far more complex presentation and, therefore, to mutually supporting issues.

 

“See attached” is the best of answers. What is the worst? “Unknown”!!! Yet it is the most common answer which appears on employer reports.

 

Nothing is truly unknown, but an employer can say that after a full investigation no facts emerged which could corroborate the claim.

 

 

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

©2014 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.

 

WORK COMP CALCULATOR:   http://www.LowerWC.com/calculator.php

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

NY Decision May Lower Construction & Transportation Workers Comp Costs

A case still being argued in NY’s highest court (Auqui v. Seven Thirty One, Ltd. Partnership.) may very well result in lower negligence costs for high risk employers, such as in construction and transportation, where an injury results in both a comp claim and a negligence suit.

 

 

Workers Compensation Provided Money During Negligence Claim

 

In the past, it was taken for granted that the comp claim provided a fast, albeit small, stream of wage loss money and medical treatment, both essential to “financing” a negligence claim, which would take years to resolve. Furthermore, until a few years ago, the worker would always be found to have a continuing, permanent disability – which could be used to bargain for a larger negligence settlement.

 

But in recent years, the sheer volume in NY of permanent disability findings in comp were so expensive, and so out of line with other states, that a series of changes were made to halt the rubber-stamp “permanent disabilities”.

 

 

New Case Changed Influence of Work Comp on Negligence Settlement

 

Recently, the inevitable happened. A food truck delivery worker has hit by plywood which blew off a construction site. The worker filed a comp claim and then sued the premises under construction. But, long before serious settlement talks could begin on the negligence case, the Workers’ Compensation Board found that the worker no longer had a continuing disability. That, of course, completely changed the expected outcome.

 

What followed was a long series of motions in the higher courts on the issue of whether the Board’s findings could be used as determinative in the negligence claim. The last finding by the highest court was that the Board’s determination was indeed binding under “collateral estoppel”.

 

Currently, there are motions pending to reargue the finding, with nine outside parties (mostly unions and attorney interest groups) filing “amicus curiae” briefs. This means that although they are not part of the claim they have great interests in the outcome and are offered a chance to submit an argument.

 

 

Transportation & Construction Could See Lower Workers Comp Costs

 

So, what does this mean for employers in transportation and construction? It means that the number and duration of their compensation claims can be expected to shrink significantly. The new Board procedures and guidelines, if upheld, will place a large downside on keeping a comp claim open, and running the risk of having the rug pulled out as the time for settlement approaches.

 

The seriousness of pending decisions can be measured by the presence of amicus briefs, which, overall, are rather rare – especially in comp. So employers should be aware that something is in the works which could very well lower comp costs.

 

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2013 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional about workers comp issues.

NY, Affordable Health Care, Work Comp and Employers

Since WWII, work comp has had growing complexity of interactions with other laws and plans offering medical benefits. For the most part, the interactions were behind the scenes and left to insurance professionals. All of this seems to have changed.

 

 

Major Law Changes Have Significant Impact On Employers

 

In 1982, a major change in the comp laws occurred but was little noticed for over five years. Medicare was given the right to file a state workers compensation claim, on its own behalf, if it felt it was paying medical for what should be a comp claim. As computer databases on all state workers comp claims grew, the law suddenly had very large, sharp teeth.

 

But now, the Affordable Care provisions are also added. Already, it can be predicted that many employees would rather “protect” themselves by filing comp claims and put as much of their medical as possible under a state law which seems far friendlier than federal benefits.

 

But how does this affect employers?

 

 

Federal Computers Detect Merest Hint of Workers Compensation

 

Consider the powerful federal computers used to oversee health benefits. They are already in place to detect the merest hint of a workers compensation claim which could transfer liability from the federal government to a private employer. They have, in fact, the largest medical cost control program in history already in place.

 

What happens if that computer notices that an employee who had three minor back claims over a period of years is suddenly requiring back surgery? It is entirely predictable that a claim for medical reimbursement and transfer of future liability will be made. But how and where will this be resolved? Maybe at the state comp board? Or maybe in a federal agency or court.

 

However it will be handled, it will be neither quick, cheap or largely favorable to employers. And what will it do to experience modifiers?

 

The problems only begin there. The last employer, or carrier, will seek to apportion with other prior claims. And New York has recently abolished Sect. 25-a, a part of the comp law that paid old reopened claims out of a special fund, instead of placing it on the former employer and carrier.

 

 

Today’s Technology Can Work Against Employers

 

In prior decades, before computers and federal involvement, claim material was paper and, if old, was stored in warehouses. Most claims people preferred to forget the past rather than dig it up with great effort and expense. But computers don’t treat information in such a manner. Past claims will never be forgotten. This is particularly true if a large powerful party gains an advantage from a near perfect memory.

 

Few people not involved in day to day comp operations are aware that the sheer bulk of records compelled a “close is good enough” approach. The comp systems operated, ironically, because most people, workers included, were not determined to obtain the last nickle on every claim, especially on smaller claims.

 

But a computer has no shame and never tires. The rules of engagement are going to be fierce.

 

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2013 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional about workers comp issues.

Control The Cost Of Your Workers Compensation Legal Bills

Self-insured employers frequently are faced with the challenge of knowing whether or not they are getting good value for their dollars when paying their legal bills. Self-insured employers have a smaller claim volume than the standard workers’ compensation insurance company, and hence have a smaller need for defense attorneys. However, as legal fees can be a significant portion of the cost of litigated claims, it is important for self-insured employers to properly manage their legal cost.

 

 

Set of Billing Guidelines Needs To Be Established

 

Prior to the assignment of a workers’ compensation claim to a defense firm, the self-insured employer needs to establish with the defense firm a set of billing guidelines for the legal service bills. Criteria that should be included in the billing guideline include:

 

• The stated hourly rates for senior partners, partners, associates and paralegals

• Secretarial support time should not be billed

• Any changes in hourly rates will apply only to new cases, with no hourly rate changes on pending case

• All activity and time spent on the file is to be itemized and billed individually, with no bulk time or block billing for multiple activities

• All billing will be increments of one-tenth (0.1) hours

• There will be no re-assignment of the principal attorney on the case without the self-insured employer’s prior agreement

• All discovery issues/items are to be pre-approved by the self-insured employer

• The frequency of service bills, whether monthly, quarterly or semi-annually should be agreed to

• Internal consultations, training of associates and paralegals, and inter-office conferencing should not be charged

• Billing for legal research will not be considered unless it is outside of the normal parameters of the expertise of the defense attorney

 

Control Additional Expenses

 

Often overlooked are additional legal expenses. Criteria for expenses should be established prior to the assignment of the workers’ compensation claim to the defense attorney. Common criteria for legal expenses include:

 

• All travel outside of the local area should be pre-approved by the self-insured employer

 

• Air fare will be at the coach rate after pre-approval

 

• Motel stays should be in the mid-price range

 

• Travel time should be capped (8 hours per day)

 

• Automobile mileage will be reimbursed at the Internal Revenue Service current business mileage rate

 

• Telephone expenses should be not be charged

 

• Photocopy charges per page should be agreed to ($.10 per page is common) and should be itemized

 

• FedEx, UPS and USPS delivery charges will be paid, if not due to inefficiencies in the defense attorney’s office

 

• Postage to be paid only if higher than the single stamp rate and should be itemized

 

• Subpoena service should be billed at cost

 

• Any unusual expense should be pre-approved by the self-insured employer

 

 

Non-Reimbursable Defense Costs

 

Sometimes defense attorneys get creative in their billing of time and expenses. The following cost should not be reimbursed to defense counsel:

• Any overhead cost of doing business (overhead cost are already included in the attorney’s hourly rate)

o Office rent, utilities, storage of files

o Secretarial support

 File/case creation

 Bill preparation

 Phone messages

o Computer usage / fax machine usage

• Mark-ups on bills submitted by vendors

• Equipment rentals

By establishing with defense counsel prior to case assignment what is acceptable billing behavior, the self-insured employer avoids unhappy surprises and hassles with the legal bills. The legal billing guidelines should be incorporated into your overall litigation management program.

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

 

©2013 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional about workers comp issues.

NY Work Comp and Attorney Contingent Fees – Getting It Backwards

Attorney fees for disability have had a long, troubled history In the USA. In the late 19th century, lawsuits for disability began to surge, especially among poorer workers in dangerous employments. The ethical rules at the time did not allow for contingent fees, but how else could a poor, recent immigrant, obtain a lawyer to handle a disability lawsuit?

 

When employer liability laws emerged in the decades after the Civil War, the worker received the benefit of having three traditional defenses lifted, i.e., contributory negligence, assumption of the risk and the fellow servant rule. With those barriers gone, many lawyers in northeastern cities jumped at the chance of representing many new arrivals.

 

 

Volume of Potential Claims Led To Ambulance Chasing

 

But the sheer volume of potential claims led to ambulance chasing and fast, cheap settlements. By the early years of the 20th century, the situation had grown so bad that court calendars in major cities were clogged with dubious negligence claims (the worthy claims were becoming hidden under them) and an industry of locating and steering workers to attorneys, themselves members of recently arrived group, was quickly growing.

 

The response was workers compensation laws, enacted not to make benefits easier, but to restrict the tsunami of bad claims. In the early laws, and still on the books, were regulation of attorney fees, which required approval of the comp board in order to be collected. Another feature in some state laws was the eyebrow raising requirement that attorney fees were in no case to be contingent on a percentage of the worker’s recovery. That meant the fee system that propped up the employer liability laws was to be halted.

 

Clarence W. Hobbs, first president of the National Council of Workmen’s Compensation (NCCI) and founder of the New York Compensation Insurance Rating Board was blunt in his 1939 book on the early history of comp. The most beneficial change brought by the comp laws was the abolition of contingency fees which, he felt, were solely for the benefit of a “noisome horde of ambulance chasers”.

 

 

Today Work Comp Still Dominated By Contingency Fees

 

So what happened? Today, work comp is dominated by contingency fees. In NY, for example, the comp law continues to have a provision barring percentage contingent recovery, but allows no other fee system in practice. For large final settlements, the fees awarded are 10-15% of the settlement. No fees are ever permitted unless there is a new award, and the fee awarded is always a percentage of the new money awarded.

 

How did this reversal, without a change in the laws, come about? There appears to have been no conscious intellectual struggle with the law. The change came about solely because contingent fees seemed to be so logical. The entire negligence system, all but universally using contingent fees, couldn’t be wrong, could it? What of the comp law sections barring such fees? Amazingly, it doesn’t appear that anyone was aware of the sections.

 

What sort of fees did the drafters have in mind, if not percentage contingent? It seems that a fixed modest fee for all attorney appearances was what was anticipated. How did that quickly drift into contingency? It seems that a few decades after the comp laws were passed, the public perception that disability and lawyers were firmly linked by negligence contingency, even if the comp law was never intended to be a mini-negligence system.”Negligence envy” had conquered the comp system.

 

 

Follow The Money To Know What Good & What Ill You Will See

 

All the attempts at reforming comp systems have avoided colliding with the dinosaur at the conference table. A former chief judge of New York’s highest court defended comp contingent fees with the words, “Lawyers should not get more if their clients get less”, but failed to explain how getting more disability was getting less of a result. Effective return to work programs have been the primary victim of that view.

 

If you know how the lawyers are paid, you will know, well in advance, what good and what ill you will see.

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

©2013 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law.


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional about workers comp issues.

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