8 Categories To Define Winning Workers’ Comp Litigation Strategy

Legal fees in litigated workers compensation claims can quickly become a significant part of the overall claim cost.  Fortunately, there are some very good ways to control legal cost without having a negative impact on the overall claim settlement.  The best time to establish control over legal fees is when the defense attorney is first employed; however, the best time to control the overall strategy of the litigation is before counsel is even hired.

 

Prior to hiring counsel, a fast track defense strategy should be established to ensure that appropriate actions are taken immediately upon notification of a claim. [The individual components of a fast track strategy are beyond the scope of this article.] The establishment of some basic ground rules for the legal fee billing before the attorney goes to work on the workers compensation claim will result in a measure of cost control without sacrificing the best possible settlement of the claim.

 

Litigation cost control is much more than negotiating the hourly rate and whether or not you will be charged for postage.  There are Best Practices for Litigation Management that should be utilized as a major part of your legal cost control.  The Litigation Management Best Practices can be broken down into easy to measure performance goals.  The following questions will assist you in determining if your current litigation program is controlling cost fully.

 

 

Defense Counsel Selection:

  • Is the defense counsel on your company’s list of approved counsel?
  • Is the defense counsel selected a law firm, or a specific attorney (preferably), within the law firm? Many carriers have an “approved list” of attorneys they use; this doesn’t necessarily mean those are the best attorneys or the most knowledgeable for your purposes, so consider their qualifications carefully and if you have another attorney you wish to use, discuss adding him/her to the list of approved counsel.
  • If the defense attorney is new to representing your company, has the attorney been provided the terms and conditions of the assignment?
  • Have they visited your operations, seen your products and know the basic requirements of the jobs within your workplace?
  • Have the reporting requirements been clearly stated?
  • Was a litigation budget request incorporated into, or attached to, the assignment letter?

 

The Answer:

  • Did the workers compensation adjuster refer the matter to defense counsel timely when an answer must be filed?
  • Does the employer provide the complete facts of the injury immediately such as how the injury occurred, photographs of the accident, information about weight of objects lifted, the employee’s application for employment, information about any prior injuries, prior claims, or prior medical absences. Having the employment file is very helpful.
  • Does the defense attorney have everything needed to complete ALL blanks on the First Report of Injury. Does he have the OSHA Report?
  • Does the defense attorney offer arbitration or mediation as an alternative to protracted litigation?

 

Initial Legal File Handling:

  • Are all medical and/or indemnity issues covered by the workers compensation policy?
  • Is the potential exposure on the claim evaluated correctly?
  • Is there an economic justification for a quick disposition of the claim?
  • Are there any statute defenses that need to be addressed?
  • Are there any unique aspects of the claim that could alter the outcome favorably or unfavorably?
  • Are all potential third parties noted?

 

Defense Counsel Acceptance:

  • Does the defense counsel send an acknowledgment of the assignment to both the workers compensation adjuster and to your workers compensation coordinator?
  • Does the defense counsel provide an initial review and evaluation report within the first 30 day?
  • Does the initial review offer alternative courses of action and the probable outcomes?
  • Does the defense counsel provide a detailed budget plan within the first 30 days?

 

Defense Counsel Staffing:

  • With the acceptance of the assignment, did the defense counsel specify who will be working on the claim?  (Unless the claim is extremely complex, the defense attorney, possibly one junior associate and one paralegal are all of the law firm that should be involved.  Multiple associate attorneys and multiple paralegals will add time [cost] learning the claim before being able to proceed with an activity).
  • Is the hourly rate for each of the law firm members clearly stated?
  • Does the attorney do work that should be done by the paralegal?

 

Budget:

  • Is the budget completely itemized?
  • Is research time included only for extraordinary issues?
  • Does the budget include the cost of any experts that will be retained?

 

Claim Handling:

  • Does the defense counsel make recommendations for any additional adjuster work that should be done?  (Defense attorneys are notorious about having the paralegals do the adjuster’s job of obtaining medical records and other documentation).
  • Does the defense attorney have the adjuster hire other vendors (surveillance, nurse case managers, vocational rehabilitation, etc.) or does the defense attorney complete the adjuster’s work?

 

Actions of Defense Counsel:

  • Is defense counsel avoiding the expenses of depositions and other discovery if it is the intent to settle the claim? Often, some discovery prior to settlement can reduce the amount of the ultimate settlement.
  • Is the defense counsel requesting only necessary depositions?
  • Is the defense counsel reporting significant developments timely?
  • Is the defense counsel reporting the progress of the claim at least every 90 days if the case is moving slowly?
  • Do the reports from defense counsel cover all pertinent information without repeating prior reports?
  • Does each report include an action plan to move the claim forward?

 

Hearings / Trials:

  • Is the hearing / trial date reported as soon as it is known?
  • Does the defense attorney provide a pre-hearing / pre-trial report at least 30 days ahead of hearing / trial?
  • Does the defense attorney provide a strategy for the hearing / trial?
  • Does the defense attorney timely request additional settlement authority when needed?
  • Does the defense attorney provide a timely update or report on the hearing / trial?

 

Legal Bills:

  • Is the amount billed for each activity appropriate?
  • Are the bills properly itemized with each activity being billed separately?  (As opposed to block billing where several activities are lumped together and one charge is given for all work done).
  • Do the legal bills follow the defense attorney stated course of action?
  • Are the legal bills in compliance with the litigation budget?

 

If you are uncomfortable trying to control the litigation cost or feel you need an expert to review the litigated workers compensation claims, please contact us for assistance.

 

 

Author Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Live Stream WC Training: http://workerscompclub.com/livestreamtraining

 

©2017 Amaxx LLC. 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.

21 Considerations in the Selection of Defense Attorneys

Self-insured employers face an issue that employers with insurance through a workers compensation insurance carrier do not have – the selection of the best possible defense attorneys. When an employer purchases insurance through an insurance carrier, a condition of the insurance policy is the insurance carrier will provide the legal defense when needed. The self-insured employer has to take on the responsibility of identifying and selecting their own defense counsel. The following are some recommendations the self-insured employer will need to consider in the defense attorney selection process. (WCxKit)
 

1.      Do you want the large national law firm? The large local law firm? An intermediate size local law firm? A local law firm with two, three or four insurance defense attorneys? A local sole practitioner? If a large or intermediate size law firm, how many defense attorneys do you want assigned to your workers compensation claims? If a small firm, do they have the resources to handle your volume of work comp claims?

2.      Does the insurance defense attorney(s) handle only defense work, or do they also handle work comp claims for employees of other companies?

3.      Are the insurance defense attorney(s) amenable to in-depth interview before you make a selection of who will provide legal services on your work comp claims?

4.      Will the insurance defense attorney(s) provide references from other clients (preferably in your industry) that you can contact?

5.      What is the insurance defense attorneys philosophy on keeping cost down while at the same time providing the best possible defense for your company?

6.      Do the insurance defense attorneys have an in-depth understanding of the workers compensation laws and administrative regulations in the state(s) where they do business?

7.      Do the insurance defense attorneys have extensive experience in hearings before the Board / Commission?

8.      Do the insurance defense attorneys have an in-depth understanding of the peripheral statutes that can impact workers compensation claims – like subrogation, social security disability, vocational rehabilitation, etc.?

9.      Will the insurance defense attorney(s) seek early resolution of the workers compensation claims?

10.  Can the insurance defense attorney(s) provide valuable insight into local practices for arbitration, mediation and settlement negotiations?

11.  Are the insurance defense attorneys amenable to complying with your Litigation Management Best Practices? 

12.  What is the legal fee structure? What is the hourly rate charged for para-legals, junior partners and senior partners?

13.  How will the case be developed and staffed? Will the insurance defense attorney delegate work to subordinates when possible to achieve efficiency and cost-effectiveness without diminishing the defense quality?

14.  What is the billing time frame? Monthly? Quarterly? Yearly? One bill at the end of the claim?

15.  What leeway will the insurance defense attorney(s) have in incurring expenses beyond routine office expenses?

16.  What will be the parameters for the insurance defense attorney to be compensated for legal research?

17.  What will be the reporting requirements? Does the insurance defense attorney(s) provide an initial report outlining how the case will be handled? Monthly reports? Quarterly reports? Reports after each major development?

18.  What are the electronic capabilities of the law firm? Will the law firm be given access to your risk management / claim management information system?

19.  Are the insurance defense attorneys active in the state and local bar association? Are the attorneys active in the bar associations committees on work comp?

20.  Will the insurance defense attorney(s) be amenable to legal fee audits?

21.  Will the insurance defense attorney(s) provide copies of deposition transcripts? Expert Reports? Board / Commission decisions? Medical reports? (WCxKit)

 
 
The proper selection of your defense attorney(s) will have a major impact on the outcome of your workers compensation claims and their overall cost. Similar to selecting a spouse, you want a great match as you will be “married” to the defense attorney in the handling of many or your work comp claims. The proper selection of the defense attorney combined with the appropriate Litigation Management Best Practices will make for a happy union between your self-insurance program and the insurance defense attorney(s) you have chosen.
 

Author Rebecca Shafer
, J.D. President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information.  Contact:  Info@ReduceYourWorkersComp.com
 
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Info@ReduceYourWorkersComp.com.

How to Analyze Law Firm Billing Practices Closely

How cost-efficient is the attorney and firm? You want to look at hourly rates but also not mistake them as the biggest factor in managing costs. Law firms can quote a lower hourly rate but manage to “bill with a heavy pencil” on tasks to compensate for the low rate. Conversely, a worker’s compensation defense attorney with a lofty rate may be a bargain if, due to her experience, she can do the same task in half the time it would take the average lawyer to accomplish it. By all means, ask for a fee schedule but do not be beguiled or seduced by a low hourly rate.

 

Avoid approaching workers compensation legal services with a gasoline price war mentality. This week I drove behind a lawn service truck bearing the following message, “The bitterness of a poor job lingers long past the sweetness of a low price.” If you hire a “cheap” lawyer with a low hourly rate and he ends up botching a winnable contested comp case, the boss will not console you with the fact that you saved $10 per hour on the lawyer’s hourly rate. This is being penny-wise and pound foolish.

 

In conducting due diligence on workers compensation legal defense costs, dig deeper into the firm’s billing culture. Possible questions include:

 

  • Do your attorneys have annual billing quotas? If so, what are they?
  • How heavily are billings factored in associate and partner performance reviews?
  • If we pick your firm, can you lock in these rates for a three-year period?
  • Can you give us budgets up-front estimating the time and expense of each case?
  • Are you willing to consider any alternative to time-and-expense billing?

 

Focus not just on costs but also on the firm’s value. Does the firm offer any value-added services? For example, some law firms publish a newsletter highlighting changes and implications of the comp laws. Some put on free seminars for adjusters. Some may even send an attorney to your office to do a short in-service presentation on a topic germane to workers compensation defense.

 

Ask and encourage your firms to offer these!

 

Kevin Quinley CPCU, AIC, ARM is a claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com

Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.

Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.

Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.

©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com

 

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