Attorney Perspective on Lump Sum Settlements, You Know Outcome Before Papers Are Filed

 

WCRI Study Diligently Done, Missed the Point

 

Workers Compensation Research Institute (WCRI) has recently published a study of post-settlement lump sums and return to work. With all due respect to a diligent study, it must be said that WCRI was given the task of analyzing the engine of a vehicle by commenting on the paint job and the tires – which is no substitute for a look under the hood.

 

Attorneys, however, see and hear far more than they feel comfortable with discussing. Nothing they can’t discuss, of course, but the discussion would be too much “inside baseball”, and would reveal the insider’s view of “disability”.

 

 

Attorney’s Can Tell You Age & Attitude Have Significant Influence

 

WCRI looked at overall RTW patterns. An attorney quickly learns that age and attitude have far more to do with RTW than levels of disability. The group that receives lump sum settlements to close extended disability claims is actually composed of three groups.

 

 

3 Groups: Older Workers, Younger Workers with History, Motivated Workers

 

One is composed of older workers, near retirement, with concurrent degenerative medical conditions. A second is composed of younger workers who have already established a pattern of instability with employment situations and will, in all likelihood, continue that pattern. A third group is workers who truly want to work and have been sidelined more by comp procedures than disability.

 

Unfortunately, an outside researcher is unlikely to be able to sort the groups out, although a comp lawyer could indentify most as they walk into the office for the first time.

 

Statistics fail when they average performances of groups that are truly separate; the conclusion will be either too high or too low for the individual groups. Success will only come when the ability to recognize discrete groups is achieved.

 

 

Greed Rarely Major Factor

 

When the author worked on SIU matters, the question was always how to deal with “fraud” as though that was always synonymous with “greed”. Results in suppressing fraud soared when it was realized that pure greed was almost never the major factor. Instead, anti-social rage, whether or not it produced much money, was the principal motive, followed by short-sighted methods to deal with a plunge in family income coming in second. Neither could be described as “greed”.

 

Lawyers, employers and carriers needn’t have near-psychic levels of skills to predict results in lump-sum settlement situations. Practically speaking, there isn’t an infinite, or even a very large, range of possible outcomes. But the skill at recognizing them can only come from up close and personal interactions with workers. Lawyers can make a prediction quickly, but the employer already knew the outcome before the first papers were filed.

 

 

Employers to Share as Much Information as Possible

 

The lesson for employers is to share as much information with the carrier as soon as possible. The lesson for carriers is to pose the right questions to the right people. The right questions lead to the right claims solutions. There are few surprises.

 

 

 

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.
WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

The Great Debate, Does Employer or Employee Benefit More From Worker Comp

 

Who Benefits More – Employer or Employee?
 
Every year a debate in work comp crops up about whether or not employers derive a benefit from the “exclusive remedy” – a principal that a worker gets no-fault comp, but loses the right to sue for negligence. The debate goes back and forth about who benefits more and seems to assume that the purpose of the exclusive remedy was to benefit the employer, the employee or both. [WCx]
 
 
Has More to Do with History than Who Benefits More
 
In fact, the true purpose has to do with darker underlying forces in the history of the Employers’ Liability laws which preceded comp. The best historian of the Employers’ Liability laws and the reason for their demise was Clarence W. Hobbs, the first head of NCCI and, in the late 1930s, the author of several books on the history of early work comp laws and the demise of Employers’ Liability.
 
 
Attorney Contingency Fees Main Trigger in History of Work Comp
 
The reason for the exclusive remedy was, as will soon be clear, lawyers and contingency fees. Contingency fees (no recovery, no fee) were only accepted grudgingly in US law because, it was correctly believed, that it gave the attorney every reason to exaggerate and manufacture disability.
 
The contingency fee, however, gave the large communities of recent immigrants, working in the most dangerous jobs, access to a lawyer which would have been impossible if they had to pay a fee, win or lose, up front.
 
However, the entire system of contingency fees contained to effective checks on abuse. Cases were openly solicited (read “manufactured”) by “runners”, local bilingual immigrants who fed potential clients to lawyers, for a set finder’s fee. Hobbs described both the runners and lawyers as “a noisome horde of ambulance chasers”. Soon, the courts agreed.
 
 
Courts Overcrowded with Ambulance Chasing Claims
 
The integrity and credibility of courts, judges, juries and verdicts was plunging and the courts themselves, previously rather staid, were becoming packed with mobs of litigants on Employers Liability negligence claims. Waiting in the wings as an alternative was one feature of European and British social law – Workmen’s (sic) Compensation. (The genderless “Worker’s” was a feature of the 1970s.)
 
 
Prime Mover to Work Comp was Civil Courts
 
The prime mover for the change from negligence to worker’s comp was the civil courts. Any benefit to worker or employer was an unintended consequence, although there was no shortage of volunteers to claim credit. In fact, both employer’s groups AND unions simultaneously boasted of their roles. [WCx]
 
Has anything really changed? Contingency fees, a fundamental fixture in work comp, were actually not intended to be part of comp, but they gradually crept back in because the US in the 1930s, alone in the world, assumed they had always been there and made sense.
 
Clarence W. Hobbs, however, strongly disagreed.
 
 
 

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


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

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.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

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