Friday, August 24, 2012

Lawyers Aren't the Problem; Everyone Is the Problem

There is furious activity in Sacramento as the clock winds down towards deadlines to accomplish workers' compensation reform in the Golden State.

A new amended bill was reviewed by the Office of Legislative Counsel on Wednesday. While there is a possibility that it could be introduced on the Assembly floor today or next week, the contents of the proposed bill reportedly are constantly changing, and WorkCompCentral's sources say there is no guarantee at this time that a bill will even be introduced.

The Legislature adjourns on Aug. 31.

Even Sen. Ted Lieu, D-Torrance, whose Senate Bill 863 is the presumed bill that will carry reform, had not signed off on the proposal and hadn’t even agreed to allow his bill to be amended, his spokesman, Ray Sotero, told WorkCompCentral.

The amended proposal is almost half the pages as the one that was originally obtained by WorkCompCentral and there has been, in my opinion, significant changes that severely limit the savings originally projected, and severely limit the increase in benefits originally projected.

And I presume that since the ball is constantly moving that the projections are more amorphous than ever. But that's not what I'm here to opine about. My rant is about the lawyers...

There were many comments in LinkedIn that it's the lawyers that are at fault with California - presumably the applicant attorneys (those unfamiliar with California workers' compensation, attorneys representing injured workers are referred to as "applicant attorneys" because to litigate a claim one must submit an "Application for Adjudication of Claim"). Yeah - those pesky lawyers are all about the money and damn the system.

I recall reading or hearing somewhere that one of the goals of reform was to reduce the number of attorneys in the system. Presumably the way one does this is to reduce the ability to generate income from litigating a claim. Since California by statute pays attorneys out of the proceeds of a claim then reducing those proceeds should pinch the income potential of a claim, thereby reducing the ability to make money, ergo forcing applicant attorneys out of business.

Of course this is ludicrous thinking because many of the very good applicant attorneys I know are secure in their businesses and will do what it takes to maximize the position of their clients.

This should come as no surprise to anyone. The job of a lawyer is to zealously advocate for the client and in workers' compensation this means taking full advantage of any and all benefits available by law.

Getting rid of, or penalizing, the lawyers is tantamount to getting rid of the accountants at tax season. Unless your tax situation is very basic, my guess is that most of you reading this column retain the services of a tax preparer before each April 15.

Why do you do that? Seems to me that paying your taxes is simple and straight forward - calculate your income, pay the percentage dictated by code to the government.

Oh! Wait!! You mean there are DEDUCTIONS that you believe would improve your tax positions?! What about all of the frictional costs that tax preparers introduce to the simple task of paying taxes? Why not just eliminate accountants and enrolled agents and then reduce the tax bill by the amount of money everyone saves by not hiring these experts?

I get it - so what's good for the goose should not be good for the gander...

I know I will take flack from many for stating what I believe is the obvious - lawyers cannot be eliminated from workers' compensation because benefits are money, and people fight about money. Claimants trust insurance companies about as much as you and I trust the Internal Revenue Service to look out for our better interests.

Add to that the emotional layer of not being able to generate an income, the confusion surrounding the actual process of a claim, the huge amount of paperwork with unintelligible words and terms of art, and you have a motivation for seeking legal counsel.

Want to get rid of attorneys in workers' compensation? Then just pay everything that is claimed.

Oh wait, we can't do that, critics would say, because there are people that will take advantage of that and will make claims that the payer doesn't deem reasonable or worthy.

That's called a DISPUTE: you want something and I don't want you to have it, whatever the reason.

California has about 350,000 disputes every year. When the economy was good and there was more full employment, it was closer to 500,000 disputes every year. Some of those disputes are frivolous. Some of those disputes lack merit. But many of those disputes are real, legitimate claims to benefits for which the law provides.

Tom Rowe, State Fund president and chief executive officer, on Wednesday said on the carrier’s blog that workers’ compensation is an agreement between employers and workers, and “this proposal [presumably the reform bill that has been circulating] clearly recognizes their voice and is a much needed shift back to the efficient system designed and implemented by our Legislature in 1914.”

Excuse me - this isn't 1914. We're 98 years past that. Lots of things have happened since 1914. Couple of world wars, space exploration, population growth, mutual funds and retirement accounts, the Internet ... I could go on. Thinking that a return to the "simple days" of the origination of work comp will resolve California's issues is naive.

Prior to 1914 guess what the problem was - those damned lawyers.

America got to where it is because the Rule of Law is respected and enforced. Yes, The Law is complicated and generally requires a bit of education to understand.

Want to get rid of the lawyers? Remove The Law and let society denigrate to anarchy, or worse, dictatorship.

In Russia women are imprisoned for "hooliganism" after engaging in what would be nothing more than expression of free speech in America. Guess who dictates the Rule of Law in Russia? Not the people...

Lawyers are not The Problem. No more than brokers who falsify quotes to steer business to preferred carriers. No more than doctors who unbundle procedures to maximize billings. No more than businesses who misclassify employees to reduce premiums. No more than government officials who engage in back room deals to further political agendas. No more than the carrier executive using corporate assets to enrich his personal lifestyle.

EVERYONE is the problem. Want reform? Deal with EVERYONE. This means dealing with BOTH the benefit delivery system AND the risk allocation system. Until then it's not reform; it's simply an adjustment.


  1. David, thank you for your excellent reporting on this issue and providing current factual information.

    Agreed. Industry has been "managing" workers' compensation ever since its inception. The "benefit program" called workers' compensation was a mechanism to shift risk and liability. It may have been somewhat reasonable when initially enacted in 1911-14 but the playing field just keeps changing.

    As the risks changed over the decades through the discovery of new occupational illnesses, new technology, new medicine, and changes in the economic, political and judicial landscape, Industry has fought hard to change the odds at successfully navigating the system. The scent of financial reward resulted in collateral enterprises to enter the system, raise the costs and complicate the system further.

    When one looks at the California revised draft "offering" by some to resolve the issues, one looks at a convoluted, complex piece of legislation that raises the odds and limits the benefits. If it doen't work now, it sure won't work later.

    Back-room dealing just work work on this piece of social legislation in the logrun. The light needs to shine in and ideas need to be discussed out in the open. Using a "cram down" procedure is doomed to failure.

    Again, California has the unique opportunity to exploit creativity and frame a proposal that hopefully will benefit Industry and workers and become a model act to be followed nationally. It is not going to be done in a day or a week though.

  2. Pardon my interjection here; the title "Lawyers Aren't the Problem; Everyone Is the Problem" is somewhat misleading and a gross over simplification; The Workers Compensation System has purposefully become ever more litigious in favor of Insurance and Business interest.

    The direct results of the last so called WC reform didn't just cut workers compensation benefits and reduce reasonable medical care to injured workers; it reduced the availability of applicant attorneys by an estimated 40-50%. It was in reality a complete and total give away to the industry at the expense of injured parties.

    Being an injured worker that has attempted/struggled to navigate this massively litigious & unfair debacle for years now. I can attest to the indisputable fact that injured parties are not given fair or balanced access to due process &/or benefits.

    In fact anyone injured on the job today better have a law degree accompany their injury; because the WC courts will hold injured parties accountable to each & every nook/cranny of a very confusing and convoluted supposed "No Fault" legal process.

    It's no secret that injured workers who are able to find competent legal representation, have better outcomes.

    The key words there are "able to find competent" representation. Most injured workers will not receive the benefit of that deemed luxury (supposed Non-necessity) in the current system.

    It took me two years of constant denials & humiliation after contacting just about every workers compensation attorney imaginable just to end up settling out of desperation for some dubious firm that placed my case on a shelf to gather dust for another 1 1/2 years before deciding they would lie & no longer represent me.

    Now a second attorney has had my case for 9 months & hasn't even bothered to read the case file. I would say the applicant attorney's are a serious problem alright...

    When you have some of the best 40-50% of applicant attorney's jump ship due to last reform give away. The effects go much deeper & farther than just the documented reduced benefits and care injured workers don't receive...they also have undermined the very foundation of injured workers due process rights.

    Now the same pundits are at it again..."lets compromise" give the industry some more of what they want...and just maybe a few lucky injured parties will get a few pennies thrown their way in the carnage aftermath..

    When the effected parties "Injured Workers" are not part of the negotiations process and/or the predominant focus of any "Reform". We get just another give away bill & further erosion of care, benefits, and workers basic legal rights.

    Anywise, that was my quick gloss-over 2 cents from the disenfranchised injured worker peanut gallery; hopefully adding the tiniest fleck of balance to this reform conversation.

  3. Thank you both Jon and Stan for your opinions and insight. I appreciate the comment and feedback and hope others do too.

  4. I have lived through several "reforms" during 38 years of legal practice. Every time it is the same thing: no one knows at the time of the proposed legislation just how it will work at ground level. This time again, more bureaucracy is proposed with new programs to be administered by the DWC. It is currently taking more than three months to get a panel after sending a request to the Medical Unit of the DWC. How will the DWC deal with review of medical treatment disputes? Or all the other tasks the proposed legislation foists on it?

    I guess if the new "reforms" cause more litigation, it will be more fodder for the argument that lawyers are causing the problems.

    What an ideal world it would be for business if injured workers just accepted the few crumbs they get, did not contest the denials, just remained silent and unrepresented. If only these injured workers would be sheep that go quietly and without protest to slaughter instead of hiring lawyers to help them with their claims.

  5. As a Risk Management Consultant with one over-riding commitment – never deny an injured worker the benefits they are entitled to under the work come system – I see litigation as the single most costly factor in workers’ comp. Litigated claims comprise 9% of all claims – yet, they consume 82% of all the costs. In 2011, attorneys were paid $961 million (WCIRB numbers) – almost $1 billion. Defense attorneys got 56% more than applicant attorneys.

    On the whole, the rules of the game are fair. Each player isn’t automatically guaranteed their rights are protected in the day-to-day world. Still, there are remedies available to ensure rights are protected within the system. It is, however, a matter of being proactive to ensure one’s rights are realized – not to the detriment of the opposition, but to the realization of the ‘rules of the game’.

    I don’t care about these minor ‘tweaks’ to the rules that give the politicians the political cover they need to appease their constituents. In the end, the ‘rules of the game’ allow me to protect both the injured worker and the employer. The entire workers’ compensation system doesn’t need to be ‘fixed’ – it can ‘heal’ itself if we all work within the sytem.

    Omar Khayyam(Persian Tent Maker - The Rubaiyat) said: Myself when young did eagerly frequent
    Doctor and Saint, and heard great Argument
    About it and about: but evermore
    Came out by the same Door as in I went.

    Let us not complain about the 'system' and how it confounds and defeats us. Let us work within the system to fulfil it's promise - 'all treatment requisit to cure and relieve' the injured worker at the lowest cost to the employer - not the greatest profit to anyone else in the system.

    Anyone out there can post a thousand words in critique and complaint - but this is the essence.

    1. bill stated: "As a Risk Management Consultant with one over-riding commitment – never deny an injured worker the benefits they are entitled to under the work come system"

      Yet, the present reality is that thousands upon thousands of Injured Workers are denied benefits they are entitled to daily...unfortunately your single lone commitment does not change this reality...this proposed bill is not some minor Tweak: it is further erosion of benefits, care, and due process rights of injured parties on a grand & dramatic scale, as was SB899.

      I must ask bill if his solution is similar to the one that Marjory Harris so eloquently stated above...

      "What an ideal world it would be for business if injured workers just accepted the few crumbs they get, did not contest the denials, just remained silent and unrepresented. If only these injured workers would be sheep that go quietly and without protest to slaughter instead of hiring lawyers to help them with their claims."