Unnecessary Litigation in Workers’ Comp Claims Process: Training and Communication Are Key

John Stahl By John Stahl, Esq.
Dr. Bogdan Savych of the Workers’ Compensation Research Institute (WCRI) said at the outset of his May 10, 2012 webinar entitled “Avoiding Litigation: What Can Employers, Payers and States Do” that the goals of the workers’ compensation system included “delivering benefits without too much unnecessary attorney involvement and litigation.” This presentation summarized a WCRI study that examined several reasons why a workers’ compensation claimant (claimant) hired an attorney and that offered strategies for reducing the costs and delays associated with that legal representation.
Study Overview
The study’s researchers interviewed 6,823 claimants from 11 larger states, which included Texas and Pennsylvania, who sustained injuries between 2000 and 2006 that required more than 7 days of leave. The number of claimants who hired an attorney ranged from approximately 8-percent in Texas to more than 50-percent in Maryland.
A claimant’s perceptions that pursuing workers’ compensation benefits would adversely affect that person’s employment status and/or that a workers’ compensation insurer denied a claim were the primary identified motivations for hiring an attorney.
Role of Adversarial Employer Response
Savych reported generally that a claimant perceiving any form of threat regarding a workers’ compensation claim increased the possibility that that person would seek legal help. It is important to remember that this factor, among others, related to a perception of reality that did not always coincide with the facts.
The first form of employment-related threat was that seeking workers’ compensation benefits would result in retaliation up to and including being fired. The second form of that threat was a supervisor would act based on that supervisor’s perception that a claimant exaggerated the severity of the harm from the reported compensable incident.
The findings regarding the role of a fear of being fired included the statistic that approximately 23-percent of the interviewed claimants felt fairly strongly that seeking workers’ compensation jeopardized their employment with the employer from which they were seeking those benefits. These findings also showed that that perception was highly significant regarding a decision to hire an attorney.
A related fear that the study did not address was concern that filing a workers’ compensation claim would increase the threat of a deportation. Savych stated that a future study may examine that factor.
The perception of threats regarding processing a claim related to indications that an insurer would deny it. Circumstances related to these indications included delayed payments and initial opposition to accepting all or part of a claim.
Role of Injury’s Severity
The degree of an injury’s severity is another variable that Savych concluded affected whether a claimant hired legal counsel. He cited the study’s finding that approximately 7-percent of the claimants who initially reported an injury with the lowest level of severity obtained an attorney; this number increased to roughly 22-percent regarding initial reports of injuries with the highest degree of severity.
Savych noted as well that the element of severity was one of numerous factors that employers and insurers could not control.
Other Uncontrollable Elements
The highest education level that a claimant achieved and the amount of time that that person had worked for an employer before sustaining compensable harm were other factors that impacted whether a claimant hired an attorney. The finding that a claimant who either did not finish high school or did not obtain a college degree was more likely than a college graduate to hire an attorney reflected the same fear regarding future income as the concern related to a retaliatory discharge.
A claimant who was injured within one year of starting employment being much more likely than someone with more tenure to hire an attorney was evidence that an employee feels that his or her job is less secure in the first several months of employment than after that person achieves seniority.
Solutions
The study identified training supervisors on the proper method for responding to a workers’ compensation claim as an important part of a strategy to reduce the costs of attorney involvement in workers’ compensation matters. Reducing a claimant’s perception of a, most likely illegal, threat of retaliation for exercising workers’ compensation rights reduces the corresponding perceived need for legal counsel.
Similarly, providing claimants educational materials and a hotline that offers supplemental information reduces workers’ compensation-related anxiety that prompts seeking legal representation.
The simple solution for insurers is “eliminating [claims-related] system features that encourage payment delays or perceived denials.”
Final Word
Helping ensure that employees understand their workers compensation rights, training supervisors to respect those rights, and co-operating with insurers regarding claims helps maintain the desired non-adversarial nature of the workers’ compensation system.

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