Tag Archives: employment defense attorneys

Six Things to Look for in a Workers’ Comp Counsel

When I started defending workers’ comp claims 25 years ago, I learned very quickly what carriers and employers wanted from me—because adjusters would tell me every day about what they DIDN’T like about other defense attorneys. Seeing an opportunity, I made sure I did the OPPOSITE of the complaints.

To paraphrase Rod Serling, I am submitting for your approval six things I learned during those formative years that I believe insurance carriers and self-insured employers are looking for in defense counsel.

Independent thought

Workers’ compensation defense attorneys often simply inform clients that the going rate for a standard-type of injury is this or that. While the client certainly needs to know the going rate, that cannot be where the analysis ends. When I represented TWA years ago, the claims manager told me: “Brad, I can hire trained monkeys to tell me to pay the going rate for standard types of injuries. I pay you to do better than that.”

I define independent thought to be analysis on not only whether a claim is compensable but also on strategies to resolve the claim more favorably than simply paying the going rate. This means laying out a game plan that includes all necessary steps. It doesn't always work, but I know clients appreciate this analysis on the front end of a claim.

Zealous advocacy

When the vast majority of claims are compensable, defense attorneys (like insurance adjusters) can easily develop the “process and pay” mentality. I define this as simply looking at what it will cost to pay the claim and taking the fastest steps necessary to close the file and move on.

Even on compensable claims, I have found that clients are always happy to also receive (and even expect) a game plan for asserting possible defenses. To promote its $1 Dollar Menu a few years ago, McDonald's had a billboard that said: “$1 Legal Advice — Plead Guilty.” When I hear of a defense attorney simply saying: “Claim is compensable, pay this amount,” I always think this is the workers’ comp equivalent of “Plead Guilty.” Even if the employer should pay, the client wants zealous advocacy from the defense attorney on how to best reach the goal.

Regular, substantive communication

This may be the most important piece. It can be broken down into two parts – – regular communication and substantive communication.

I've had a plethora of adjusters over the years tell me war stories about their prior counsel, who would never….ever…do anything on claims. One adjuster told me: “All I ever heard from that attorney was the sound of crickets.” The defense attorney who does this not only violates the ethical duty to keep his or her client properly informed, but is also an attorney who is dealing with a future ex-client.

Employers and carriers also want substantive updates that demonstrate how the attorney is best representing the employer. Communications, whether by letters or through now-common emails, should always encapsulate where the parties are on a claim and where the defense attorney intends to take it. Letters or emails from the defense attorney that say nothing more than “Look at all of the creative ways I have billed your file this month” is NOT what employers and carriers want.

Understanding what constitutes a win

One common complaint about workers’ comp defense is, “The employer almost always loses.” That raises the question: Just what is a win, and what is a loss?

I try to resist watching legal shows on television because, even when such shows are deliciously complex, the outcome of almost every legal proceeding is either guilty or innocent. If a civil court is involved, almost every verdict is for millions of dollars or nothing even though, in reality, almost everything is resolved within the nebulous middle ground. I guess that’s why it’s called fiction.

In workers’ compensation claims, the vast majority are going to be found compensable by the state division of workers' compensation. But, to borrow some analysis from Monopoly, we’re not faced with a choice between Baltic Avenue or Boardwalk with hotels. Rather, we are more often than not fighting over whether we can buy Pacific Avenue for the price of St. Charles Place.

Because the vast majority of claims are settled, I often wonder if the client views the settlement as a win or a loss. Over the years, I have seen carriers and employers examine the relative value of a settlement by looking through the lens of the following criteria:

  • Is the settlement fair in light of the evidence available and the applicable jurisdiction?  (e.g., Illinois claims settle for far more than Missouri claims even if the injuries are identical.)
  • Was the claim resolved within the established reserves?
  • Were the defenses that were raised truly sufficient to obtain a non-compensable award or were they only good enough to use for settlement negotiations?

Creative attempts at problem-solving

All carriers and employers know that most claims are compensable. Rarely have I had clients who expected an award of “not compensable” on every claim or even on most claims.

But most clients expect the defense attorney to at least examine all potential defenses to evaluate how the assertion of such defenses might affect the value of the claim. 

Despite the lofty views that most attorneys have of our profession, most of our jobs can often be distilled down to this concept: We help our clients avoid obstacles. While this is self-evident in criminal law (obstacle — the state wants to put client in prison), such analysis is rarely applied to workers’ comp. 

For example, if a claimant states, “My injury occurred on the job,” this may or may not actually be the case. My job as a defense attorney is to identify factual, medical and legal evidence that might persuade the judge that the “work-related” component of the employee’s injury is not as clear-cut as the employee may believe.

I had one case years ago where the employee claimed he was injured on the job. In his deposition, he admitted that he liked to ride the bull in rodeos. It occurred to me that there must be some association that keeps track of who rides in professional rodeos, and I contacted the Missouri Rodeo Association. I was “shocked” (insert mock assertion of surprise here) that the claimant’s medical care ALWAYS seemed to occur exactly one day after he competed in professional rodeos. After I provided this information to opposing counsel, the claim was quickly dismissed.

My point — the employee’s assertion that he was hurt on the job would normally be sufficient to prove compensability in the absence of other evidence, but my job was to find that other evidence. Carriers and employers want their counsel to explore all possible defenses, even if the probability of success is low, because occasionally (like in my rodeo case) the defenses actually work.

Sticking to your guns

If you ask an adjuster about her greatest pet peeve when it comes to dealing with defense attorneys, one example is most often cited: “I hate it when my defense attorney tells me at the beginning of the case that the claim is only worth $500, and then, on the day of trial, he tries to convince me to pay $20,000 to settle it.”

Years ago, I had a client who pulled files from another attorney and sent them to me. As I reviewed them, I saw a theme. The attorney would often say: “This claim is a fraud, and I wouldn't pay anything more than $500 to settle.” But I didn’t see ANY evidence of fraud in many of the files. I was in the unenviable position of having to tell the client that I thought these claims were not fraudulent, and I provided exposure estimates that were far higher than $500.

I was concerned that the client would say: “Gee, Brad, I liked the advice from the prior guy a lot better.” However, this did not happen. Instead, I heard this: “I thought the prior attorney was simply telling me what I wanted to hear. That's why I pulled the files and sent them to you.”

The lesson I learned here: Clients want the attorney’s honest assessment of the claim, and they don't want the defense attorney to simply tell them what the attorney thinks the client wants to hear. If the client can't rely on my analysis, then I'm not doing my job correctly. If the case is worth $20,000, I must tell this to the client as soon as it becomes possible to arrive at such a valuation. If I wait until the day of trial to disclose the true value of the claim, the client will think that I am simply afraid to take the case to trial.

Conclusion              

One could easily distill all these comments into a single concept: There must be a good working relationship between the defense attorney and the carrier/employer, one that is based on shared values, frequent communication and deliberative communication (meaning the attorney and the client jointly develop the goal for a particular claim and then both take the steps necessary to reach that goal). If reality matches this ideal, the defense attorney and the carrier/employer will probably be working together for a long time.

An Old Trick That Reduces Workers' Comp Claim Costs

Let me assure you from the outset that this article has nothing to do with losing belly fat, curing diabetes with cinnamon or buying real estate with no money down. And, unlike other enticing articles that make you wade through 30 minutes before they tell you about that “one trick,” I’ll get right to it. The trick is: communicate with injured workers.

This is something that most workers' comp professionals have known for a long time: Generally speaking, injured workers don't call the TV plaintiff attorneys because they want more money — they call plaintiff attorneys to file a claim because the employer/carrier has not communicated about benefits claimants can expect to receive or how the workers' compensation process works.

I know this to be true because of what plaintiff attorneys tell me. When I have my first conversation with opposing counsel on a new claim, she will often say something along the following lines: “Brad, if your employer/carrier had just explained to my client what was going on, the claimant wouldn't have hired me to file a claim.”

Once the plaintiff attorney tells the claimant about his workers' compensation rights, the claimant then believes that he has “secret” information, and that creates a lack of trust toward the employer.

Listen, you can buy a kidney and find the schematics for a nuclear reactor online these days — and employers think that claimants can't find out about their workers' comp rights? I have one word for you: Google.

So, why do many employers and carriers insist on giving claimants the “mushroom treatment” (kept in the dark and covered with….fertilizer)?  I can think of three reasons.

First, many employers wrongly believe that communicating with the claimant about the workers' comp process will encourage more claimants to hire attorneys and file claims. While this may seem intuitively correct, it is empirically false. Claimants hire attorneys because of too little information, not too much.

Employers think: “If I have a safety meeting on what benefits injured workers receive when they file a comp claim, aren’t I just teaching them how to get more money out of the process?” Legitimate concern. But once an employer understands that the motive to hire an attorney and file a claim is more often driven by uncertainty rather than greed, this concern tends to diminish.

Second, workers' comp professionals (HR directors, safety directors, adjusters, defense attorneys, nurse case managers, etc.) know the process inside and out. We know all of the acronyms, the sequence of events and even a lot of great big medical terms that sound really cool at parties. (“Epicondylectomy” and “acromioclavicular” are two of my favorites.)

It is easy to forget that a claimant experiencing his first work-related injury has NO IDEA about how doctors are chosen, how TTD benefits are calculated or what MMI even means. Because we often fail to discuss comp rights and benefits with claimants without using the legalese and comp terminology that we throw around on a daily basis, the claimant becomes more confused than a dad reading a bicycle assembly guide translated from Chinese. 

Third, I’ve been told by plaintiff attorneys that many claimants are treated from the outset as if their claim is fraudulent. Don’t misunderstand me: I’ve seen my fair share of fraudulent claims – – most workers' comp professionals have. But not every claim is fraudulent. The challenge is spotting the fraudulent claims that are hidden within the legitimate claims. If employers or carriers treat every claimant as a fraud even before there is evidence of fraud, we’re giving free advertising to plaintiff attorneys. 

I say: Bypass the cloak-and-dagger approach, tell the employees up-front about what to expect and watch the volume of litigated claims go down. 

Now, if I could only find that “one trick” to regrow hair!

The Two Must-Haves for Employment Practices Liability Insurance

If you own or manage an organization and have not experienced an employee claim, count yourself lucky—and know that the chances are very good that your luck will change.

Many employers purchase Employment Practices Liability Insurance (EPLI) because general business insurance policies exclude employment-related claims for issues such as discrimination, harassment and wrongful termination.  Many EPLI policies do not, however, cover commonly asserted claims such as wage and hour violations or statutory penalties. The issues are complicated enough that decisions on EPLI require the assistance of two experts: a knowledgeable and trusted insurance broker and an experienced employment defense attorney. The insurance broker will guide you through the various policy options available and provide a wealth of risk-management information.  The defense attorney will advise on the real-world impact a particular policy will have when an employment claim arises.

If you purchase EPLI, you should prepare for employment claims before they are even asserted, by following these steps:

  • Select Defense Counsel in Advance. If you already use trusted employment law counsel, your carrier may allow you to designate your chosen law firm at the time the policy is purchased or renewed.  Some policies allow the insured to select its own counsel without such pre-designation.  Asking the right questions of your broker and specifying at the outset the employment lawyer you want is the best way to ensure that you get the defense counsel of your choice.  
  • Train Staff on Claims Recognition. Train key personnel to recognize a “claim” as it is defined under the EPLI policy.  What constitutes a “claim” is generally defined broadly.  A “claim” may even include pre-lawsuit claims, such as a discrimination complaint filed at a governmental agency like the California Department of Fair Employment and Housing.  Even a “demand” letter from a threatening employee or lawyer may constitute a claim.  As policies change from year to year, the definition of a claim may also change.  Key personnel should know what to do when a potential claim is spotted, including the who, what and when of communicating with the insurance broker or carrier.
  • Develop Protocol for Receipt and Processing of Claims. It is a good idea to have a specific person designated to whom all “claims” are promptly forwarded. The protocol should also include things such as identifying the name of the employee who received the claim and the date, time and how the claim was received.  It is critical to ensure that a potentially covered claim is properly and quickly processed. Communication problems can arise inside organizations because finance and operations executives, who were involved in buying the EPLI policy, tend to be knowledgeable about the terms of the EPLI policy, while human resources personnel tend to be the first to know that a claim has been filed.
  • Be Thoughtful and Precise in “Tendering” Claims to the Carrier. Once a claim arises, carefully consider the requirements in the policy for tendering the claim.  This may involve discussions with legal counsel regarding the pros and cons of tendering a particular claim at all and will definitely include advice on how and what to communicate with the carrier. Careful consideration cannot result in much delay.  EPLI policies typically require very prompt communication of claims and potential claims.  Follow carefully the means and timing of “tendering,” i.e., providing written notice to the carrier, as stated in the policy.   A copy of the lawsuit, administrative charge or “demand” letter should accompany the tender.  Follow up to ensure that the carrier has received the claim and accepted it.

    As a general rule, attorneys' fees and costs incurred to defend a tendered claim may not “count” against the insured's retention (deductible) until the date of tender.   If you incur attorneys’ fees and costs before the claim is tendered to the carrier, your company will likely have to pay those fees plus the full amount of the retention.  Worse yet, if a claim is not tendered in the manner and time frame required by the policy, the claim may be denied.  

The great majority of employers in California should at least seriously consider the addition of an EPLI policy, but not just any policy will do.  Without the expert guidance of a knowledgeable broker and employment counsel, you might be shelling out premium dollars that do not effectively achieve your risk-management objectives.  Once you have a policy, the development of effective protocols for handling claims is essential.  Those protocols will ensure that claims are not denied and that they are positioned to be effectively defended.