Cause and Effect: Litigation in the Workers’ Compensation System

Attorneys Increase Work Comp Claim Costs

A current California Workers’ Compensation Institute study discovered that when an injured worker obtains an attorney, claim expenditures increased in excess of $54,000.00.  Another study performed by CWCI in 2012, revealed that employers paid $733 million in defense attorney costs.  These defense attorney costs are a direct result of trying to counteract the applicant attorney’s strategy of increasing claim exposure.  To increase exposure, applicant attorneys often add on new body parts, change a specific injury to a continuous trauma injury, and add on non-industrial conditions like diabetes/high blood pressure.  This increase in the exposure means more money in the applicant attorney’s pocket once the claim settles.  Defending these additional exposures is difficult and increases administrative costs, delay costs, legal costs, medical-legal costs, etc.

Why do Injured Employees Hire Attorneys?   

If workers’ compensation insurance is mandatory for CA based employers to possess and is regulated by the state, why do injured workers get attorneys?  Studies show that attorneys become involved in 80% of all permanent disability claims and 7% of temporary disability claims.  There are many conditions that cause attorney involvement, but generally attorneys get involved when the injured workers treatment is not streamlined, the employer does not show the injured worker empathy for sustaining an injury or overly investigates the injury, treatment is non-certified by Utilization Review, and the doctor determines that the injured worker can’t return to their usual and customary occupation.

Steps Employers Can Take to Help Minimize Litigation

  • Promote a culture of open communication between the injured workers, doctors, and claims administrators.
  • Designate someone in your organization who is responsible for claims management. Educate and empower that individual to make decisions and coordinate activities.  Make sure the injured worker knows where to go for treatment and is never in limbo.
  • Let the claims administrator be the bad cop while the employer plays the good cop.
  • Follow-up with injured employees on how their injury is progressing, answer questions and work out any differences.
  • Look for modified-duty opportunities within your organization to help keep injured employees working as they recover. This diffuses any feelings of helplessness and cuts down on costly lost time benefits.
  • Stay involved when claims become litigated. Remember, it is o.k. to contact the injured worker to discuss return to work opportunities and how their injury is progressing.


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