12-2-13; When Can IL Employers Get Sued by Employees for a Work Injury?; IL WC--When Is It Fingers vs. Hand?; WC Ain't Pawn Stars and much more

Synopsis: When Can an IL Employer Get Sued in Circuit Court by an Employee for a Work Injury? How Does That Impact Claims?


Editor’s comment: We were recently asked this question and have to admit we needed to research further. Please note the IL WC Act has an apparent conflict where one Section says an injured worker can’t sue in Circuit Court--other Sections of the Act that outline the right to sue in tort.


It appears the accurate answers are:


1.    An injured worker can sue their employer in Circuit Court for injuries resulting from intentional acts;

2.    An IL worker can sue their employer in Circuit Court for work injuries when the employer does not have valid workers’ compensation insurance in place on the date of injury.

3.    Where the injury is not compensable under the IL WC Act;

4.    Where  the injury involves an illegally employed minor (upon the minor’s waiver of his or her rights under the Act);

5.    Where the employer acts in a dual capacity, i.e., when the employer also maintains a second and separate legal relationship with the injured party, the employer may be sued in the second, non-employer capacity if it is this separate relationship or entity that is responsible for the injury.


Number 1 above is mildly controversial but only in the sense that it may be challenging to accurately define an intentional injury or wilful act by an “employer.” In our view, if an employer sets out to injure a worker for whatever reason and is successful, there is no defined reason to “protect” such an employer with the provisions of the IL WC Act. We also don’t feel typical WC insurance can or should cover intentional acts leading to insure—such coverage would typically be considered a violation of public policy. Our advice to all clients and readers—if you get hit with a claim for intentional actions leading to a workers’ comp injury, seek advice from a KCB&A defense counsel and report it to your WC and GL carrier--let the pros handle it.


Failure to have Valid WC Insurance Now Opens the Circuit Court Box!


The legal concept outlined in Number 2 above took us mildly by surprise. When reading about recent amendments to the IL WC Act, we didn’t notice this seminal change to our law. That said, we assure our readers on both sides of the IL WC matrix that a lack of WC insurance provides the injured worker or their counsel the right to sue in Circuit Court to recover for the injuries suffered. The applicable provision in the IL WC Act is Section 4(d) which now says:


Employers who are subject to and who knowingly fail to comply with this Section [requiring WC insurance] shall not be entitled to the benefits of this Act during the period of noncompliance, but shall be liable in an action under any other applicable law of this State. In the action, such employer shall not avail himself or herself of the defenses of assumption of risk or negligence or that the injury was due to a co-employee. In the action, proof of the injury shall constitute prima facie evidence of negligence on the part of such employer and the burden shall be on such employer to show freedom of negligence resulting in the injury. The employer shall not join any other defendant in any such civil action. Nothing in this amendatory Act of the 94th General Assembly shall affect the employee's rights under subdivision (a)3 of Section 1 of this Act. Any employer or carrier who makes payments under subdivision (a)3 of Section 1 of this Act shall have a right of reimbursement from the proceeds of any recovery under this Section.


An employee of an uninsured employer, or the employee's dependents in case death ensued, may, instead of proceeding against the employer in a civil action in court, file an application for adjustment of claim with the Commission in accordance with the provisions of this Act and the Commission shall hear and determine the application for adjustment of claim in the manner in which other claims are heard and determined before the Commission.


This is a fairly sweeping provision and provides lots of challenges for risk managers, claims handlers, attorneys and safety folks to be aware of. While it is an ostensibly simply statutory provision, it may create literally hundreds of legal concerns and is something of a “Gordian Knot” that may be endlessly unraveled.


Trust us, a Plaintiff lawyer or a group of Plaintiff lawyers wrote these provisions and the defense side monitoring such legislation missed them:


§  An employer shall not avail himself or herself of the defenses of assumption of risk or negligence or the injury was due to a co-employee—this strips out most major defenses in a Circuit Court claim for work injuries for uninsured employers;

§  Proof of the injury shall constitute prima facie evidence of negligence on the part of such employer and the burden shall be on such employer to show freedom of negligence resulting in the injury. From our reading, this makes for strict liability in a Circuit Court claim against an uninsured employer.

§  The employer shall not join any other defendant in any such civil action. This provision leaves the uninsured employer basically “hung out to dry” for the negligence of any other employer, product manufacturer or arguable tortfeasor in such claims.


This Legislative Provision Looks Simple But Is Fraught with WC Claims/Coverage Land Mines


How would that happen? Well, let’s try to look at the definition of “employer” and what it means to be “uninsured.” We assure most plant managers and other fixed-site employers it isn’t too exciting—you either have WC insurance for your workers or you don’t. However, you have to then take a very careful look at your vendors and support team. If you have a work site and you hire a company or vendor to come to your facility to perform any work at there, you want them to be truly “independent” of your workers’ comp coverage. The only method to insure they are “independent” is to be certain they have WC coverage for every single worker that crosses your door.


However construction and real estate risk managers have the ability to create a legal status known as “statutory employees.” Statutory employees are folks who build, remodel and maintain commercial properties. If you don’t have WC insurance to cover them, they are your employees and it would appear they can now sue you directly in Circuit Court for unlimited damages.


Let’s assume you hire Sam and Sara Sample’s Lawn Service to mow your lawn for the entire year of 2014. Sam and Sara Sample provide you with a COI or certificate of insurance for their workers. Their company is now required to insure they have appropriate workers’ comp coverage for all of his employees. There are three concerns crucial to good claims management, in light of the changes to Section 4(d) of the IL WC Act we highlight above.


v  First, Sam and Sara Sample can “opt out” of WC coverage for themselves as principals or owners of the company and save the premiums needed to cover their own WC injuries. Right now, they might be considered “uninsured employees” of yours and might—note we said might—be able to sue you in Circuit Court for injuries they cause.Never, ever let anyone who works for you “opt out” of WC coverage. You can always expect litigation if such folks are seriously injured or killed at work—the risk and cost of defense are not worth the risk.


v  Second, who are the employees of Sam and Sara Sample that are covered by their COI—can they have two employees or twelve doing work for you? What if they have four workers cutting down one of your trees and then bring four more due to the size of the project? Without any question, if Sam and Sara don’t have valid WC coverage for all of them, they can sue you—we don’t know and can’t predict what a court will do about the lack of WC insurance coverage in this setting. Don’t let your subcontractors bring unknown workers onto your property, ever.


v  Third, what about independent contractors of Sam and Sara Sample? What if they have a lawnmower break down and they bring a different repair contractor onto your property to fix it and the lawnmower repair person doesn’t have coverage, cuts off a finger by mistake and sues you??? In our view, vendor auditing take on a whole new look when you start to consider this new exposure. Don’t let your subcontractors bring unknown subs onto your property, ever.


We strongly suggest you don’t allow any vendor on your premises unless and until you have certain they have full WC coverage for themselves and all their employees that may work on your sites. Please understand lack of valid WC coverage may now result in multi-million exposure for significant injuries, resulting in disability and death of workers that may not be yours!


We appreciate your thoughts and comments. This article was researched and written by Chris St. Peter, J.D. who can be reached at cspeter@keefe-law.com and Eugene F. Keefe, J.D. Please feel free to reply to either of us with any concern.




Synopsis: Okay, IL WC Adjusters—When Is It LOU Fingers and When Is It LOU Hand?


Editor’s comment: We received a question from one of our clients who was confused when a Plaintiff/Petitioner Attorney was working with her on a claim involving undisputed and severe injuries to two fingers. She was trying to best understand why counsel wanted 60% of each of the affected digits along with 30% LOU hand.


What is mildly confusing is the IL WC Act says injury to two or more fingers can be treated as LOU hand:


The loss of 2 or more digits, or one or more phalanges of 2 or more digits, of a hand may be compensated on the basis of partial loss of use of a hand, provided, further, that the loss of 4 digits, or the loss of use of 4 digits, in the same hand shall constitute complete loss of a hand.


In our view, the language provided above doesn’t mean you treat the claim as LOU hand AND LOU fingers. It was also our view, Plaintiff/Petitioner’s attorney was not treating the adjuster with a lot of respect to make such a demand. We felt the attorney may have been trying to take advantage of the confusion that comes from the way the IL WC Act is written.


Please don’t be fooled. You may note the IL WC Act provides 205 weeks for complete loss of use of the hand for injuries after Feb. 1, 2006. The combined values of 76 weeks for the thumb, 43 weeks for the index finger, 38 weeks for the long finger, 27 weeks for the ring finger and 22 weeks for the little finger equal almost the same value—the combined number of weeks is 206.


I am not in a great spot to do the math but let’s say you can settle the claim for


v  60% LOU index finger or 25.8 weeks and

v  60% LOU long finger or 22.8 weeks.


The combined value is 48.6 weeks, by our calculation. This combined value of 48.6 weeks is the equivalent of 23.71% LOU hand. In our view, you can enter into a settlement for the fingers OR the hand would work and such a settlement would be approved. It is also our reasoned legal view, putting them together or paying 60% LOU of each finger AND 23.71% LOU hand would be double-paying the claim. Don’t pay for the fingers AND the hand.


If you got an impairment rating, you would probably get a lower value for settlement than traditional values. Our vote for the top northern and central IL doctor to obtain a solid and reproducible impairment rating for finger/hand injuries is Dr. Michael I. Vender of Hand to Shoulder Associates. http://www.handtoshoulders.com/ For central and southern IL claims, we are happy to make recommendations—send a reply.


Please also note one important thing—never rely solely on legal advice you receive from Plaintiff/Petitioner attorneys. As we have told numerous innocent claims adjusters and other risk managers over the years, their ethical responsibilities are not to you; they have to aggressively represent their clients and get the most money from you possible. On a 24/7/365 basis, if you aren’t sure the information or legal advice you are receiving is 100% accurate, send any KCB&A lawyer an email, like this wise adjuster did. We will give you solid research and accurate answers that you need as rapidly as we possibly can. This service is free--you do not have to send us the entire file to get rapid responses to intricate WC or GL claims questions in IL, IN, WI and MI.




Synopsis: Workers Comp Ain’t Pawn Stars®, Folks. Don’t Ask for Settlement Demands—Make Offers!!


Editor’s comment: We love the hi-jinx at the World Famous Gold and Silver Pawn Shop in Las Vegas, NV, featuring patriarch Richard "Old Man" Harrison, his son Rick Harrison, Rick's son Corey "Big Hoss" Harrison, and Corey's childhood friend, Austin "Chumlee" Russell. Lots of our readers and clients have seen the way they negotiate. Their approach is to review the product for sale or pawn and then ask the customer what they are looking for.


There is a major league problem with using that negotiation approach in workers’ comp claims across the United States. What Rick or Corey or Chumlee are doing in asking for a demand or inquiring as to what the customer is “looking for” is to see if they will accept a lot less than the claim is worth. In our view, that approach to negotiation doesn’t work in the workers’ comp arena.


The reason that won’t work in almost all states of which we are aware, along with federal WC claims handled by the OWCP, you have to get the settlement approved by a hearing officer. If the other side asks for much too little money, the friendly Arbitrator or hearing member won’t approve the settlement. This makes it much more important to do your homework and come up with a reasonable settlement value.


Therefore, unless an adjuster or risk manager tells a KCB&A lawyer to do so, we don’t ask for demands. We also don’t want to wait endlessly to the response requesting a settlement demands. In our view as veteran defense lawyers, asking the other side to make a settlement demand is lazy and counterproductive.


Please understand if you are selling an old car, antique gun or widget and you ask the buyer what they will pay, they won’t offer much. That is human nature—they are assuming you might be stupid and will hold the cards close to the chest.


On the other side of negotiations, if you are buying an old car and you ask the seller what they want for it, they will almost always ask for too much. In doing so, they are setting the “bracket” high to move the negotiations in their favor.


In any negotiation of any kind, the party that makes the first offer or demand sets the bracket and has a large advantage. The person that responds to the offer or demand is always at a disadvantage. Don’t let the other side have the advantage—as adjusters, claims handlers and for us as your defense lawyers; do your homework, figure out a reasonable value and where appropriate, make the first offer.


If you really want to move the matter along, do your homework and have your defense lawyer draft the settlement paperwork and send it to you and the other side. That way, all the other side has to do with a fair and reasonable offer is to have their client sign it. If they want a little more money to close quickly, your admin team should be able to rapidly modify the settlement contracts and then resend.


From the perspective of IL workers’ comp claims handling, IL WC Arbitrators love to hear you have made a reasonable and fair offer to the other side. In our view, it is one of the strongest tools to move claims forward and avoid delays.


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