8-15-2016; New Rules For IL WC Folks to Know; IL WC E-Filing Vendor Bids Are Out and E-Filing Will Be Comin'; Lilia Picazo Reviews Important Fee-Splitting Ruling and more
/Synopsis: Proposed New IL WC Commission Rules May Be Changing Lump Sum Settlement Contracts, Disciplining Attorneys and Other Hearings.
Editor’s comment: The Illinois Workers’ Compensation Commission has proposed several amendments to the Rules Governing Practice before it at 50 Ill. Adm. Code 9070, Settlement Contracts and Lump Sum Petitions. Under filing requirements, in addition to settlement contracts being filed in quadruplicate on the IWCC form, one copy must be provided for each additional case number listed on the contract, the proposed amendment states.
Another proposed amendment makes settlement contract forms available on the web at: http://www.iwcc.il.gov/forms.htm We would comment most IWCC forms have been available on the IWCC website for a number of years so we are unsure of the basis for this new amendment to the Rule.
Will the IL WC Commission Ever Close the Unneeded “Remote” Offices?
The continuous availability of the forms on the IWCC website has been one source of criticism of the “remote” or “satellite” offices the IWCC maintains at our cost—the main task of these remote offices was to print and make paper forms available to the public. The same forms are always available on the web and could be printed at a local library or other government office. The IL WC Commission continues to maintain “information offices” in Collinsville, Rockford, Peoria and Springfield. The Rockford and Peoria offices appear to be open on a part-time basis, as the IWCC website cautions readers to call to insure they will be open on any given day. The Collinsville office wasn’t staffed for a very long time, indicating it is not needed.
Under Governor Rauner, we feel all “remote” government offices be immediately and permanently closed to save IL business money. We do not think they would be missed by IL injured workers or business people. We feel if the IL WC Commission took a poll to ask our citizenry if they want this service, no one would respond.
Lump Sum Settlement Contracts Rules May Change
Attorneys and claims managers need to know IL WC lump sum settlement contracts on cases originating in Cook County may be assigned randomly to an Arbitrator in the appropriate venue by a computer program. When the venue is outside Cook County, the parties may present settlement contracts by appearing personally before an Arbitrator assigned to that venue.
Under Section 9070.40, Action by Commission under Contested Petitions for lump sum settlement approval, two amendments were proposed:
When a Settlement Contract has been rejected by a Commissioner and re-assigned to an Arbitrator for hearing, no settlement contract may be approved by any Arbitrator. Any additional settlement contract must be presented to the Commissioner who rejected the prior settlement contract for consideration and possible approval.
Parties may reserve the right to amend an approved settlement contract by stipulation and order of a Commissioner to conform with regulatory requirements including, but not limited to, those of Social Security and Medicare. In no event may those amendments abridge the substantive rights of the parties as listed in the previously approved settlement contract.
Proposed Change to Rules on IWCC Attorney Discipline—What/When Was There Ever IL WC Commission Attorney Discipline?
Under Section 9090.10, Disciplining of Attorneys: Procedure, items b and c would be removed from the Rules Governing Practice. As these provisions relate to appropriate notice of a disciplinary hearing conducted by the IWCC, we have no idea why they need to be removed. In 36 years of practice, your editor is not aware of a disciplinary hearing being conducted in relation to an attorney appearing before the IWCC.
Proposed New Rules on Self-Insurance and Work-Stop Orders
There also are proposed amendments relating to the solvency of self-insured employers and work-stop orders. The new Rule would require notice of work-stop hearings to list the specific statute violations and periods of non-compliance, and confirm failure to appear at a hearing would trigger findings employers have knowingly failed to comply with the statute and such failure constitutes an immediate serious danger to public health.
Public comments will be accepted by the IWCC until Sept. 12, 2016 and should be submitted to Ronald Rascia, general counsel, IWCC, 100 W. Randolph, Suite 8-200, Chicago, IL 60601, or by telephone at 312-814-4932, or by email at IWCC.Rules@illinois.gov.
All of the proposed amendments can be found here.
-------------------------------------------------------
Synopsis: E-Filing Continues to Approach and Come Online for the IL WC System. Is This Then End of IL WC Status Calls?
Editor’s comment: The Illinois Workers’ Compensation Commission later this month should unveil a vendor to institute their e-filing model that will culminate in an e-filing system. As odd as it sounds, the monies to pay for e-filing will come from the settlement of a lawsuit over business fees imposed by former Governor, now jail-bird Rod Blagojevich.
The e-filing project will encompass filing of
· New Applications for Adjustment of Claim;
· All motions;
· Status call management including calendaring and docket management;
· Decisions.
Is E-Filing the End of Humans Attending IL WC Status Calls?
One of our lawyers wondered if all status calls will be conducted partially or completely online. Please note the IL WC Commission, like those of many other states, has a monthly status call where each month all cases assigned to an Arbitrator are reviewed with clerks or lawyers present to report developments including settlements and the need for hearings. For a time, many cases are automatically continued unless an emergency arises. After 2-1/2 years that an IL WC claim has been pending, attendance by someone on behalf of the law office is required to confirm the reasons for delay.
If the status calls are conducted in an online or web setting, it might mean attorneys at “out-state” or what is inaccurately termed “downstate” status calls do not have to appear. As fast as that happens, we feel many insurance carriers and TPA’s may hold back assigning such claims to defense attorneys because they would be able to watch/track developments from the nearest computer.
Our best answer to this question is “we don’t know.” We are sure the Federal and IL County Circuit Courts have gone to e-filling protocols. Both judicial systems still have status calls where the judges seek status reports from the parties litigant to insure cases are moving forward and being handled appropriately. Email and web handling hasn’t replaced the specter of judges pressing lawyers to be prepared and ready to act on their claims. We feel that is going to continue at the IWCC but we will all have to wait and see.
The Weird Way E-Filing in IL WC Will Be Funded
The initial cost of e-filling won’t be made public until the IL WC Commission releases the winning bid for the e-filing vendor selected. The IWCC put out a 52-page RFP earlier this year and accepted sealed offers from vendors until May 11, 2016. The money to fund e-filing will come in part from a $44 million settlement the IL WC Commission agreed to with the Illinois Chamber of Commerce, which filed a lawsuit against business fees imposed by the Blago administration in 2003 to combat a $5 billion budget shortfall.
We sadly note U.S. District Court Judge James Zagel recently resentenced Blagojevich to the same 14 years in prison for his many remaining convictions. You may recall a federal appeals court last year threw out five of the 18 corruption counts, but Judge Zagel affirmed the former governor’s criminal actions were egregious enough to remain in a federal prison for about 8 more years until at least May 2024, when he may be 67 years old. This projected release date factors in a reduction of two years for good behavior.
The IL State Chamber Fought for Their Members Against the Fees and Got an Amazing Settlement They Are Putting to Good Use.
In response to the State Chamber’s lawsuit, the Cook County Circuit Court ruled in favor of the Chamber’s position. They ruled Blagojevich’s anti-business taxes violated the uniform taxation rules by creating classifications that singled out business groups to bear the cost of operating general government functions. After some additional fussing, the State agreed to settle for the $44M.
Part of the $44 million settlement was set aside to repay loans used to provide cost-of-living increases to permanently injured workers and to pay claims owed to others. The bulk of the settlement $26 million then and now $30 million was earmarked for IL WC Commission capital improvements, to include a new electronic filing system, and to increase staffing in the agency’s anti-fraud unit. None of the settlement money was intended to cover normal Commission operating expenses that are paid under a separate levy on IL business..
The IL State Chamber said its members have saved $19 million a year since the anti-business fees were rolled back. The 1.5% surcharge imposed on employers’ insurance premiums generated two-and-a-half times the amount needed to operate the IL WC Commission.
Rules the IL WC Commission proposed to implement electronic filing were published in the July 29, 2016 edition of the state register, and are available here. Public comments will be accepted until Sept. 12 and should be submitted to Ron Rascia, general counsel, Illinois Workers’ Compensation Commission, 100 W. Randolph, Suite 8-200, Chicago, Ill., 60601. Stakeholders can call 312-814-4932 or email IWCC.Rules@illinois.gov.
The Commission's request for proposals is online here. The digital transformation project will be done in two phases. The first phase will determine the steps needed to craft system requirements and parameters, and developing an RFP for the second phase. The second phase will be the actual development and implementation of the solution identified in Phase 1. The successful bidder in the first phase is excluded from bidding on the second phase.
Will the New Electronic Filing Efficiencies Result in Actual Savings for IL Business and Local Gov’ts?
Again, 100% of the cost of everything at the IL WC Commission is paid for via levy after levy on IL business. Labor doesn’t pay a penny. Along with the levy that funds the IWCC, there are lots and lots of lesser-known “funds” at the IWCC that could be eliminated at a dramatic and immediate cost savings to IL business. We hope the new e-filing protocols will result in actual and demonstrable savings to include limited layoffs but we are going to have to wait and see.
We appreciate your thoughts and comments. Please post them on our award-winning blog.
-----------------------------------------------------------
Synopsis: IL Appellate Court Reinstates Plaintiff/Petitioner Law Firm's Claim Pursuant to Attorney Fee-Splitting Agreement. Research and analysis by Lilia Picazo, J.D.
Editor’s comment: The Illinois Appellate Court overturned a trial judge's finding an IL personal injury law firm's fee-splitting agreement with a workers' compensation attorney was not enforceable. In Ferris, Thompson & Zweig v. Esposito, No. 2-15-1148, 08/10/2016, published, the personal injury law firm of Ferris, Thompson, & Zweig ("FTZ") had a long-standing relationship with attorney Anthony Esposito under which the firm would refer potential workers' compensation clients to Esposito in exchange for a share of the attorney fees Esposito would receive if the client hired him to pursue a claim.
The relationship between the parties eventually soured when fee-splitting may have stopped. The firm sued Esposito for failing to pay their share of attorney fees pursuant to the terms of two written and executed fee-splitting agreements between them. In response, Attorney Esposito moved to dismiss the action, asserting sole jurisdiction of the workers' compensation fee dispute was within the jurisdiction of the IL Workers Compensation Commission, not a state trial court. We note there is no provision, rule or form for the IWCC to consider fee-splitting agreements. Such agreements would appear to exist separate and apart from the IL WC Act and Rules Governing Practice before the IWCC as they relate to the breach of an agreement.
The trial judge denied Esposito's motion, and the Appellate Court later affirmed this decision. The IL Supreme Court did so as well.
While this dispute was pending, Esposito balked at paying FTZ attorney fees pursuant to 10 other written agreements executed between 2007 and 2010. FTZ then filed a second complaint against Esposito, and Attorney Esposito again moved to dismiss this second lawsuit. Esposito argued the fee-splitting agreements were not enforceable because they did not expressly provide that he and FTZ would share financial responsibility for representing the clients.
This time a trial judge agreed with Esposito’s approach, and, in response to the motion, the judge dismissed FTZ's complaint. Ferris, Thompson & Zweig thereafter appealed.
For any attorney referral agreement to be held enforceable, the IL Appellate Court ruled, the attorneys involved in the agreement must strictly comply with Rule 1.5(e) of the Illinois Rules of Professional Conduct. The Rule provides division of an attorney fee among lawyers who are not in the same firm may be made if
· The primary service performed by one lawyer is the referral of the client to another lawyer;
· Each lawyer assumes joint financial responsibility for the representation;
· The client agrees to the arrangement, including the proportionate share each lawyer will receive;
· The agreement is confirmed in writing; and
· The total fee is reasonable.
In examining the history of Rule 1.5(e), the Court read referral agreements must be in writing, but there was no indication the referral agreement must expressly state the parties assume joint financial responsibility when representing clients. The Court also stated “joint financial responsibility” applied similar to attorneys engaged in a general partnership. Joint financial responsibility in such case would apply regardless of whether it was expressly included in a written referral fee-splitting agreement.
If the client agrees to the arrangement, including the share each lawyer will receive, the agreement is confirmed in writing and the total fee is reasonable, the Court said an agreement could be enforced.
The Court later read the rule as establishing two scenarios where attorneys could split fees, one of which required the attorneys expressly state they assume joint financial responsibility. See Donald W. Fohrman and Associates, Ltd. v. Marc D. Alberts,P.C. 2014 IL App. (1st) 123351 The Court held a fee-splitting agreement unenforceable as there was no substantial compliance with Rule 1.5(e) of the Rules of Professional Conduct. However, the Court in this case stated FTZ established prima facie case of reversible error, and the matter was reversed and remanded for further adjudication by the trial court.
In short, we want our readers to take away the significance of the Rules of Professional Conduct for fee-splitting agreements. Failure to adhere to the Rules will likely result in the loss of referral fees should the agreement be disputed. Therefore, PI and WC referring attorneys entering into such agreements should strictly adhere to the Rules in order for fee-splitting agreements to be held enforceable.
This article was researched and written by Lilia Picazo, J.D. She can be reached for questions at lpicazo@keefe-law.com. We appreciate your thoughts and comments. Please post them on our award-winning blog.
------------------------------------------------
Synopsis: HERE WE GO AGAIN--NEW IL WC RATE SHEETS ARE HERE AND ILLINOIS RATES INCREASE!!!
Editor’s comment: Illinois WC Rates Jump Again So Please Be Aware Of The New Rates or Your Claims Handling Will Suffer and Penalties May Ensue.
Email Shawn at sbiery@keefe-law.comand Marissa at mpatel@keefe-law.com to Get a Free and Complimentary Hard Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!
Maybe it’s a sign of a growing economy—even though rates continued to increase almost every cycle as we continue to watch the growth of IL WC rates. Starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing—WC rates continue to climb and climb some more.
We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now a whopping $755.22. This rate is only through June 30, 2016 and the new max PPD will be published in January 2017. When it will be published in January 2017, this rate will change retroactively from July 1, 2016 forward. If you don’t make the change, your reserves will be incorrect--if this isn’t clear, send a reply.
The current TTD weekly maximum has risen to $1,428.74. A worker has to make over $2,143.11 per week or $111,441.72 per year to hit the new IL WC maximum TTD rate. Does any state in the United States have a TTD maximum that sky-high?
The new IL WC minimum death benefit is 25 years of compensation or $535.79 per week x 52 weeks in a year x 25 years or $696,527.00! The new maximum IL WC death benefit is $1,428.74 times 52 weeks times 25 years or a lofty $1,857,362.00 plus burial benefits of $8K. IL WC death benefits also come with annual COLA increases that we feel potentially makes our state the highest in the U.S. for WC death claims.
The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. AGAIN—If you want just one or a dozen or more, simply reply to Shawn at sbiery@keefe-law.com and Marissa at mpatel@keefe-law.com They will get a copy routed to you before they raise the rates again! Please confirm your mailing address if you would like laminated copies sent to your home or office!