5-19-14; New Fall-Down Rule for Gov't Workers?; Respondent Loses its 'Compass,' the Right to Depose Their Expert and the WC Claim; WCLA CLE Update to Include Amish WC Insurance Req'ment and much more

Synopsis: What Continues to Kill Illinois—Out-of-Control Gov’t Fringe Benefits, Including Workers’ Comp, for Many Public Sector Workers.

Editor’s comment: We write this article with all the appropriate respect for our Appellate Court, Workers’ Compensation Division’s five members. Having outlined our respect for the Court, from a purely academic perspective, we can’t disagree more with this ruling. In Brais v. The Illinois Workers' Compensation Commission, 2014 IL App (3d) 120820WC, issued May 8, 2014, the Court considered a record which indicated the worker was a government employee of Kankakee County. Claimant Brais worked as a child support coordinator in the Kankakee County Courthouse.

The Arbitrator and IWCC on review found the worker sustained a left wrist fracture when her heel caught in a groove in a public sidewalk and she fell, suffering injury. She filed a claim for workers compensation benefits for an injury to her wrist. Please note your editor and all the defense attorneys at Keefe, Campbell, Biery & Associates have gone to this wonderful old courthouse on a monthly basis for many decades. We are aware the sheriff and other security personnel have limited access for security purposes—you can only enter the building through a single door to insure everyone goes through a metal detector or other search. This Circuit Court venue dates back to November 1908 when county voters approved the construction of what was then a new courthouse. Zachary Taylor Davis was awarded the commission for the building. It was built by Lafayette, Indiana contractor W. F. Stilwell for $187,000. Construction began on October 2, 1909 and finished in July 1912, about three months after the sinking of the Titanic. The courthouse has remained in continuous use since its 1912 opening. On March 7, 2007, the building was recognized by the National Park Service with a listing on the National Register of Historic Places.

In the Brais ruling, the record further indicated Claimant fell while walking from a work meeting at an administration building to her office. It appears she had to enter through the front door of the courthouse, which was only means of access for employees and the public alike. The record indicates Claimant took this route daily. We point out everyone who goes to this court building with any regularity, such as bailiffs, judges, IWCC Arbitrators, attorneys on both sides, paralegals, court reporters, visiting school children, criminal defendants, claimants, families, county officials, effectively thousands of people take the same path and crossed this same sidewalk most days of the year. If you didn’t read that list carefully, please note former Arbitrator James Giordano who was assigned to this claim had to walk that sidewalk every day they had hearings in the building. We are all going to assume former Arbitrator Giordano didn’t feel the sidewalk he used every day was the equivalent of a WWI war zone to cross when he denied the claim.

The appellate ruling found even though the general public regularly used this sidewalk and faced the identical hazard of the “groovy” sidewalk, the Court’s members found Claimant faced a “special hazard” which became part of her employment. The decision indicates her work requirement that she attend meetings at the administration building increased the risk of injury on this otherwise ordinary public sidewalk.

In response, we note former Arbitrator Giordano and IWCC panel didn’t specifically find there was a “defect” in the sidewalk—they simply denied the claim as a risk common to the public. The Appellate Court basically ignored the Arbitrator and Commission’s view of the record and substituted their own judgment to characterize the sidewalk as “defective.” In our view, they are basically injecting their view of the facts over that of the hearing officers below—the Illinois Supreme Court in two landmark rulings in Twice Over Clean and Sisbro ruled this panel isn’t supposed to substitute their own judgment for that of the Commission when it comes to the facts.

For law students and other academic observers, we grin to see the Court’s analysis of the last ruling of the IL Supreme Court on fall-down claims such as this in Caterpillar Tractor v. Industrial Commission. In that ruling, Claimant tripped on a street curb and fell down to suffer injury, similar to Ms. Brais in this claim. Benefits were denied because the curb was a risk common to the public. In order to distinguish this ruling from Caterpillar Tractor, this appellate majority found the sidewalk here was “defective” where they opined the curb in Caterpillar Tractor wasn’t “defective.” In our reasoned legal view, this is something of a logical stretch—we feel you can readily find the curb in Caterpillar Tractor to be “defective” if you were so inclined. Claimant in that claim tripped on the curb, didn’t he? Couldn’t that Claimant argue, like Claimant Brais in this current ruling whenever you fall, there must be a defect? Couldn’t the reviewing court find the curb in Caterpillar Tractor was too high or too low or too new or too old or not painted yellow or painted with slippery yellow paint or whatever you want to make it compensable?

In our view, Illinois government is choking on the number one thing we are being forced to spend the majority of tax dollars on—we don’t spend the majority of our tax money on children or schools or teachers or poor people or medical care. Our Illinois Attorney General Lisa Madigan just filed a brief in the state government pension litigation confirming most of Illinois taxpayers’ money is being spent on inconceivably expensive government fringe benefits—government pensions which provide billions in benefits for people who don’t work for government any more or ever again. Similar to pensions, we feel hundreds of millions are also being spent to pay workers’ compensation benefits for government workers at the municipal, county, township and state level. This ruling combines with the ruling in Metropolitan Water Reclamation District to award substantial benefits for local government workers who suffer fall-downs in contrast to the legal analysis being provided for workers in the private sector. Rulings like the Braisdecision don’t come with a cost-accounting of this expanded WC coverage for county taxpayers—we assure you lots of government workers take the same paths when walking and, it makes no sense to us for government workers to get WC benefits where the rest of us fall prey to denials based on the “risk common to the public” rule.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Illinois Appellate Court Ruling Adds Insult to Injury on Issues of Credits & a Request to Obtain Expert Medical Testimony. Analysis by Timothy J. O’Gorman, JD.

Editor’s comment: In Compass Group v. Illinois Workers’ Compensation Commission, 2014 Ill.App.3d 121283WC, Petitioner alleged an injury while lifting a case of pop when he felt an onset of pain and purports to have heard a hissing sound. Petitioner worked the rest of the day and was seen by his physician the next morning whereupon he was diagnosed with a sprain and immediately referred to a chiropractor. Petitioner continued to work until being seen by an orthopedic specialist who ordered an MRI and diagnosed him with stenosis. Petitioner continued to work for 2 days and woke up on the 3rd workday after his alleged injury. While preparing to leave for work, Petitioner fell down his stairs at home suffering lacerations on several places of his body. Petitioner returned to work that day however was driven to the hospital mid-way through the work day.

Petitioner underwent x-rays while in the hospital which revealed olecranon bursitis in his left and right elbows. After Petitioner’s condition deteriorated, it was revealed Petitioner suffered a blood infection and was transferred to the intensive care unit. Petitioner underwent several surgical spine procedures and was placed on a respirator for a short amount of time. He did make a recovery and was discharged from the hospital several months after admittance.

In preparation for trial, Petitioner was seen by an infection disease expert at the request of Respondent pursuant to Section 12 of the Illinois Workers’ Compensation Act. Respondent’s doctor, a well-known and respected doctor specializing in internal medicine, disagreed with Petitioner’s treating doctor, a general orthopedic surgeon, as to the cause of Petitioner’s blood infection. When it came time for trial, the Arbitrator found the deposition of Respondent’s doctor to be unnecessary and refused to require the Section 12 expert to be deposed, instead finding submission of his report at trial would not prejudice Respondent’s case. When the time came for the parties to proceed Respondent and Petitioner stipulated to payment of Petitioner’s medical bills stating:

The parties hereby agree and stipulate that the following medical expenses would be due and owing pursuant to [Section] 8(a) and the fee schedule provisions of [Section] 8.2 of the Act in the event the matter is found compensable. However, by so stipulating, Employer does not waive any objection it may have as to liability (or the reasonableness and necessity) of said expenses.

We note the some-times defense, some-times Petitioner/Plaintiff firm of Slavin & Slavin successfully handled this seven-figure win for Petitioner while the Ganan & Shapiro firm was wholly unsuccessful in defense of Respondent.

In its appeal, Respondent argued several issues should be overturned by the Appellate Court. It argued the Appellate Court should overturn the findings of the Commission on the issue of causation, highlighting the expertise of Respondent’s Section 12 expert in comparison to Petitioner’s orthopedic surgeon on an issue of internal medicine. Second, they argued the order of the Arbitrator allowing the parties to proceed without the deposition of Respondent’s expert prejudiced the parties and the matter should be remanded for rehearing to allow for the deposition of Respondent’s expert. Third, Respondent argued any bills paid by 8(j) group health benefits should be capped at the negotiated rate and considered fully satisfied and the bills should not be paid pursuant to the Illinois Medical Fee Schedule.

In the decision, we aren’t shocked to note the Appellate Court, WC Division overwhelmingly found for Petitioner on each issue. The Appellate Court correctly summed up the positions of the parties stating “[t]he crux of the issue involves the divergent opinions of Claimant’s treating physician, [name omitted], and Respondent’s Section 12 examiner.” The Appellate Court refused to adopt the findings of Respondent’s Section 12 expert on the basis “we cannot say [Respondent’s expert] heightened expertise is so compelling that it renders a conclusion opposite to the Commission’s clearly apparent.” We must note the opinions of the experts being considered in this situation is not one of two members of the same field where one expert is seemingly more experienced. The two experts in this instance practice in two entirely different fields of medicine with Respondent’s examiner being an expert in internal medicine on an issue of a blood infection. We respectfully point out the expertise in question is not simply an issue of being “heightened;” it appears the question to us is whether Petitioner’s expert has any expertise on the issue at hand at all.

After affirming the decision of the Commission on the issue of causation on the basis of the experts’ respective medical testimony, the Appellate Court refused to allow for a rehearing to allow for the deposition of Respondent’s expert witness. The Appellate Court found the Arbitrator’s refusal to allow the deposition was not an abuse of discretion that would prejudice Respondent’s case.

We must note the arguments put forth by Respondent, as cited in the decision, state specifically the Arbitrator’s decision “scarcely addressed its concern that [Respondent’s expert’s] professional background in internal medicine and infectious disease be recognized and ignored the importance of a more detailed explanation by [Respondent’s expert] of the foundation and supporting evidence for his causal opinion.” The Appellate Court answers “Respondent never states what additional information would have been provided in a deposition. It never identifies any opinions in need of clarification, much less how they would have been clarified. It does not explain why [Respondent’s expert’s]curriculum vitae is insufficient to establish his credentials.”

Finally, the Appellate Court examined the stipulations of the parties in regard to the payment of medical bills. Respondent contended any bills paid under 8(j) group health benefits should be considered fully satisfied at the rate paid by the group health carrier. Often times, group health carriers will negotiate a rate lower than the rate provided in the Illinois Medical Fee Schedule which could lead to a savings if the stipulations are made correctly. According to the decision provided by the Appellate Court, Respondent seemed to only stipulate that bills would be paid pursuant to Section 8(a) and Section 8.2. As such, the Appellate Court found all bills awarded in the decision of the Arbitrator pursuant to the fee schedule cannot be changed to include rates previously negotiated by Respondent’s group health carrier. The Appellate Court explained “having expressly agreed that these amounts were proper, Respondent will not now be heard to complain of them.”

To avoid such a finding by any level of administrative review, we recommend including five simple words when stipulating to the payment of medical bills at trial. If there is any issue of payments made by a group health carrier in a workers’ compensation matter, Respondents should routinely ensure the stipulation on the record includes “or any previously negotiated rate” in its statement of liability for medical bills. Including this statement effectively eliminates the need for further litigation around the liability of group 8(j) benefits and is adequately specific to ensure no credits are lost at trial.

This article was researched and written by Timothy J. O’Gorman, JD. Please direct questions to Tim at togorman@keefe-law.com. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Our Report on the Recent WCLA Presentation Including the Amish WC Insurance Requirement. Thoughts and Analysis by Matthew G. Gorski, JD.

Editor’s comment: On May 14, 2014, recent IL WC Commission decisions, specifically issues from AWW to vocational rehab to WC insurance, were presented by WCLA in a continuing legal education format. These presentations are excellent and open to the public. We encourage our readers and attorneys on both sides to attend, participate and learn nuances and case precedents from some of the top lawyers in our state. Some highlighted cases are examined below.

(1)  Julie Meierdirks v. Northbrook School District #28, 07 WC 39919, 12 IWCC 647

This case involved a high school teacher who fell on newly installed carpet in her classroom injuring her left hip and head.  She was walking in normal fashion and the carpet was without apparent “defect.” The Arbitrator ultimately decided the accident did not arise out and in the course of Petitioner’s employment because Petitioner fell while walking in normal fashion.  In addition, the risk factor was neutral because it was not greater than that faced by the general public.

It is good to see IL employers may not be liable for employees who cannot adequately walk on normal walking surfaces in the realm of workers’ compensation. An interesting side note to this case was the Arbitrator ended up breaking down the AWW in a 40 week cycle instead of a 52 week cycle because some teachers decide to receive their checks in a 40 week cycle and some in a 52 week cycle.

(2)  Joshua Aubuchon v. M&M Tires, 11 WC 29530, 13 IWCC 972

Petitioner in this case received roughly $50.00 to $100.00 per week in tips.  The Arbitrator in this case allowed the tips to be included in his AWW, but the Commission found Petitioner failed to prove that his tips should be included. Ultimately, this decision was made on the basis there was no documentation of the amount of money he received in tips per week because these tips were received in cash from customers. 

Moral of the story from this case is if there is no documentation then the Commission views the tip money does not exist.  It is the Petitioner’s burden to prove income to be included in the AWW and without documentation that burden is not met.

(3)  IWCC Insurance Compliance v. Moses Miller (M&M Builders), 12 INC 537, 13 IWCC 986

Moses Miller owned M&M Builders, which was in the roofing business industry.  Mr. Miller’s position in this case was he did not have to obtain workers’ compensation insurance for his business because his religion (Amish) forbids it.  As you might predict this argument did not fly with the IL WC Commission which still wants Amish roofers to follow the law and insure for the risk of serious injury or death for their workers.

Mr. Miller cited Thomas Jefferson and the U.S. Constitution. The IL WC Commission denied his arguments on the basis the state may justify a limitation on religious liberty by showing that it is essential to accomplish an overriding governmental interest.  Therefore, if the government can find you need to protect your workers when they are injured, they can force you to insure for such risks. With respect to our Amish colleagues, we agree with the IWCC on this one.

This article was researched and written by Matthew G. Gorski, JD. Matt can be reached 24/7/365 for questions about IL WC at mgorski@keefe-law.com.

5-12-2014; Make WC Settlements With MSA's Crystal-Clear; Recent Federal Ruling Reaffirms Need for a Drug and Alcohol-Free Workplace; Retraction/Thoughts about Last Week's Article and much more

Synopsis: All Sides in a WC Settlement Need to Make MSA Settlement Language Crystal-Clear or It May Be “Unsettling.”

Editor’s comment: We consider this article required reading for all claims adjusters, risk managers, defense lawyers, WC hearing officers across the country. In Paluch v. United Parcel Service, Inc., the IL Appellate Court reversed and remanded a claim finding the workers' compensation settlement agreement was ambiguous as to total amount employer owed to employee. The unanimous Appellate Court remanded the case for an evidentiary hearing as to what the settlement might actually be. It appears the six-figure settlementagreement was unclear, ambiguous, contained conflicting clauses and was open to more than one interpretation.

Following contract approval, the employer and its carrier interpreted the agreement as requiring a single lump-sum payment of $400,000 for both the WC settlement and Medicare Set-Aside amount. In contrast, the employee and his attorney interpreted the agreement as requiring a lump-sum payment of $400,000, in addition to separate payment of a Medicare Set-Aside, in annuity form. The amount in dispute is an additional $181,580.96. Ouch.

The agreement states:

Respondent agrees to pay and Petitioner agrees to accept $400,000.00 in a lump sum plus payment of a Medicare Set-Aside (MSA), in annuity form, in full and final settlement of all claims for benefits past, present and future based on injuries arising out of an accident on or about July 11, 2006. This settlement represents as a compromise of wage differential benefits in the amount of $218,419.04 under Section 8(d)(1) of the Workers' Compensation Act, plus funding of an MSA in the amount of $148,790.00, direct reimbursement of BCBS lien in the amount of $31,135.82 and direct reimbursement of AETNA lien in the amount of $1,655.14. Respondent will pay all necessary and related medical expenses pursuant to the fee schedule or negotiated rate, whichever is less, that have been submitted to Respondent prior to contract approval and that contain all the required data elements necessary to adjudicate the bills pursuant to Section 8.2(d). Petitioner is responsible for payment of any and all medical expenses not submitted prior to contract approval. Petitioner hereby foregoes any right to review or reopen the settlement and agrees that all rights under Section 8(a) and 19(h) are expressly waived unless otherwise retained under the terms of this contract. The parties have taken Medicare’s interests into consideration and included with this settlement is a proposed MSA with initial funding of $106,650.00 and an annuity providing $3,329.87 per year continuing for life for a total proposed MSA of $148,790.00. The MSA shall be submitted to CMS for approval. Should CMS determine the MSA to be insufficient, the Respondent reserves the right to appeal the decision, and Respondent agrees to either modify the MSA consistent with CMS recommendations or elect to allow Petitioner to retain his medical rights under Section 8(a). If the MSA is approved, then petitioner’s rights under section 8(a) will cease upon funding of the MSA and the matter will be finalized with no futher [sic] activity necessary at the Commission.

The next paragraph states:

·         Total Amount of Settlement

$400,000.00

·         Deduction: Attorney's Fees

$43,600.00 reduced from $80,000.00

·         Deduction: Medical reports, X-rays

$2,611.84

·         Deduction: Other (explain)

$[blank]

·         Amount employee will receive

$353,788.16

There were arguments going in both directions outlined in the Appellate Court’s well-reasoned ruling. We note it is unusual but not impossible for a Plaintiff-Petitioner attorney to take a legal fee on the Medicare Set-Aside value—stating the attorney fee was reduced from $80K should indicate the employee was intended to receive $400K as a compromise of permanency. We also note there was Social Security spread language calculated on the amount the “employee will receive”—we agree with the trial court, it would be inconsistent to consider the MSA value as part of the spread language. We have no idea what the eventual facts will bear out or what the outcome will be. We are certain the defense side is expending legal fees they didn’t plan on expending and Petitioner/Plaintiff counsel is spending legal time they aren’t going to get any more money for. While we don’t know for sure, we can’t imagine Petitioner Paluch is happy about any of it.

Our message to our readers and clients who are handling such claims is patent—we have several MSCC certified attorneys at Keefe, Campbell, Biery & Associates, including our name-partner Shawn R. Biery. As you can see from this ruling, it is crucially important to have settlement language be crystal clear or you won’t have a settlement and may continue to waste time and money to litigate such “unsettling” claims moving forward. Before you go ahead with a workers’ comp claim settlement involving an MSA consider having us take a rapid look at it to insure you are doing precisely what you intend to do.

We appreciate your thoughts and comments. Please post them on our award-winning blog. For MSA issues, you can reach our experts Shawn R. Biery at sbiery@keefe-law.com and Matt Ignoffo at mignoffo@keefe-law.com.

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Synopsis: Recent Federal Ruling Points the Way Toward Testing for Alcohol, Opioid and Medical Marijuana Issues in Your Workplace.

Editor’s comment: U.S. employers can demand drug and alcohol testing and win dismissal of retaliatory discharge claims when your drug and alcohol-free policy is applied in a non-discriminatory fashion. In Phillips v. Continental Tire The Americas, LLC, the United States Court of Appeals for the Seventh Circuit reviewed the following facts. Plaintiff Phillips sued Continental Tire alleging the employer retaliated against him for seeking workers’ compensation benefits. The employer has a tire manufacturing facility in Mt. Vernon, Illinois where Petitioner worked for 22 years. The employer also had a local medical facility to provide medical services to sick or injured workers.

Continental Tire had a comprehensive written drug and alcohol-free policy that covered:

•      Drug testing for pre-employment testing,

•      Random drug testing for the first 12 months of employment,

•      For-cause drug and alcohol testing,

•      OSHA recordable accidents,

•      Transportable injuries,

•      Serious equipment/property damage incidents; and

•      Mandatory testing whenever a workers’ compensation claim was reported.

The employer’s policy provided refusal to submit to drug and alcohol testing was cause for immediate suspension pending termination. According to their policy, an injured employee could receive needed medical treatment in the medical services facility and return to work without taking a drug test if the employee did not seek to initiate a workers’ compensation claim and if the situation causing the need for medical care did not fall within one of the other categories listed above.

In Phillips v. Continental Tire, Plaintiff presented to the company’s medical services facility complaining his fingers were going numb at work and outlined his intention to make a workers’ compensation claim for that problem. Consistent with company policy, Petitioner was advised he had to submit to a drug test before he could initiate a workers’ compensation claim. Petitioner was also advised if he failed to submit to a test, his employment would be terminated. Petitioner refused and was terminated. Petitioner filed a workers’ compensation claim which appears to have been later settled for 20% of the left arm, based on our research. We consider it odd to see such a settlement that didn’t incorporate closure of the expensive Federal litigation, as we would have recommended.

The Federal Appellate Court acknowledged Illinois substantive law recognizes a cause of action for retaliatory discharge where an employee is terminated because of actual or anticipated exercise of workers’ compensation rights. In order to establish a retaliatory discharge claim, Plaintiff in such a case must prove they exercised a right pursuant to the Workers’ Compensation Act and was discharged for reasons related to the filing/prosecution of the workers’ compensation claim. The Federal Appeals Court found Plaintiff failed to show his discharge was causally related to the exercise of a protected right as causation requires more than a coincidental discharge in connection with filing a workers’ compensation claim.

In this record, it appears the parties stipulated the employer terminated Plaintiff solely because he refused to take a drug test upon initiation of a workers’ compensation claim. It was also established the employer consistently applied its drug and alcohol testing policy. They were able to demonstrate they had discharged other employees who refused to submit to drug testing. The Court also noted other employees had initiated workers’ compensation claims in the past, had participated in testing and had not been similarly discharged. The decision also confirms Plaintiff admitted if he had taken the drug test and passed, he would not have been terminated.

The Federal Appellate Court also noted the recent enactment in year 2011 of Section 11 of the Illinois Workers’ Compensation Act which created a rebuttable presumption the employee was intoxicated and intoxication was the proximate cause of the employee’s injury if the employee refused to submit to drug or alcohol testing. The Court’s august members noted this recent legislation further demonstrated an IL employer was not out of step with public policy by requiring drug testing under certain circumstances.

The Federal Appellate Court was also confirmed drug and alcohol testing in employment was not against Illinois public policy. The Court confirmed this position by referencing the Compassionate Use of Medical Cannabis Pilot Program Act which provides nothing shall prohibit an employer from enforcing a policy concerning drug testing provided the policy is applied in a nondiscriminatory manner.

This important federal decision affirms U.S. employers’ rights to drug and alcohol testing and confirms such on-the-job testing is not against public policy. Based on this decision and recent legislation, employers in Illinois should implement drug and alcohol testing assuming it is applied across-the-board and in a nondiscriminatory manner. Our concern about medical marijuana and the use of any opioid or alcohol in the workplace is simple—don’t wait for the first “Denver Brownie” user to cross your threshold before starting a drug and alcohol-free workplace program. If you wait, there is a much higher chance that person might sue you. Keefe, Campbell, Biery & Associates has a draft drug and alcohol-free program you can start with—we have great lawyers who can help you finalize it. All you need to do is send a reply and ask and we will send it right back!

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: We Retract One Sentence from Last Week’s KCB&A Update and Give Our Readers Some Additional Thoughts.

Editor’s comment: Last week, we reviewed an IL WC Arbitrator’s ruling in Perkins v. Turner Industries Group #09 WC  44791. We included this sentence: “If he isn’t finding work, it is because he is being coached on how to avoid work.” We have to retract and apologize for that comment, as we have no true idea if Petitioner was coached on how to avoid work. Please accept this as our apology and retraction of the statement.

As to the rest of this ruling we provide these opinions based on the facts we reviewed in the decision:

•      Petitioner is a union carpenter who had shoulder surgery;

•      He was released some time ago with a 50lb. or 53lb. lifting restriction;

•      In our view, there is ample work in the larger labor market around his home for a person with that background and training—as we indicated last week, “there is work at hardware stores, retail, coffee shops, gas stations, car lots etc. and we find there to be something wrong with a system that can find such an individual truly unemployable.”

•      The Americans with Disabilities Act requires almost any U.S. employer to reasonably accommodate such a worker in returning them to the workforce;

•      Petitioner was provided job placement assistance from April 2011 to January 2013—in our view, no claims adjuster should allow voc rehab to continue that long. To do so actually is contrary to your needs/interests and tends to prove unemployability. We are happy to consult with risk managers and adjusters on optimal use of voc rehab providers;

•      The Arbitrator assigned to the matter is one of the top veteran Arbitrators in Illinois and, in our view, is honest, fair and beyond reproach—that said, we respectfully disagree with his finding this man suffered life-changing injuries, is unemployable and is entitled to lifetime benefits as if he were;

•      The term “odd lot” total and permanent disability was created by the Illinois Courts and is legally indefinable because the term “odd lot” doesn’t appear in our IL WC Act. The “odd lot” can be whatever you want it to be—in short, if this man were required by the Arbitrator to return to work, it is our reasoned legal view he would do so and Respondent wouldn’t have to pay an otherwise healthy man several million dollars if this ruling isn’t reversed;

•      One nagging issue about the lack of new construction in Illinois is many construction workers with less-than-life-changing injuries are uniformly seeking very expensive wage loss differential and total-and-permanent disability awards. We have one construction client where literally every claimant is making such a claim.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

4-28-2014; SB 3287 Redux--What is a Safety Consultant Under the New Proposed Law?; The Wolf of Wall Street Rocks RIMS; Tough Subro Test Question and much more

Synopsis: What is a Safety Consultant Under the New Proposed Law? Will the Entire Claims Industry be on the Hook if SB 3287 Becomes IL Law??

Editor’s comment: Following up on our lead article of last week, we received a large number of inquiries about this new law that has already been passed by the IL Senate and is now pending in the House. We understand it has been referred to committee.

By way of history, on February 14, 2014, Illinois Senator Kwame Raoul introduced Senate Bill 3287, which is proposed legislation amending Section 5 of the IL WC Act and seeks to remove an existing exception in the Workers' Compensation Act providing statutory immunity to outside “safety consultants and service providers” for personal injury claims allegedly stemming or resulting from negligent services provided by those service providers. A link to the full text of the bill is here

http://www.ilga.gov/legislation/fulltext.asp?DocName=&SessionId=85&GA=98&DocTypeId=SB&DocNum=3287&GAID=12&LegID=80445&SpecSess=&Session 

Under current law, if an employee is injured at work and files suit to pursue recovery for his/her injuries from their employer’s outside safety consultant, the outside safety consultant is immune from liability for that claim. Under the proposed legislation, the outside safety consultant would not be immune from liability for that claim, and could be held liable to the injured employee/plaintiff for any judgment rendered against it. The unquestioned impact of the legislation, assuming it passes, will be significantly increased insurance costs for outside safety consultants, and increased safety service and insurance costs for their clients.

As we advised last week, the legislation is being pursued by the Illinois Trial Lawyers Association (i.e. plaintiffs/personal injury lawyers), one of the best funded lobbying forces in Illinois. As outlined above, they are pursuing the legislation because it will allow them the opportunity to pursue civil litigation against an employer’s outside safety consultant for virtually any injury sustained by that employer’s employees.

Please note the important changes to the IL WC Act are underlined:

Sec. 5.  (a) No common law or statutory right to recover damages from the employer, his insurer, his broker, any service organization that is wholly owned by the employer, his insurer or his broker and that provides safety service, advice or recommendations for the employer or the agents or employees of any of them for injury or death sustained by any employee while engaged in the line of his duty as such employee, other than the compensation herein provided, is available to any employee who is covered by the provisions of this Act, to any one wholly partially dependent upon him, the legal representatives of his estate, or any one otherwise entitled to recover damages for such injury.

We are forecasting two major issues for the Illinois claims industry to contemplate in relation to this new bill. First, we assure all of our readers if this bill becomes law and there is a major loss/injury involving death, paralysis or amputation in your workplace, you are certain to see circuit court litigation initiated to allow discovery. The discovery requests are going to routine and will ask risk and safety managers for the names and contact information of anyone who might have provided any safety service, advice or recommendations for your company in the last five years. You are going to have to answer them under oath or be subject to the contempt powers of the Circuit Court judge.

The second major issue to contemplate is trying to define what “safety service, advice or recommendations” might be and who provides it? In our view, such “safety service, advice or recommendations” can be provided to your company by:

·         Your insurance broker;

·         Your insurance carrier/TPA;

·         Your outside safety consultants;

·         Safety trainers;

·         The folks who design, maintain or update machinery or processes used in your business;

·         Treating doctors;

·         Physical and occupational therapists;

·         Nurse case managers;

·         FCE evaluators;

·         IME doctors;

·         CRC’s or certified vocational counselors;

·         Defense attorneys; and

·         Arbitrators/Commissioners at the IWCC.

All of these system participants can arguably be viewed as providing “safety service, advice or recommendations” to IL employers. Isn’t that what we all do? We are all monitoring injured workers/claims and making recommendations on how to smoothly and safely bring them back to work—what if they suffer a breakdown and our “safety advice” on return to work is arguably flawed? Solid human resources, safety, claims and risk managers ask all of us questions and learn from work injuries and modify their processes in light of all the advice they receive—now all of that advice may cause liability for these many component providers.

Have We Revived the Old Scaffold Act in a Much Expanded Form?

In our reasoned legal view, this new bill is going to be a new and improved Scaffold Act. If you don’t remember, the old Illinois Scaffold Act basically made any injury on a construction site a valid common law claim. What ITLA members would do is to sue every business on the site and the various companies would either settle for short money or complete discovery and then file motions for summary judgment to get out of the claim. All of that effort was wasted money and anti-competitive.

What may be coming to an IL Circuit Court near you is a similar situation where anyone who can arguably be responsible for “safety advice” is going to be sued and will then have to either get out for short money or slog through discovery to file a motion for summary disposition.

Illinois also now has a Last Person Standing rule where if everyone else settles and you are stuck as the last Defendant, you can be liable for the entire jury verdict. Again, this ITLA-sponsored concept is going to make this new law a major challenge for our industry to deal with.

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Synopsis: Hello From RIMS in Denver—the Highlight of the Party is Jordan Belfort, the Actual Wolf of Wall Street!

Editor’s comment: For the very first time, the U.S. risk/claims community gathered in the Mile High City to experience RIMS 2014 Annual Conference & Exhibition. This industry-leading event features three days of world-class educational sessions, inspiring keynote speakers and an energetic and resourceful Exhibit Hall. The weather is cold and windy but the conference is rocking.

Of the keynote speakers, the one with the most buzz is Jordan Belfort, who was the author of his autobiography, The Wolf of Wall Street. The book outlines his incredible rise from dental school drop-out to head of a billion-dollar stockbroking firm. His personal and financial excesses became the stuff of legend. He crashed multi-million-pound yachts and helicopters and spent millions more on illegal drugs. Chased by the FBI for years, Belfort eluded the law until 1998 when his firm, Stratton Oakmont, was closed down. In 2003 he was jailed for 22 months for securities fraud.

In prison he got clean, wrote his best-selling memoir and now makes a living out of motivational  speeches as well as helping the FBI investigate financial crimes. The 51-year-old father of two claims to be “above reproach” although the US government is still pursuing him, saying the millions he has made from the book and movie rights should go to the thousands of investors he fleeced. Stratton Oakmont specialized in low-cost shares, around $5 to $10, that were generally overlooked by the established Wall Street firms and the financial authorities. What Belfort’s unwitting investors didn’t realize was that he was using their small sums to make millions for himself.

He developed what became known as a “pump and dump” system. He would persuade friends and relatives to act as “rat holes” for him — they would buy stock in their name but using his money, thereby restricting the supply and boosting the share price.

His employees, at one point numbering more than 1,000 — would then sell the shares at the top of the market. The overhyped shares would soon drop in value, leaving investors with huge losses but Stratton Oakmont and Belfort with huge gains. His presentation was clearly a hit.

Next year the RIMS 2015 Annual Conference & Exhibition will be on April 26-29 at the New Orleans Ernest N. Morial Convention Center in New Orleans, LA. The attorneys of KCB&A hope to see you there.

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Synopsis: Here is a tough subrogation test question for our readers to consider. $25 gift certificate for the first correct answer from a claims adjuster or risk manager. If any Arbitrator or Commissioner gets it right, we will donate $50 to their favorite charity with approval from IWCC management.

Editor’s comment: Claimant is a traveling salesperson who is on a lengthy business sales trip for the employer, USA Industries. There is no dispute about employment, jurisdiction, accident or coverage of the IL WC Act. The salesperson was married on the date of loss.

Her plane crashed on April 1, 2014 and she was killed. She was a max rate employee and the WC death benefit plus $8K burial is worth around $1.6M.

At-Fault Airlines settled the GL claim with the widower on April 3, 2014 the second day after the crash for $1M. A Circuit Court judge approved the $1M settlement for the estate and entered an order approving it a week ago today. The risk manager at USA Industries doesn’t want us to appeal approval of the Circuit Court settlement. The widower took the $1M check and cashed it.

The widower files a valid IL WC death benefit claim and wants us to participate in a death prove-up.

You are asked to write the agreed proposed decision. When will (or if) IL WC benefits be first due and payable to the widower? The correct answer will be a date.