Applicants’ attorneys drain lifeblood from state’s workers’ comp system, thwarting recent reforms

When one writes about the California applicants’ attorneys–those are the
lawyers who specialize in representing injured workers–one must write about
their ongoing attempts to take down California workers’ compensation
insurance system.

California’s workers’ comp system will not be truly reformed until it serves
injured workers without the need for these specialists. Some people call
them by their dignified name, “applicants attorneys.” I call them psychotic,
pompous, pseudo-philosophical, pedantic, ambulance-chasing asses–and I think
I’ve the more accurate description. But whatever the appellation, these are
attorneys who gain financially by promoting the financial interests of the
injured workers.

To be sure, there is a lot more wrong with the system than the problems
posed by applicants’ attorneys. To be fair, they occasionally are needed to
protect an injured worker from a claims adjuster’s mistake or an outright
bad decision.

But the system was designed by the Legislature to be no-fault, not an
adversarial system where every little issue needs to be adjudicated in front
of a judge. Other states have found ways to create fair systems that don’t
entail a constant stream of costly lawyers–on either side.

Gov. Schwarzenegger was elected, in part, because of the troubles in the
workers’ comp system. It was this governor who acted and used the threat of
an initiative to partially reform the system. So far, so good. Last year’s
legislative reforms were a good start: They sought to simplify the system,
set reasonable parameters and, in short, cut down on the number of those
“issues’ that lawyers love to fight over. That’s crucial: If you reduce
litigation, you reduce costs.

But lowering the costs of workers’ comp will not end until the system is
simplified further. Ambiguous rules must be eliminated. The laws must be
made clear enough to ensure that no attorney needs to be involved except in
extreme circumstances.

Let’s look at two important facts.

First, 84 percent of permanent disability claims involve attorneys. Prior to
the recent reforms, the factors surrounding disability had become so
confusing and ambiguous that few raters-those bureaucrats who determine the
percentage of disability-produced the same disability estimates, even though
they were looking at the same medical information.

The new reforms require that American Medical Association guidelines be
used to determine the extent of the worker’s injury. There is, or was, some
hope for simplification and less attorney involvement. But the transition to
the AMA ratings is slow, and it still involves lawyers.

Second, the applicants’ attorneys are challenging the state’s Permanent
Disability Rating Schedule and have strategies to take each case to court.
Increased litigation, here we come.

For example, the California Applicants’ Attorneys Association is sponsoring
a “rating seminar” to teach these applicant attorneys how to protect, or
even increase, their fees with “a strategy from the time of the client
interview through the trial of your case how to prove legally valid
permanent disability. Retention of experts and discovery will be explained
in detail.” By the way, those are direct quotes from the seminar brochure.

Even before the recent reform, 13 percent of the claims–that’s one in every
eight–brought by an attorney resulted in no award or a “take nothing” order
by a judge.

Now we are seeing challenges from the applicants’ attorneys to the
constitutionality of apportionment, to the permanent disability schedule
suggesting it is a violation of the statute, to the reforms’ retroactivity
clauses, to various challenges to medical provider networks. The list goes
on and on.

Legal costs associated with both the applicants’ attorneys’ fees and the
costs to employers of defending against them are a major contributor to the
costs of workers’ compensation.

Real reform of the system will require a commitment that is likely
unattainable by this Legislature, a group so interested in balancing the
needs of the various special interests that it cannot protect or serve the
people who elected it.

But we need an effective medical review board, prompt payments to doctors
and medical providers for services rendered, solid evaluations of
disabilities and, above all, a sharp limit judges and lawyers.

Gov. Schwarzenegger should be congratulated for the job he’s started, but
now it is time to finish the job.

What we need to do is simplify the system. That means creating a system that
is truly no-fault, and is so clear and user-friendly that there is no need
for attorneys.

It works in other states. Why not in California?