How to Keep Attorneys Out of Your Workers’ Comp Claims

The Yellow Pages for Los Angeles lists 30 law firms in its section on workers’ compensation attorneys. Even Alturas (population 2,827) boasts six workers’ compensation law firms. Someone is keeping all those firms busy—here’s how to ensure that your business isn’t among them.

The Workers Compensation Research Institute (WCRI) recently released a study on attorney involvement in comp claims. It found employees are more likely to hire an attorney to represent them in a workers’ compensation case in these circumstances:

1. The employee feels threatened.
2. The employee fears being fired.
3. The employee’s supervisor doesn’t believe the claim is valid.
4. The employee fears his/her claim will be denied. Reasons for this include receipt of a denial notice, a delay in payments or communications with the claims manager.
5. The employee has a serious (permanently disabling) injury.

Employers and claims managers can take steps to mitigate the first four situations. However, the WCRI study found that serious injuries had a "high correlation" with attorney involvement, and actions by employers or claims staff would likely have little effect on reducing attorney involvement in these cases.

Why Try to Minimize Attorney Involvement?

Attorney involvement in a workers’ compensation claim decreases your chances of early return to work, since an attorney has no interest in getting your employee back on the job. Attorney involvement will almost always increase the time it takes to settle a claim and may increase your costs, since you will need your own representation.

Employees don’t always win when hiring an attorney, either. Most workers’ compensation attorneys work on a contingency basis, taking a percentage of any payments or settlement your employee receives.
The following steps can help you reduce the likelihood of misunderstandings that could lead to attorney involvement:

1. Educate employees about workers’ compensation. Knowing how the system works can often allay the fears that lead employees to consult attorneys.
2. Communicate frequently with employees who are out due to work-related injury, rather than turning the claim completely over to your insurer or administrator. Keeping the worker connected to the workplace can lessen his/her fears of being lost in a bureaucracy.
3. Promote your organization’s early return-to-work philosophy. Employees who fear losing their jobs are more likely to hire an attorney; assuring your employees that they will be returned to work as quickly as possible could lessen their fears of termination and get them active again.
4. Train supervisors on the proper handling of a work injury.
5. Make sure employees know that workers’ compensation claims affect the company’s bottom line. As a component of total compensation costs, excessive comp claims could affect the amount the company can spend on other employee benefits.
6. Consider providing long-term disability benefits, which can provide a source of income to disabled employees whose claims might be in dispute. If the claim is found to be work-related, the workers’ compensation insurer will reimburse the disability insurer. (California requires employers to provide employees with short-term disability benefits.)

If, despite these steps, your employee lawyers up, you will want to hire a workers’ compensation defense attorney as soon as possible. Keep in mind that your insurer might sometimes want to settle a claim when it might not be in the best interest of your organization and its experience rating.

For more information, please contact the PCOC Insurance Program department of Jenkins Insurance Services at (877) 860-7378.

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