An American-Indian proverb goes something like this: “Never criticize a man until you have walked a mile in his moccasins.” As a defense attorney, I may be better able to empathize with the challenges of being a plaintiff’s attorney if I can imagine myself in his or her “moccasins.” Likewise, a plaintiff’s attorney may benefit from a better understanding of the defense attorney’s challenges. This article will help explain the defense attorney’s “moccasins” when it comes to defending workers’ compensation cases.
The plaintiff’s side of cases
I recently had breakfast with a plaintiff’s attorney to discuss the resolution of a pending case. After we explained our positions in the case (which eventually resulted in a settlement), the plaintiff’s attorney explained to me some of the challenges he faces in representing plaintiffs. He talked about injured and out-of-work employees who rely solely on the workers’ compensation insurance carrier to pay weekly benefits and medical expenses, provide travel reimbursement and eventually pay a permanent partial impairment settlement in cases where liability is accepted. He then explained how those pressures are amplified when the employee presents a claim that is contested. He talked about the desperation such workers suffer when they have families to support and mortgages or rent to pay, and they need medical attention, but they have no means to pay for the necessities of life.
He then explained how he receives frequent and frantic phone calls from such clients who see him as the only source of reassurance and potential resolution. Often, his clients have never before presented a claim and have little understanding of the process that it takes to get a case to hearing or to resolution when it is being litigated. They do not understand that the Worker’s Compensation Board does not have a permanent office or courtroom in every county around the state and that there are only six hearing members to cover all areas. They do not know the hearing members travel circuits and are not in an office in every county each business day. The attorney also pointed out that almost all of his clients have only one case pending at a time, they are focused only on their case, and they assume their attorney should be available at all times to discuss their case.
The defense side of cases
The plaintiff’s attorney’s explanations helped me “walk a mile in his moccasins.” If he were to walk a mile in my moccasins as a defense attorney, he would experience the mounting pressure from clients and insurance carriers to keep legal costs down. With rare exception, the workers’ compensation cases are being handled by claims adjusters who work either for an insurance carrier or a third-party administrator. Plaintiffs’ attorneys have probably heard defense counsel express frustrations over the fact that our legal bills are frequently subject to review by independent auditors whose job is to review time entries and decide what part of the invoices will be written off. Also to keep costs down, the claims adjusters typically are responsible for handling a majority of the tasks in processing the claims. As in other positions in “corporate America,” claims adjusters seem to transfer to other carriers more frequently than before. Turnover of personnel may result in temporary delays in processing the claims as new adjusters get up to speed to take over handling the claims.
Those who do not handle defense cases may have no appreciation of the fact that the defense attorney has no independent authority to settle cases or make decisions with regard to the course a case will take. That authority comes from the claims adjuster. Often, the claims adjuster has a limited amount of independent settlement authority and must get authority from a claims supervisor or manager for authority above that given to the claims adjuster. At times, there are excess carriers that constitute yet another level of involvement in extending settlement authority. For self-insured employers, a human resources representative may have a similar limitation of authority and may need to obtain authority from his or her superiors within that company. Yet another layer of decision-making may be the Center for Medicare and Medicaid Services if the resolution of the case involves a Medicare Set-Aside.
To obtain settlement authority or authority to proceed in a recommended manner, these various layers may have to be consulted before a decision is made that is then provided to the defense attorney before he can advise the plaintiff’s attorney. The defense attorney’s role is to counsel the people to whom he reports (who may be a claims adjuster, claims supervisor, claims manager, excess carrier or the employer itself) and to provide guidance on the law, the predicted outcomes and exposure of certain actions.
Dealing with all these various layers may involve multiple phone calls, letters and email correspondence to the various reporting and decision-making personnel. There may be many eyes on the resolution or procedures involved in the case. These eyes all need time to review and provide authority to proceed. They also have procedures that are in place and must be followed to make case handling more uniform.
Additional defense challenges
A recent trend seems to be that the defense attorney is denied authority to resolve the case for as much as the insurer is willing to pay – even though the adjuster does have that authority. For example, the defense attorney may suggest a settlement value of $20,000; the adjuster or other decision-makers may agree that the estimate of the settlement value of the case is within a reasonable range, but they may be unwilling to allow the attorney to negotiate a settlement for that much. Previously, it seemed an adjuster would often give the defense attorney the settlement authority recommended (in this example, $20,000) and it was the attorney’s role to attempt to negotiate settlement for less than $20,000. But now, the adjuster seems to want to limit the extent of the defense attorney’s negotiating authority. Some adjusters or claims managers must think that the defense attorney will make only an initial offer of the maximum settlement amount, so they limit his authority. But tying the attorney’s hands leads to lengthier settlement negotiations.
When do I get my check?
When it comes to the procedures after the attorneys have agreed on a settlement, an understanding of the process will help alleviate the anxiety felt by both sides. Even after the attorneys have reached agreement on the amount of the settlement, it may take two months before the settlement check is in the plaintiff’s hands.
First, the defense attorney usually will draft a settlement agreement based on the terms reached during negotiations. Then, the settlement agreement is sent to the plaintiff’s counsel. The process of negotiating the actual and specific language of the agreement may take a week. To speed up the process, some defense attorneys — including this author — have recently begun to send the draft agreement to the plaintiff’s attorney by email, rather than by regular mail. (I have not had any plaintiffs’ attorneys complain about receiving agreements sooner.) After the terms are agreed upon, the plaintiff’s attorney must obtain the necessary signature and send it back to us for the final preparation of the agreement. Defense attorneys usually send the fully executed agreement to the Worker’s Compensation Board within a day of receiving it from the plaintiff’s attorney. The board will review the agreement and, if satisfactory, will approve the agreement and send it back to the parties within about a week. Defense attorneys then send the approved agreement to our client with instructions to mail the settlement check directly to the plaintiff’s counsel.
Previously, the insurance carrier would send the defense attorney the settlement check as soon as an oral agreement was reached, and we would retain it until we received the approved agreement from the board. At that point, we would send it to the plaintiff’s attorney. Now, the carrier holds the check until it receives the board-approved agreement. And then, it usually takes the insurance carrier two to three weeks to send the check. Carriers used to send the checks to the defense attorneys first, but we have now eliminated that step to expedite the process. Checks are sent directly to the plaintiff’s attorney. It should also be noted that mail delivery can be delayed at times. Absent unusual circumstances, the adjuster will not send the check by overnight delivery because of the additional cost associated with such delivery.
During the settlement process, the plaintiff must become very anxious for his or her money and may call his or her attorney frequently. Explaining to the plaintiff that it may take a couple of months after a settlement is reached to receive a settlement check may help to avoid some of those anxious telephone calls.
Even though it may not be practical for plaintiffs’ and defense attorneys to exchange places even for a day, our better understanding of each other’s roles and responsibilities in handling workers’ compensation cases may result in increased civility between counsel and more realistic expectations from injured workers. Attorneys may not have to walk in the other side’s “moccasins” to empathize with the challenges the opponent faces, but increasing the understanding of the other attorney’s role and responsibilities will benefit us all.•
Mr. Smith is a partner in the Indianapolis firm of Riley Bennett & Egloff LLP and is an officer on the Board of Directors of the Defense Trial Counsel of Indiana, serving as DTCI Secretary. The opinions expressed in this article are those of the author.