A new California Workers’ Compensation Institute study takes a comprehensive look at attorney involvement in California’s “no-fault” workers’ compensation system and finds that between 1993 and 2000, attorneys were involved in more than three out of four permanent disability claims, and these cases accounted for 93 percent of the litigation expense in the system. The study also quantified significant differences in the level of attorney involvement across a number of variables, including the type and nature of injury, level of permanent disability, employer size, industry group, and geographic location.
The study notes that disputes in PD claims don’t tend to focus on the cause of injury, but rather on the nature and extent of injury, a situation exacerbated by the subjectivity of California’s permanent disability rating schedule. Thus, the highest levels of attorney involvement were in cumulative injuries, multiple physical injuries, and back injuries, where disability raters often rely heavily on subjective work capacity guidelines to determine the worker’s level of impairment, drawing attorneys from both sides into the claim. Other factors come into play as well. For example, the study found an inverse relationship between employer size and attorney involvement rate, with the highest rates noted among small employers and the lowest rates found among larger employers. Significant regional differences were recorded as well. As in past studies, litigation was most prevalent in Southern California, especially among permanent disability claims, with attorneys involved in more than 80 percent of PD cases in Los Angeles and the Inland Empire compared to about 70 percent in the Bay Area.
Litigation costs were also higher in Southern California than in the north, with the highest costs recorded in Los Angeles County, though just a short drive down the coast, San Diego County had the lowest litigation costs in the state. One factor contributing to the regional cost variation is the concentration of various industries in each region, as there was as much as a 60 percent spread in average litigation costs among different various industries, with textile manufacturing having both the highest attorney involvement rate and the highest litigation costs. The study estimates total expenses related to attorney involvement represent more than 8 percent of all benenfits paid.
Copies of the report, “Attorney Involvement in California Workers’ Compensation, 1993-2000” are available for $10.00 plus shipping, and may be ordered online from the Store at www.cwci.org, or by calling the Institute at 510-251-9470. Institute members and web subscribers may also download a copy by clicking here.