Avoiding Litigation

Avoiding Litigation

What Can Employers, What Can Employers, Payers, And States Do?Payers, And States Do?

Worker Attorney Involvement Varies Greatly From State To State

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10

20

30

40

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60

TX WI PA MI NC CT FL MA CA TN MD

% W

orke

rs H

ired

Atto

rney

Study ObjectivesIdentify/quantify important factors Identify/quantify important factors

explaining why workers hire attorneysexplaining why workers hire attorneysSuggest strategies to avoid Suggest strategies to avoid

unnecessary attorney involvement unnecessary attorney involvement and litigation costsand litigation costsStrategies for employers, claims Strategies for employers, claims

managersmanagersStrategies for state WC administratorsStrategies for state WC administrators

Major FindingsWorkers are more likely to seek attorneys when Workers are more likely to seek attorneys when

they feel threatenedthey feel threatenedSome threats may come from the character of Some threats may come from the character of

the employment relationshipthe employment relationship Employers may mitigate these threats and reduce Employers may mitigate these threats and reduce

litigationlitigationOther threats may come from the claims Other threats may come from the claims

processprocess Claims managers and state WC agencies may Claims managers and state WC agencies may

mitigate these threatsmitigate these threats

Conceptual Model: Many Factors Shape Workers’ Decisions To Hire AttorneysNature and severity of injuryWorker characteristics – attitudes

toward conflict, ease of finding attorney, need for help

Workplace characteristics State specific factors

State culture on cooperation/conflictDesign features of WC system

Research Approach And DataUse common statistical methods to

isolate the impact of each factor

Claims records and telephone interviews for 6,823 claimsClaims with > 1 week of lost timeAnalyze 11 larger states Interviews conducted 2.5-3.5 years post-

injury

3 Of 4 Most Important Factors Can Be Impacted By Employer/InsurerTrust in the work relationshipTrust in the work relationship

Worker feared being firedWorker feared being firedWorker said that supervisor did not Worker said that supervisor did not

think claim legitimatethink claim legitimateClaims processClaims process

Worker perceived claim was deniedWorker perceived claim was deniedInitial injury severity reported by Initial injury severity reported by

workerworker

Many Workers “Strongly Agreed” That They Feared Firing When Injured

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5%

10%

15%

20%

25%

30%

35%

PA MA MI MD NC WI CT FL CA TN TX

% S

tron

gly

Agr

ee T

hey

Fear

ed B

eing

Fi

red

Workers Are Twice As Likely To Hire Attorneys If They Fear Being Fired

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5%

10%

15%

20%

25%

30%

11 States Combined

% W

orke

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ired

Atto

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s

Disagree Strongly Agree

Workers Much More Likely To Hire Attorneys If They Fear Being Fired

0%10%20%30%40%50%60%70%80%90%

TX WI CA PA MI FL NC CT TN MA MD

% W

orke

rs H

ired

Atto

rney

s

Disagree Strongly Agree

3 Of 4 Most Important Factors Can Be Impacted By Employer/InsurerTrust in the work relationshipTrust in the work relationship

Worker feared being firedWorker feared being firedWorker said supervisor did not think Worker said supervisor did not think

claim legitimateclaim legitimateClaims processClaims process

Worker perceived claim was deniedWorker perceived claim was deniedInitial injury severity reported by Initial injury severity reported by

workerworker

Workers Believed Supervisors Distrust Legitimacy Of Claim – 12-20% Of Cases

0%

5%

10%

15%

20%

25%

PA FL MA NC MI WI TN CT CA MD TX

% "

Stro

ngly

Agr

ee"

That

Sup

ervi

sor

Was

Ske

ptic

al o

f Inj

ury

Workers Who Believed They Are Not Trusted More Often Retain Attorneys

0%

5%

10%

15%

20%

25%

All 11 States

% W

orke

rs H

ired

Atto

rney

s

Disagree Strongly Agree

Workers Who Believe They Are Not Trusted More Often Retain Attorneys

0%10%20%30%40%50%60%70%80%

MI TX WI PA NC FL CA CT MA TN MD

% W

orke

rs H

ired

Atto

rney

s

Disagree Strongly Agree

WC Agencies And Claims Managers Can Impact Perceived DenialsTrust in the work relationshipTrust in the work relationship

Worker feared being firedWorker feared being firedWorker said supervisor did not think Worker said supervisor did not think

claim legitimateclaim legitimateClaims processClaims process

Worker perceived claim was deniedWorker perceived claim was deniedInitial injury severity reported by Initial injury severity reported by

workerworker

Workers Perceived Denials In 5-11% Of Cases With Payments

0%

2%

4%

6%

8%

10%

12%

FL TN NC MI WI CA MD

% C

laim

s W

here

Wor

ker P

erce

ived

D

enia

l (la

ter a

ccep

ted)

If Claim Is Initially Denied, Worker Is 3 Times More Likely To Retain An Attorney

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10%

20%

30%

40%

50%

All 7 States

% W

orke

rs H

ired

Atto

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s

No PerceivedDenialPerceived Denial(later accepted)

Workers Much More Likely To Retain Attorneys If They Perceived Claim Was Denied

0%10%20%30%40%50%60%70%80%90%

WI CA MI FL TN NC MD

% W

orke

rs H

ired

Atto

rney

s

No Perceived Denial Perceived Denial (later accepted)

Attorney Involvement More Likely In More Serious InjuriesTrust in the work relationshipTrust in the work relationship

Worker feared being firedWorker feared being firedWorker reports supervisor not think claim Worker reports supervisor not think claim

legitimatelegitimateClaims processClaims process

Worker reports claim initially denied, Worker reports claim initially denied, subsequently paidsubsequently paid

Initial injury severity reported by Initial injury severity reported by workerworker

Average Injury Severity Reported By Workers Is Similar Across States

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5

10

15

20

25

30

35

CA CT FL MA MD MI NC PA TN TX WI

Seve

rity

Scor

e (h

ighe

r is

mor

e se

vere

)

Attorney Involvement Increases With Injury Severity

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5%

10%

15%

20%

25%

30%

Lowest Lower Medium Higher Highest

% W

orke

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ired

Atto

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s

Other Factors Worth Noting That Raise Likelihood Of Hiring An AttorneyHigh school graduates (compared to college High school graduates (compared to college

graduates)graduates)Workers who chose to be interviewed in Workers who chose to be interviewed in

SpanishSpanishWorkers with <1 year job tenure (compared Workers with <1 year job tenure (compared

to workers with more tenure)to workers with more tenure)Low back conditions (compared to fractures)Low back conditions (compared to fractures)Several measures that reflect severitySeveral measures that reflect severity

Surgery or notSurgery or notTreatment by 1 doctor or 2+ doctorsTreatment by 1 doctor or 2+ doctors

Possible Application: This Economic DownturnMore workers fear losing their jobs More workers fear losing their jobs

than in past recessionsthan in past recessionsIf claim made, more likely to hire If claim made, more likely to hire

attorneyattorneyEspecially in most severely affected Especially in most severely affected

states and industries states and industries E.g., FL construction, MI auto suppliers E.g., FL construction, MI auto suppliers

Possible Application: Employee Free Choice ActEmployee Free Choice Act may Employee Free Choice Act may

increase workers’ compensation costsincrease workers’ compensation costsIf passes, union organizing and If passes, union organizing and

employer resistance will increase employer resistance will increase Some affected workplaces will have Some affected workplaces will have

much lower trust environmentsmuch lower trust environmentsIf so, attorney involvement would If so, attorney involvement would

increaseincrease

Major FindingsWorkers are more likely to seek attorneys when Workers are more likely to seek attorneys when

they feel threatenedthey feel threatenedSome threats may come from the character of Some threats may come from the character of

the employment relationshipthe employment relationship Employers may mitigate these threats and reduce Employers may mitigate these threats and reduce

litigationlitigationOther threats may come from the claims Other threats may come from the claims

processprocess Claims managers and state WC agencies may Claims managers and state WC agencies may

mitigate these threatsmitigate these threats