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
0
10
20
30
40
50
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
0%
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
0%
5%
10%
15%
20%
25%
30%
11 States Combined
% W
orke
rs H
ired
Atto
rney
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
0%
10%
20%
30%
40%
50%
All 7 States
% W
orke
rs H
ired
Atto
rney
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
0
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
0%
5%
10%
15%
20%
25%
30%
Lowest Lower Medium Higher Highest
% W
orke
rs H
ired
Atto
rney
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