PRO SE SETTLEMENTS: PREVENTING THE INJURED WORKER FROM SEEKING LEGAL REPRESENTATION. Daniel R. Egan

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1 PRO SE SETTLEMENTS: PREVENTING THE INJURED WORKER FROM SEEKING LEGAL REPRESENTATION Daniel R. Egan Rusin Maciorowski & Friedman 10 South Riverside Plaza, #1530 Chicago, IL (312) July,

2 Introduction In Illinois, unlike in many other states, the initiation, prosecution and resolution of a workers compensation claim is an adversarial process. A claim begins when the injured workers seeks legal representation and files a document at the Industrial Commission known as an Application for Adjustment of Claim. However, it is not always necessary for the injured worker to retain the services of an attorney; oftentimes a claim can and should be resolved amicably between the injured workers and the employer. This is commonly known as pro se settlement. This article will review the process of pro se settlement, analyze reasons why the injured workers seeks legal representation and provide suggestions for initiating and maintaining a proactive policy of reaching a pro se settlement with the injured worker resulting in an overall decrease in workers compensation costs to the employer and increased job satisfaction among employees. The Pro Se Settlement Process When the employer reaches a settlement agreement with the employee before the employee seeks legal representation, there is an established procedure for obtaining settlement contract approval in pro se cases. However, in order to obtain settlement contract approval, it is generally required that the claimant appear before the arbitrator. The arbitrator reviews the settlement contract and medical records and makes sure that the settlement is a fair one and that employee understands the rights he is waiving. In order to obtain settlement contract approval once a settlement agreement is made between an employer and the employee, the matter must be referred to defense counsel for the preparation and filing of a draft lump sum settlement agreement. The procedure for obtaining approval of the settlement agreement is different in Chicago and downstate cases. In Chicago cases, the attorney must file the draft contract with the Industrial Commission. In Chicago, a settlement hearing can occur the day the settlement contract is filed. With respect to downstate settlements, the attorney must again file the settlement contracts with the Industrial Commission. Based on the location of the accident, the attorney knows which arbitrator will consider the settlement contract. The attorney then arranges a pro se settlement hearing before the arbitrator at the next status call date. As a general rule, the downstate arbitrators will hear pro se settlements on any of their status calls or trial dates. On rare occasions, normally only when an employee resides out of state, the arbitrators will approve pro se settlements without requiring employee s appearance. At the pro se settlement hearing, the attorney must present not only the employee and the settlement contracts, but also must present the medical records detailing the injury and showing the extent of employee s medical condition. Frequently, some arbitrators are reluctant to approve settlement contracts because of concerns with the need for future medical care and concerns that the amount of the settlement is insufficient. However, if a settlement is rejected by an arbitrator, and employee is still willing to accept the settlement despite the rejection, the attorney may proceed to the Chairman s office and request assignment of the settlement contract 2

3 to a commissioner. The commissioner may then consider the settlement and approve or reject it. However, an attorney may not bypass the arbitration level and seek Commission approval first. Before the hearing before an arbitrator, the attorney should meet with the injured workers to explain the settlement contracts and the hearing procedure. Should the injured worker have any questions or concerns, they should be answered at that time. After the hearing, the attorney should provide a copy of the approved contract to the injured worker and explain how long it will be before the settlement draft is issued. Why The Injured Worker Seeks Legal Representation There are many reasons why an injured worker seeks legal representation. In union shops, the business agents and union stewards quickly refer the injured worker to the union s attorney. The injured worker, being the compliant union member, simply goes to the attorney as instructed. This might occur during a union meeting or at the union hall. Before he knows it, the injured worker has signed an attorney representation agreement and blank Application for Adjustment of Claim, giving birth to the litigation process. In both union and non-union shops, a worker might believe that it is necessary to see an attorney once an injury occurs, simply because that is what everyone else does. A particular attorney or law firm might have a presence among the employees. The injured worker simply goes to that attorney because his co-workers have encouraged him to do so, thus giving birth to the litigation process. Advertising. Changes in the Attorney Code of Ethics and the courts interpretation of same have allowed attorneys to advertise on television and radio. These ads urge the injured worker to seek legal representation because the employer has insurance companies and attorneys already working to protect their interests. Obviously, the ads generate business for petitioner attorneys or they would have stopped running. Increased competition among petitioner attorneys for business also causes more people to be represented. The attorney, in representing someone, hopes to build a source of business. Overriding all of these reasons is fear. The injured worker is afraid they will be ignored, their bills will not be paid, and they will not be paid for their time off. These fears are realized when the adjuster does not call promptly, they receive a second or third bill for medical treatment, or their TTD check is late. How To Prevent The Injured Worker From Seeking Legal Representation Communication. The company nurse, if there is one, or the workers compensation liaison, should communicate quickly and often with the injured worker. It is critical to stress the importance of bringing any unpaid bills to the employer s attention, so they can be processed. 3

4 Similarly, it is critical that the employer and injured worker communicate about the injured worker s ability to return to work. If a TTD check is slow in coming, the workers compensation liaison should contact the carrier to find out why. Any explanation should be relayed to the injured worker quickly. Dissatisfaction of the injured worker in payment of medical and TTD benefits may be the single most reason why the injured worker seeks legal representation. Create a light duty or transitional return to work program. Not only does this bring the injured worker back to the workplace, it makes communication with the injured worker easier. Identify the most frequent types of injuries at your business. Devise a plan for resolving these claims fairly. For instance, if carpal tunnel syndrome is common, devise a plan for resolving the cases fairly and communicate this plan to your employees early on in the process. Make it known to all employees you want the opportunity to resolve cases quickly, fairly and with the least amount of outside interference as possible. Coordinate this plan with your workers compensation insurance administrator and attorney. Make sure the plan is flexible, in addition to being fair, so that the less common injuries can also be resolved within these guidelines. The determination of PPD is not an easy matter in Illinois. The Illinois Industrial Commission does not rely on any written or published standards for disability determination. The only available reference materials are prior Illinois Industrial Commission decisions. These decisions are compiled in a publication known as Q-Dex. It is not an official reporter for Illinois Industrial Commission decisions, as no such reporter exists. The Q-Dex guide is a good reference to identify Commission decisions which have similar injuries and facts. Keep in mind that cases which are tried tend to involve more severe injuries and, therefore, somewhat higher PPD values. Another good more recent reference tool is a settlement guide. This guide shows the range of settlements by arbitrator and by injury. These tools can be cited to the injured worker in explaining how a settlement value is determined. When determining a fair pro se settlement, one should keep in mind that the pro se settlement should include a discount for the injured worker not having to pay an attorney and the time value of money. A fair pro se settlement offer should be roughly 75% to 80% of full settlement value. An amount much less than this may result in the arbitrator s rejection of the contract, absent extenuating circumstances. Should the injured worker reject a fair offer, it is a claim that should ultimately proceed to trial before an arbitrator. Once employees learn that you make fair offers and are willing to stand behind it, subsequent employees will be more likely to accept the settlement offer. Conclusion Communication between the injured worker and the employer is the single most important factor in preventing the injured worker from seeking legal representation: ensuring 4

5 that medical bills are paid, lost time issues are addressed and that the employer will fairly address the PPD issue all help to keep the injured worker satisfied and settlement without an attorney more likely. The employer, workers compensation insurance administrator and employer s workers compensation attorney should work together to coordinate a viable pro se settlement program which will deter the injured worker from seeking legal representation and thereby reducing the employer s overall workers compensation costs and maximizing the employees satisfaction with the entire process. 5