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Signal/LCA Maritime Forum, May 2003
Picking Your Fights: The View
from the Claimant's Perch
"I purpose (sic) to fight it out on this line if it takes
all summer." - Ulysses S. Grant.
This paper examines why in some cases the parties to a
Longshoreman & Harbor Workers' Compensation claim have
taken General Grant's above quotation to a new level: "We
propose to fight it out on this line if it takes forever."
The most important right that the employer enjoys under
the LHWCA is the right to "self-help" under Section 14 of
the Act. As we all know, the LHWCA requires that the
employer pay indemnity and medical benefits until such
time as it determines that the claimant is not entitled to
benefits. Thus, the employer determines, in most
instances, when to pick its fights.
A preliminary question that the employer should address is
whether it is wise to controvert in any specific instance.
In making this determination, it has been my experience
(looking in from the outside as claimant's counsel) that
the employer's primary focus is on the merits of the claim
and, to a lesser extent, the rapport (or lack thereof)
existing between the carrier's representative and the
claimant and/or his counsel. While these are
unquestionably important factors in the decision to
controvert, it is my experience that employers do not
consider the historical background behind the 1972
amendments to the LHWCA and the "track record" of cases
decided by OALJ before they undertake self-help.
As some of you may be aware, my office was counsel for the
claimant in an unsuccessful challenge to the
constitutionality of the termination procedures set forth
in 2 Section 14 of the LHWCA. During discovery, USDOL was
ordered to provide us with copies of all decisions issued
by OALJ for the years 1991-1993 in cases filed from the
Third Compensation District, i.e., in most cases, the
Ports of Camden, New Jersey, Philadelphia, Pennsylvania
and Wilmington, Delaware, where the employer controverted
a claimant's entitlement to voluntarily paid indemnity
benefits.
A review of these OALJ cases demonstrated that the
District Director had forwarded forty-two of these type
cases to OALJ for formal hearing. In twenty-one of these
cases, the ALJ and/or the District Director pursuant to a
remand order ultimately approved a settlement awarding
additional benefits and counsel fees. In fourteen of the
remaining twenty-one cases, the ALJ entered an order
awarding ongoing benefits and counsel fees in "merits"
decisions. Accordingly, while reasonable people could
differ as to what constitutes a "win or loss" for a
claimant or an employer in any specific case, the fact is
that the claimant's received additional benefits and their
attorneys counsel fee in thirty-five of the forty-two
self-help/termination fact pattern cases.
Why did claimants receive additional benefits in five out
of six cases? Generally, employer's counsel's expertise is
at least equal to and in many instances greater than
claimant's counsel in litigating LHWCA cases. In addition,
employers unquestionably have access to greater resources
than claimants to litigate claims. Is sympathy for the
claimant that substantial a factor in trying LHWCA cases
before OALJ?
I have concluded from my review of the OALJ decisions that
employers, in determining when to utilize self-help, do
not consider the aforementioned findings and, just as
importantly, the legislative history behind the 1972
amendments to the LHWCA, i.e., the modem LHWCA under which
still represents the Act that we practice under today.
Prior to 1972, injured longshoremen were treated as Jones
Act seamen for purposes of filing claims against
shipowners 3 as well as an additional (albeit much less
generous) workers' compensation benefit under the LHWCA.
The legislative history to the 1972 amendments
demonstrates that the customary result of a longshoreman's
injury claim prior to the 1972 amendments was for the
injured longshoreman to recover damages, including pain
and suffering, from the vessel owner if he could
demonstrate that the vessel was unseaworthy and for the
stevedore to indemnify the vessel owner for the damages
paid to the injured worker. When all was said and done,
the injured longshoreman essentially had a strict
liability third party claim against his employer with the
vessel owner as the de jure payor but the
stevedore/employer as the de facto payor of the claim
after indemnifying the vessel owner.
On the other hand, the minority of injured longshoreman
that did not have an unseaworthiness claim against the
vessel owner was deprived of realistic compensation
benefits. For example, the maximum compensation rate in
1972 prior to the enactment of the 1972 amendments to
injured longshoreman was $70.00 per week. This maximum
rate had been in effect since 1960. Most state workers'
compensation schemes for maritime workers injured on land
were similarly inadequate regarding the availability and
amount of benefits. In addition, the pre-1972 LHWCA capped
the employer's liability for all indemnity payments other
than permanent and total disability payments at
$24,000.00. Further, the pre-1972 LHWCA did not have any
provisions for assessment of counsel fees against the
employer. Rather, claimant's counsel fee was assessed as a
lien on claimant's compensation in all cases.
The Legislative history to the 1972 amendments describes a
fight for over a decade between stevedores and workers not
unlike the calls for medical malpractice or automobile
liability "reform" we see today. Stevedores and insurers
bitterly rejected any increase in a LHWCA benefits without
legislation overruling the Supreme Court's decisions in
Sieracki and Ryan. Injured workers and trial lawyers
fought just as hard to keep longshore workers status as "Sieracki
seamen."
The 1972 amendments to the LHWCA represented the
compromise to the dispute. Section 905(b) of the LHWCA
eliminated the longshoreman's unseaworthiness claim by
providing that an injured longshoreman demonstrate that a
vessel owner was negligent in order to recover damages.
The stevedore's right to subrogate successful 905(b)
recoveries was expanded under Section 933 of the Act.
Conversely, Congress provided injured worker with a much
more generous and certain compensation remedy under the
LHWCA. For example, the maximum compensation rate was
increased from $70.00 per week to $167.00 per week and a
procedure was set forth for USDOL to increase the maximum
rate on an annual basis without further legislation.
Counsel fees were now assessed against employers in
certain cases and the $24,000.00 cap on non-permanent and
total disability indemnity payments was eliminated. A
presumption was included in Section 920 of the Act that
certain claims came within the Act unless the employer
proved otherwise.
Although the LHWCA was later amended in 1984 and 1990, the
1972 amendments represent the foundation of the
compensation system we practice under today. I would
respectfully submit that the statistics we found in
Kreschollek confirm what we all subliminally know but
rarely say: that, everything else being equal, the
claimant is supposed to win his LHWCA compensation claim.
Thus, the section 20 presumption, the now discredited (but
perhaps still applied sub silento) "true doubt rule"5, the
automatic increases in yearly benefits and the generally
pro-claimant (in the eyes of the employer) interpretation
of the LHWCA rendered by the USDOL to foster the maximum
feasible recovery to the claimant. The truth be told,
stevedoring companies today would reenact the 1972
amendments to the LHWCA to eliminate paying pain and
suffering awards in a heartbeat if the same circumstances
presented themselves as existed for their predecessors in
1972 just as physicians and insurers today would jump at a
"No?Fault" economic loss system if pain and suffering
awards to patients were eliminated.
Given this history and the "self-help" statistics, one
would surmise that employers would be selective regarding
the cases they take to formal hearing. After all, the
likelihood is that the employer will have to pay
additional benefits to the claimant as well as counsel fee
and costs to its attorney and claimant's counsel.
Moreover, employers in successful cases still face the
prospect that the claimant can modify the ALJ's award
under Section 22 of the Act.
My experience is that employers generally do not try hard
enough to resolve matters at the informal level. With
goodwill to all and malice to none, I respectfully offer
the following suggestions:
Try to establish a rapport with the claimant to obviate
the need for claimant to retain counsel. Believe it or
not, the vast majority of injured workers want to get well
and return to the work force. Most workers understand and
respect that the claims examiner has a duty to limit the
employer's exposure to indemnity and medical expenses and
that independent medical evaluations and surveillance are
appropriate and necessary tools. If your relationship with
the claimant gets off on the right foot, the claim is more
likely to be satisfactorily resolved to all concerned.
Do not abuse the self-help remedy. The fact that you have
the right to self-help does not mean it is prudent in all
cases. A telephone call to a claimant or his
representative regarding claimant's employment or
treatment intentions may nip an otherwise contentious
controversion in the bud.
Make a good faith effort to resolve matters at the
informal level. I generally say "Thank you" when an
employer takes an untenable position at the informal level
since it provides me the opportunity to earn a living.
Remember, once the informal period ends, the meter is
running for counsel for the parties and the experts
necessary for litigation. The likelihood is a case will
take on a life of its own once it reaches OALJ. Graceful
exits for either side are problematic.
Pick your fights wisely. I never cease to be amazed when
employer representatives who I have a substantial number
of cases with pick a fight with me over a case with
insignificant exposure when we have dozens of cases with
significant exposure to review. The claimant or his
representative should appreciate it if you give him a
courtesy call about claimant's failure to attend an IME or
return an LS200 before you undertake self-help. You will
in most instances receive the same courtesies from
claimant's counsel. Keep the big picture in mind.
Familiarity breeds contempt. Do not consider a generous
8(i) settlement as a weakness or a contagious illness. An
8(i) settlement resolving a claim for certain is the
employer's best friend. Would you rather settle a claim in
the first year or two after the onset of disability or
still be dealing with it ten years later? The longer a
claim goes on, the harder it will most likely be to
settle. |
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