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

Worker Attorney Involvement Varies Greatly From State To State

Study Objectives Identify/quantify important factors explaining why workers hire attorneys Identify/quantify important factors explaining why workers hire attorneys Suggest strategies to avoid unnecessary attorney involvement and litigation costs Suggest strategies to avoid unnecessary attorney involvement and litigation costs  Strategies for employers, claims managers  Strategies for state WC administrators

Major Findings Workers are more likely to seek attorneys when they feel threatened Workers are more likely to seek attorneys when they feel threatened Some threats may come from the character of the employment relationship Some threats may come from the character of the employment relationship  Employers may mitigate these threats and reduce litigation Other threats may come from the claims process Other threats may come from the claims process  Claims managers and state WC agencies may mitigate these threats

Conceptual Model: Many Factors Shape Workers’ Decisions To Hire Attorneys Nature and severity of injury Worker characteristics – attitudes toward conflict, ease of finding attorney, need for help Workplace characteristics State specific factors  State culture on cooperation/conflict  Design features of WC system

Research Approach And Data Use common statistical methods to isolate the impact of each factor Claims records and telephone interviews for 6,823 claims  Claims with > 1 week of lost time  Analyze 11 larger states  Interviews conducted years post-injury

3 Of 4 Most Important Factors Can Be Impacted By Employer/Insurer Trust in the work relationship Trust in the work relationship  Worker feared being fired  Worker said that supervisor did not think claim legitimate Claims process Claims process  Worker perceived claim was denied Initial injury severity reported by worker Initial injury severity reported by worker

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

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

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

3 Of 4 Most Important Factors Can Be Impacted By Employer/Insurer  Trust in the work relationship  Worker feared being fired  Worker said supervisor did not think claim legitimate Claims process Claims process  Worker perceived claim was denied Initial injury severity reported by worker Initial injury severity reported by worker

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

Workers Who Believed They Are Not Trusted More Often Retain Attorneys

Workers Who Believe They Are Not Trusted More Often Retain Attorneys

WC Agencies And Claims Managers Can Impact Perceived Denials Trust in the work relationship Trust in the work relationship  Worker feared being fired  Worker said supervisor did not think claim legitimate  Claims process  Worker perceived claim was denied Initial injury severity reported by worker Initial injury severity reported by worker

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

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

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

Attorney Involvement More Likely In More Serious Injuries Trust in the work relationship Trust in the work relationship  Worker feared being fired  Worker reports supervisor not think claim legitimate Claims process Claims process  Worker reports claim initially denied, subsequently paid  Initial injury severity reported by worker

Average Injury Severity Reported By Workers Is Similar Across States

Attorney Involvement Increases With Injury Severity

Other Factors Worth Noting That Raise Likelihood Of Hiring An Attorney High school graduates (compared to college graduates) High school graduates (compared to college graduates) Workers who chose to be interviewed in Spanish Workers who chose to be interviewed in Spanish Workers with <1 year job tenure (compared to workers with more tenure) Workers with <1 year job tenure (compared to workers with more tenure) Low back conditions (compared to fractures) Low back conditions (compared to fractures) Several measures that reflect severity Several measures that reflect severity  Surgery or not  Treatment by 1 doctor or 2+ doctors

Possible Application: This Economic Downturn More workers fear losing their jobs than in past recessions More workers fear losing their jobs than in past recessions If claim made, more likely to hire attorney If claim made, more likely to hire attorney Especially in most severely affected states and industries Especially in most severely affected states and industries  E.g., FL construction, MI auto suppliers

Possible Application: Employee Free Choice Act Employee Free Choice Act may increase workers’ compensation costs Employee Free Choice Act may increase workers’ compensation costs If passes, union organizing and employer resistance will increase If passes, union organizing and employer resistance will increase Some affected workplaces will have much lower trust environments Some affected workplaces will have much lower trust environments If so, attorney involvement would increase If so, attorney involvement would increase

Major Findings Workers are more likely to seek attorneys when they feel threatened Workers are more likely to seek attorneys when they feel threatened Some threats may come from the character of the employment relationship Some threats may come from the character of the employment relationship  Employers may mitigate these threats and reduce litigation Other threats may come from the claims process Other threats may come from the claims process  Claims managers and state WC agencies may mitigate these threats