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Langham: Who Should Be in the Room

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WorkCompCentral recently reported "Task Force Members Surprised by Self-Insurers' Contention." The story describes efforts of the Alabama Bar to recommend legislative reform of workers' compensation in the Cotton State (or the Camellia State; Alabama apparently has no official nickname).

Judge David Langham

Judge David Langham

A legislative effort in that state had caused the bar to form a committee for the purpose of recommending change. The story says that because it was a bar committee, "only lawyers could serve."

The reports from Alabama led to a blog post by Robert Wilson, titled "Should Legislative Reform Be Left Only to Attorneys?" He concluded about Alabama reform that "key stakeholders were left out of those talks." He opines that there are many "interests" in workers' compensation and therefore perhaps there should be room at the table for a greater variety of voices.

Of course, any corporate entity cannot be "in the room," except through some human agent. Some will say that it is quibbling to debate whether a particular agent is or is not an attorney. The real point, however, may be whether those corporate interests select some attorney as their agent(s), or whether some attorney(s) interjects him/herself purporting to represent that corporate interest. 

Just after I had read Wilson's opinions and thoughts, I received an email from Bill Zachry of the Sedgwick Institute. He is a longtime workers' compensation aficionado. He spent many years leading the risk management efforts of Safeway (a large grocery store chain). I have spent several hours discussing workers' compensation with Zachry, and he is a wealth of information.

The email he sent was accompanied by a short paper he authored for the Sedgwick Institute, "A Question of Legislative Reform."

With Zachry's permission, I share the article in hopes that it might stimulate conversation and debate about workers' compensation, and our perspectives. What follows is all directly quoted from that paper.

Who should be responsible for “fixing” the workers compensation system?

In all states the ultimate responsibility is with the state legislature (with some assistance from the insurance commissioner and the local division of workers' compensation). Workers' compensation reform is a three-legged stool: legislation, regulation and case laws (amicus). Focusing on only one of these is short-sighted and ineffective. There are technical issues, social issues and a whole lot of politics that go into legislative and regulatory reforms.

First question is: What is your goal? What should the ideal system look like? As Yogi Berra once said, “If you don’t know where you are going, you will never get there.” Second question is ,“Who are the stakeholders?” In some states the stakeholders are only the employers and injured workers. In other states the stakeholders include additional bodies such as attorneys, doctors, insurance companies, third-party administrators, the division of workers' compensation and even other vendors.

Next question is: Who represents what? In some states, labor wants to be the exclusive representative, and applicant attorneys want to have that responsibility. In many states representatives from self-insured companies perform this responsibility. Some have defense attorneys doing the job.

Much of the legislation which is done is intended to solve specific problems or overcome specific barriers (usually expense and inadequacy of benefits to the injured workers). The workers' compensation system is rife with misplaced financial incentives and a lack of overall perspective. Most good legislation involves a vetting process (with frontline practitioners) to ensure that the goals and intent are achieved. Oregon is a good example of having labor and employers managing the legislative changes over a long time. Double-digit decreases in expense, doubling of benefits.

His is one perspective of who should be in the room. A critical consideration that it suggests is that the analysis may be deeper than one might note at the outset.

The WorkCompCentral article cited the absence of non-lawyers, as expanded upon by the Wilson blog post. That dovetails back into Zachry's description of the engagement of "self-insured companies," which is at the heart of some of the recent Alabama discussion.

Perhaps the real point is not so much "who" is in that room, but who selects the people in that room. As Zachry notes, "who represents what?"

The issue may be both about who represents any particular group and who "wants to have that responsibility." Thus, perhaps, the situation is one in which there is disagreement among groups that each have some desire to be heard as the champion of some constituency. There is the potential for an individual attorney to have thoughts, which may or may not be consistent with positions of some body corporate like the bar.

Likewise, some employer may have contentions that may or may not parallel some business group. The positions and focus of any constituency group may perhaps represent internal compromise that was required for group consensus. 

This suggests that in any discussion of reform, there might well be debate as to what reform itself means. As Zachry asks, "What is your goal?" He queries what "should the ideal system look like?" Is the goal an ideal system? Is such an outcome, like beauty, in the eye of the beholder? In other words, what is ideal for one person, market segment or entity might be less than ideal to others.

In the end, it seems likely that whatever becomes law will tend to result as compromise among the perspectives of various inputs, goals and thoughts. 

In the end, the decision of which groups or individuals are listened to is up to the legislature (the "listener"). Any individual, market segment or corporate entity can decide what, when and how to express her/his/its thoughts. But ultimately, the legislative process will decide which input is persuasive, who speaks for what perspective and what the law will say.

It will be an imperfect process, a human process. As Winston Churchill noted, “Democracy is the worst form of government, except for all the others.” Accepting our humanity, failings and challenges, it is incumbent on us all nonetheless to strive for a workers' compensation system that is a grand compromise that has due consideration for the various perspectives of employees and employers.

After all, that is who this system is for. 

David Langham is deputy chief judge of the Florida Office of Judges of Compensation Claims. This column is reprinted, with his permission, from his Florida Workers' Comp Adjudication blog.

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