Don't Hold Litigated Files Back from your Defense Counsel

Friday, August 13, 2010 | 0

By Eugene Keefe
Keefe, Campbell & Associates

As we recently advised, throughout the halls of the Illinois Workers' Compensation Commission, arbitrators have been “encouraged” to increase their production by 10%. We have noted throughout the state in the months prior to the edict many arbitrators were already cracking down on “red-line” cases and pressing attorneys on both sides for action. In those cases they are pulling both attorneys in for conferences at the status calls and making the attorneys look hard at cases that are getting old and just not moving. Much progress is being made in the red-line dockets because of this and we applaud that effort.

At the same time, we also have noted a trend which is a bit disturbing and could affect the defense industry/employers/insurance carriers/third party administrator if cases are not being managed properly. We have suggested in this update before that once a moderate to significant case is litigated and begins to age, we strongly recommend it be assigned to defense counsel so initial file work-ups can be done and a cogent defense plan put in place. A call can be placed to Petitioner’s attorney so they know defense is on the file and the file is then monitored by the employer/insurance carrier/TPA and defense counsel.

Often, in an effort to hold the line on costs, many insurance carriers/TPAs will hold and hold and hold litigated cases while they work on authorized treatment and attempt to resolve the claim without defense counsel on the file. Some times this plan works out, the claim is resolved, contracts approved and everyone goes their merry way. Or they may assign the case to defense counsel as “Appearance Only” with instructions to take no action until authorized. Again, in many instances a veteran adjuster may manage the file properly and get it safely closed.

But we have noticed a new trend in the state in which the Arbitrators are showing less patience with claims that have been open for a while and are suddenly before the Arbitrator on a 19(b) or regular motion for hearing in which Petitioner’s attorney is complaining they want to get the case resolved, the adjuster has offered unrealistic money and their client wants the case over. If the case has been motioned once and recently assigned to defense, the Arbitrator normally understands, grants the requested continuance and tells defense to get moving.

However, what happens when discussions break down and the relationship gets choppier? Many times files get assigned on the eve of a status call/trial date with instructions to get a continuance so an IME can be scheduled or vocational counseling started because what was once a good relationship has gone rapidly sour as the value starts to rise. When Petitioner and his/her attorney believe the case is worth substantially more than the TPA, it is a red flag indicating you need defense counsel. In cases where the case has been motioned for hearing two times or more, Arbitrators are tracking it much more closely than in the past and many of them are now taking a harder stance. We don’t know what claimant attorneys are saying to the otherwise innocent adjuster, but we see what they are saying to the Arbitrators. Those conversations are clearly creating a harder line.

We have witnessed on several occasions since the first of this year, situations in which Arbitrators have told defense counsel, in a pre-trial in front of the masses where all can hear, something along the lines of: “It looks like your people have been sitting on this case for a while and why haven’t they set an IME already/paid for treatment/started voc/wiped claimant’s nose/whatever? I think they’ve slept on those rights and you need to pick a date. This case is going to hearing.” This usually comes on the heels of Petitioner’s attorney telling the Arbitrator that they’ve been working on this case for however many months and “we’re just not getting anywhere.” As veteran defense observers, we have seen cases that have been filed for less than a year in which the Arbitrator has thrown this concept of laches into the conversation and forced defense to scramble to get the case ready for trial with only half of any true defense. We at KC&A haven’t been pushed into a trial in that situation, so we can’t tell you the outcome of any appeals or trials, but we are continuing to monitor the issue.

We would take this opportunity to again recommend to our readers that once a file is litigated you assign it to defense to help monitor the case. Copies of medical records can be obtained, a litigation/handling plan can be put in place and then the entire defense team can monitor the file. If the case goes well, the defense costs will be minimal anyway. But if the case goes sideways, your attorney is not standing in front of the Arbitrator trying to explain why they just got a file, have no medical records or experts and can’t really deny whatever is being said to the Arbitrator. In cases like that your defense costs and exposure spike as more time is spent getting a file ready than is probably necessary.

<i>Eugene Keefe is a founding partner of Keefe, Campbell and Associates, a Chicago workers' compensation defense firm. This column was reprinted with his permission from the firm's client newsletter.</i>