Keefe, Campbell & Associates, LLC

Editor’s comment: We will always remember Illinois State Chamber President Doug Whitley telling us he visited the Appellate Court, Workers’ Comp Division. Doug was advised by the court’s staff there was very little to worry about or controversial at the court. The staff advised that the appellate justices knew the rules and case law and quietly adhered to them. Well, we agree the justices unquestionably know the rules and case law; as citizens and academicians we have to ascertain and reach our own conclusions as to whether they closely adhere to them.

Some court observers feel the workers’ comp appellate rulings of the last decade have been decidedly claimant-friendly. As we have advised our readers over and over, in the last decade, there has been a single appellate ruling favorable to Illinois business–Airborne Express v. IWCC. Please note the reviewing courts at the Circuit, Appellate and Supreme Court levels issue 20-50 rulings a year—if you do the math, one pro-business ruling in a decade against 200-500 for labor is way less than one per cent. And when you consider the view of some court observers, the reviewing courts appear to be wildly expanding coverage and stripping away even the most traditional and logical defenses. Illinois WC costs are going up and jobs are leaving or not coming back. With respect to the august members of our reviewing courts, it is our reasoned academic view just about every other ruling “limbos” over, under and around the English language, the statute and the rules to mold the law in the image and likeness of what the Petitioner’s/Plaintiff’s bar wants–compensability of any and every claim. We point out to everyone, the legislation hasn’t truly changed—the change in workers’ comp law or rules comes from the reviewing courts at every level.

Sisbro–a simple legal rule or is it?

By way of background, earlier in this decade our current Illinois Supreme Court issued two workers’ compensation rulings that very clearly and cogently outlined a single principle of law and appellate procedure in the workers’ compensation arena. In landmark cases named Sisbro and Twice Over Clean, our highest court reversed the lower Appellate Court, Workers’ Compensation Division not once but twice. Please note both rulings resulted in very detailed appellate rulings resulting in denial of work comp benefits being summarily reversed. When benefits were provided due to reversal, substantial monies were awarded to claimants.

At the time, the workers’ comp community felt the members of the Commission were very liberal. Most folks on both sides felt this new Supreme Court rule that you “can’t change the IWCC ruling on the facts” would preserve expected liberal rulings at every level of appeal. To implement this patent and simple legal position, the Supreme Court clearly stated in the rulings mentioned above the Appellate Court and all lower Circuit Courts were not to overrule the Workers’ Compensation Commission’s determination on the facts of the case. They demanded strict adherence to the concept the Commission’s factual determinations could not be overruled as being “against the manifest weight of the evidence.” Basically, if there was even minimal support in the record for the Commission’s factual determination in a decision, the reviewing courts had to affirm.

So, everyone in our industry felt a factual determination by the Commission was effectively final. We have seen numerous petitions for sanctions for frivolous appeals from members of the claimant bar, if a claim was being appealed by an employer solely on the facts. Case after case followed with the Appellate and Circuit Courts routinely affirming Commission decisions if the only issues were factual in nature.

Sounds pretty simple; so what happened?

Let’s look at this new controversial ruling that you can’t find on the web and/or read unless you ask us for a copy. In ABF Freight Systems v. The Workers’ Compensation Commission 01-08-3074WC, claimant was a truck driver with a relatively routine back strain. He underwent appropriate medical care. He actually was very close to being completely done and was to be MMI and returned to work very shortly. Then while riding his motorcycle, claimant was in a traffic accident and thrown from his bike to the pavement at speeds he admitted were about 50 miles per hour. He went from having an almost healed back strain to needing six days in the hospital and an implanted pain pump. Medical bills from the motorcycle crash are welll into six figures and continue today, years after the event. Following the non-work-related accident, claimant will have severe and lasting disability and medical attention for the rest of his life, not due to anything that happened at work.

An intervening cause is an event which occurs between the original work-related injury and the final or permanent result. Thus, from an academic and legal perspective, the “causal connection” between the original work injury and new medical care, lost time and permanent disability is broken by the intervening and superseding cause. An intervening cause represents a separate act or omission that breaks the direct connection between the injured worker’s initial injury and a second injury or loss and relieves the employer of liability for the sequalae of the second injury or loss. If you research it, the most common intervening and superseding causes are uncontrollable natural forces and negligent human conduct. In this set of facts, the intervening cause(s) was claimant’s decision to ride a motorcycle and the person who caused this second severe accident away from work.

So, what happened with the litigation? Well, claimant’s counsel made the claim Petitioner’s post-motorcycle accident condition of ill-being and all medical care and disability was related to work. Their theory was claiment hadn’t “completely recovered” from the earlier back strain so everything that happened in the obviously and patently non-work-related motorcycle crash was the responsibility of the employer. In defending the claim, the obvious defense was the long-time and well-settled concept of the motorcycle accident being an “intervening and superseding” event that cut off all liability for the employer.

Intervening and superseding event—sounds complex but actually a simple common sense approach

When one teaches workers’ compensation law and practice, as we do, law students are taught if a claimant has a bruise on the arm due to a work-related injury and then breaks the arm in twenty places in a non-work-related event, it is impossible for a hearing officer to peer into a crystal ball to provide any benefits for the prior work-related contusion. We feel that is simple common sense. In such a situation, the hearing officers outline claimant has to take care of his or herself for the sweeping non-work-related occurrence. We feel this concept summarizes a very basic and straightforward workers’ compensation legal principle in what used to be all 50 of the United States and the four Federal workers’ compensation statutes and rules. We hate to report Illinois has quietly dropped this defense in this unprecedented ruling in ABF Freight Systems.

What happened at the Commission level in ABF Freight Systems? Well, it is our opinion as Commission observers they did their job and followed existing law. The Commission carefully considered all the facts and applied the law and denied benefits. They ruled claimant’s current condition of ill-being following the motorcycle crash was due solely to that accident. The Commission was not inclined to look into a crystal ball to try to cipher out any remaining effect of the work-related strain; claimant’s condition had changed so dramatically due to being thrown to the pavement at high speed, medical care and lost time was now ruled to be solely due to that occurrence, since claimant’s condition was measurably worse after the motorcycle crash. Please note their ruling followed the law but their made clear and concise factual rulings that any veteran legal observer might feel would be locked in on appeal.

So, as the guard at the door to the Wizard of Oz told young Dorothy–Not So Fast!! Not So Fast!!!

Please remember we are in Illinois when we write this. On appeal, it is our opinion the reviewing courts ended, eradicated and stripped away the defense of “intervening and superseding” occurrence. They ruled that since there were still some sequalae, no matter how minimal, of the work-related back strain present, anything that happened to claimant thereafter was now the employer’s responsibility. Therefore the employer was on the hook for six-figure medical bills, lost time and maybe seven-figure permanency; all due to a patently and unquestionably non-work-related event. If claimant is off work and treats for ten years and then dies from the effects of this motorcycle accident, several million in benefits will be owed in a fashion no other workers’ compensation system on this planet would award benefits.

So you may ask this rhetorical question–do you mean to tell us if a claimant has a sore toe and hasn’t completed medical care and while off work is hit by a semi-tractor-trailer at high speed, the employer is responsible for the death? The answer, if you follow this new and unprecedented rule is now yes! If claimant has a work-related sunburn and gets killed by an alien death ray, if you follow this ruling, it is all compensable. We assure you we are not trying to be silly–in real life, this claimant had a minor strain and was already released to light duty; he was very soon to be released to return to work. He obviously felt well enough to ride a motorcycle. He fell off it at high speed and was taken by ambulance to an emergency room and then hospitalized for six days! How can anyone find the sequalae of that accident related to work? We remain adamant that it is inconceivable an Illinois employer should have to pay a dime for what happened to this unfortunate individual as a result of the motorcycle crash—it had nothing to do with his work.

Ignoring Sisbro and more Appellate Secrecy

What we feel is even more galling to the hearts and minds of Illinois business are two things. One, the Commission made a ruling on the facts. Not more than a couple years ago and as more fully outlined above, our Supreme Court promulgated the Sisbro concept to everyone in the Illinois workers’ compensation community confirming factual rulings are locked in and can’t be changed by the reviewing courts. Oops, that appears it may only apply when it means benefits are awarded. If benefits are denied, it may now appear there may be a Super Rule that trumps other rules–it may be okay to reverse on the facts if it means claimants get money. We cannot divine any other reason this Commission ruling could have been reversed.

Second, the Appellate Court did two things in handling this matter that frustrates and sometimes infuriates many workers’ compensation practitioners. First, they “non-published” their very detailed, thoroughly researched and critically important ruling, effectively limiting the pool of readers to the parties and a few Commission insiders. We point out their decision to “non-publish” the ruling hides their reasoning from the public and more important, does not allow anyone to be guided by their mind-set on critically important issues. We always point out such secret rulings could result in a claimant not knowing the law and dropping an appeal they might otherwise win; conversely, it may also have the impact of an employer fighting an appeal to then find out about the clandestine determination of the court and have to tell their clients the cost of getting an appeal bond along with the legal fees and time incurred in the appeal may have been wasted. We also are unaware of any other Appellate Court in the country that keeps so many rulings secret.

You may ask us how we can apparently violate the Court’s ruling by writing this article when their decision is “non-published”–well, they have advised the State Bar Ass’n they don’t mind anyone publishing non-published rulings so until they change that paradoxical position, we will publish. We also hope to see the day that any and every decision by the Appellate Courts reach the new technology that allows their rulings to rapidly hit the web. If you know how to do it, you can go to the Illinois Courts website and listen to the audio recordings of oral arguments in this case before the Court. But you can’t read their ruling!! There is no conceivable reason to hide their decision-making processes from the taxpayers and citizens who pay for and need their guidance in litigation.

As President Obama has said on many occasions, “Sunlight is a great disinfectant.” We point out Illinois is the home state for our Commander-in-Chief and wonder how he would feel to learn so many major workers’ compensation appellate rulings are kept out of the sunlight and under a proverbial basket.

Second, they refused to certify the ruling for consideration by the very court that imposed the “manifest weight of the evidence” rule–the Appellate Court members were asked to certify the claim for review by our highest court and would not do so. Please note they don’t have to tell any of us what their thinking is on non-publishing or not certifying decisions—we point out in Sisbro and Twice Over Clean, the members of the Court published and certified two rulings where benefits were denied by their members and the fact of certification allowed the Supreme Court to then reverse and award benefits. In this case, where they reversed a denial and awarded benefits, however, they wouldn’t allow the Supreme Court to even consider their award.

So what do we do about this? Does anyone in our reviewing courts care about their effect on jobs in this economy?

We don’t feel this ruling is going to have a massive impact on Illinois business. It only applies to someone who has two or more accidents which you have to hope doesn’t happen too often. The ruling is more irritating than monstrous in its implications. But we have watched the courts expand the coverage of the Act and strip away defense after defense and at some point, a thousand little cuts to Illinois business will certainly kill jobs and any hope of economic recovery in this horribly run state. We also point out the job of underwriting many Illinois WC claims is comical to consider—you can’t tell if they will actually follow a law or rule that has been in place for a century!! The impact of pro-Plaintiff rulings combines to have a deleterious effect on jobs in this state. Here are a few:

Beelman Trucking where double weekly PPD benefits were awarded to someone already being paid lifetime total and permanent disability benefits;

Cassens Transportation where someone receiving wage loss differential benefits from their employer can only have them lowered if permanent restrictions magically change, even if they later earn millions;

Interstate Scaffolding where the Supreme Court ruled you have to pay TTD to an employee who commits a crime and gets fired on light duty;

Leung where a flight attendant who hurt herself putting on her coat was provided benefits as a “traveling employee”;

Potenzo where a truck driver was attacked by an unknown assailant for reasons completely unrelated to his work and provided benefits as a “traveling employee”; and

ABF Freight Systems where the defense of intervening and superseding event may have ended

These rulings will also certainly cause state and local taxes to rise as governments struggle with increased WC costs.

Well, forewarned is forearmed. We urge you to push return to work and MMI in all claims—the faster they are back, the better your chances of denying non-work-related injuries. Note the concept of “intervening and superseding event” is going to be a quizzical defense and you shouldn’t closely rely on it. If someone being treated for and off work for a work-related event has a non-work-related setback, keep managing the claim because they may hold you liable for it later. Consider litigation avoidance techniques—send a reply if you want our protocols.

And remember folks, it is now May 2010–the next statewide elections are looming in the first week of November. At present, Republican Bill Brady holds a decided lead in the polls over current Governor Pat Quinn. We are very confident support for Bill Brady is support for workers’ comp reform. Consider joining the Illinois State Chamber and follow the lead of its solid president Doug Whitley in seeking reform of this system and our Courts. Consider joining Doug’s Employment Law Council and think-tank. Consider donating money to support the cause of reasonable workers’ comp reform that reasonably and fairly takes care of injured workers in Illinois but doesn’t reward them with millions of dollars for falling off motorcycles.

If you want a copy of the ABF Freight Systems decision, send a reply. We appreciate your thoughts and comments.

Editor’s comment: In Cramer v Viacom Outdoor 2009 WL 3807341 (Ill.Indus.Com’n), Commission Panel B upheld denial of benefits determined by the Arbitrator based upon an injury which occurred at an employer sponsored charity bowling event. The pertinent facts noted the event occurred during the afternoon hours of what was otherwise a normal business day. The employees including Petitioner worked the earlier part of that day in the office up until 1:30 PM when they departed for the event at a local bowling alley. The employees were paid regular wages for the time they attended the event and if they didn’t attend, the office manager testified they would have been paid regular wages but would have been required to attend to regular office duties.

While bowling, Petitioner sustained a comminuted fracture of the articular surface of left distal radius and a comminuted fracture of the left humeral neck along with a tear of the left supraspinatus. She underwent an open reduction with internal fixation of hardware to repair the radius fractures. As a result she has lost significant range of motion in both the wrist and shoulder joints.

Even though Petitioner testified she felt “pressured” to attend the event the claim was denied. We note she did not testify that she was ordered or assigned to attend the event, as the statute would require for injuries to be compensable. The employer’s witness who was their Human Resources manager testified employees were not ordered or assigned to attend the event. While language in notice of event strongly encouraged everyone to participate, it provided employees not wishing to participate will be required to work their normal day. Employees were asked to advise whether or not they would be participating. Each participant was required to make a minimum $15.00 donation. However, the company promised to pay for the bowling and shoe rental.

The basis for the denial is the exclusionary language found in Section 11 of the Act. The relevant portion of Section 11 reads as follows: “Accidental injuries incurred while participating in voluntary recreational programs including but not limited to athletic events, parties and picnics do not arise out of and in the course of the employment even though the employer pays some or all of the cost thereof. This exclusion shall not apply in the event that the injured employee was ordered or assigned by his employer to participate in the program.”

Another key fact was an attendance record showing ten of the 36 employee staff (27%) did not sign up to attend the event, although they did make a donation and there was no evidence presented that any of the employees who did not attend the event were disciplined or discriminated against in any way by the company.

This case is a good example of an Arbitrator who heard all of the evidence and determined all appeared to be credible, but noted the language of the Act and the overwhelming facts in the matter did not support compensability under the Illinois WC Act. Respondents can also take away the lesson that good investigation and presentation of evidence still is an effective method of defending claims with actual defenses.

If you are planning a recreational outing for your workers now or in the future, we have a release form you can use to insure accidents occurring during the event are not compensable. If you would like a copy of the form, send a reply. This article was suggested by a knowledgeable reader and we thank her for the tip. It was then researched and written by Shawn R. Biery, JD. Please forward any comments or requests to sbiery@keefe-law.com.

Editor’s comment: Taking you back down memory lane, we recall the first Chairman appointed by our current Governor-out-on-bond, supported a change to the funding of the later renamed Illinois Workers’ Compensation Commission. It was the new Chairman’s goal to follow the model of the State of Missouri and a number of other states to move the Commission out of being funded by the General Revenue Fund for our state and into a new anti-business insurance and payroll surcharge which didn’t require him to go to the legislature and the Governor to make the changes he wanted to make at the Commission. We assure you some of the changes he wanted were to double or triple the number of Arbitrators, bring in or “appoint” any number of Plaintiff/Petitioner attorneys to serve in his image and likeness and more than double the budget of the Commission.

What he got was the Illinois Industrial Commission Operations Fund Surcharge. This was supported the Democrat House, Senate and Governor because they were then free to spend the monies they used to have to spend for the Commission on other fun stuff. In our view, the problems were two-fold.

Illinois business now had to fully fund the Plaintiff/Petitioner-oriented Commission to provide new laws and rules to be administered by folks beholden to Illinois labor;

The monies were used to basically increase workers’ compensation costs in this state to the stratospheric levels they have currently reached;

The surcharge added a new anti-business fee which would more than exponentially increase the budget of the Commission.

On April 22, 2004, the Illinois State Chamber of Commerce filed suit against the State of Illinois boldly challenging the newly imposed fees created by then-Governor Blagojevich’s new Industrial Commission Operations Fund Surcharge. The complaint alleged the statute imposed a surcharge on employers’ and workers’ compensation carriers intended to generate $31-million to fund the operations of the Industrial Commission, even though the actual budget for the Industrial Commission was dramatically lower. The complaint alleged the fees were unconstitutional and improper. The fee imposed the total cost of workers’ compensation administration and adjudication solely on Illinois employers. Most important, the bill over-funded the Industrial Commission for no particular reason.

In November 2004, Circuit Court Judge Patrick McGann declared unconstitutional the Industrial Commission Operation Fund Surcharge. That ruling called into question hundreds of business fees the state enacted or increased at the time. McGann ruled the surcharge created an arbitrary class of taxpayer and violated a provision of the state constitution that requires all new fees to operate like existing fees, which raise only enough money to cover specific activities. In the case of the workers compensation insurance surcharge, the fee ostensibly was to pay the cost of operating then-named Illinois Industrial Commission.

McGann ruled the surcharge had no “reasonable relation” to the cost. He noted in his ruling the workers compensation surcharge brought in $31 million and $22 million of it was not going to the Commission but to the state’s general fund. “The surplus resulting from this fee increase was clearly anticipated,” McGann wrote in his ruling. He added, “This is clearly beyond the role of fees in the financing of governmental operations.”

The Illinois Supreme Court later ruled McGann correctly refused the state’s request to dismiss the case, but added he had acted prematurely in ruling for the State Chamber and sought more factual findings. State Chamber President Doug Whitley was furious to see our highest court not simply note the State agreed with all the allegations and affirm the ruling. The litigation then ran on for five-six more years.

At present, the parties have reached a class action settlement. Your organization may be able to get monies back. Preliminary approval for settlement of the lawsuit has been provided by the Circuit Court of Cook County. The sum of $3,300,000 which now resides in a Protest Fund will be placed in a claim fund to be distributed to class members who can support their claim for repayment. The support for claim can be made with documentation of cancelled checks, invoices showing the surcharge or other proofs of payment as long as they make a claim for repayment during the claims period in the appropriate manner. The method to make a claim is currently proposed to be with either mailing a claim form to the Administrator Robert Langendorf or emailing the Administrator at robert.langendorf@gmail.com.

The amount of refund will be limited to 45% of the Surcharge paid between July 1, 2003 to June 30, 2004 and 10% of the Surcharge paid July 1, 2004 to June 30, 2009. The current proposed settlement agreement can be seen on the web at IWCC-Chamber preliminary settlement agreement and the preliminary approval order can be found on the web at IWCC-Chamber settlement preliminary approval ORDER.

We urge our readers to continue to support State Chamber President Doug Whitley and the Illinois State Chamber of Commerce that is clearly out on point in trying to reform workers’ compensation in this state.

This article was researched and written by Shawn R. Biery, J.D. You can direct any questions, get help to handle or receive a claim form and/or claim form worksheet with reply to Shawn at sbiery@keefe-law.com.

Editor’s comment: If your organization uses lots of independent contractors, better be forewarned. Starting right now, the IRS is to begin intensive audits of 6,000 randomly selected U.S. employers. One of the key targets will be determining whether employers are improperly misclassifying workers as independent contractors to save on taxes and legal risks.

The National Research Program audits will generate the IRS’s first statistical analysis of employment tax compliance since 1984. The audits will stretch across all industries and company sizes. We recommend you insure your employment and tax records are ready for an IRS audit. Federal officials believe the recession encouraged more employers to classify members of their workforce as independent contractors. Classifying workers as independent contractors might save money for some employers who won’t pay for contractors’ healthcare and pension benefits or for the employers’ half of the Social Security and Medicare taxes on workers’ wages.

The line in the sand is how much control the employer has over the worker’s schedule, materials, behavior, risk level and everything else. A recent U.S. Government Accountability Office (GAO) report says employee misclassification “could be a significant problem with adverse consequences” because it reduces tax revenues flowing to the government.

FedEx was the poster child for the contractor battle. The IRS originally hit the company with a $319 million tax assessment for improperly classifying 12,000 of its drivers as independent contractors. But earlier this month, the IRS backed off the assessment and allowed the workers to be classified as employees. Still, several states aren’t giving up the fight and may sue FedEx over those classifications.

The GAO report says the number of misclassified workers uncovered by state audits had increased from approximately 106,000 workers in 2001 to more than 150,000 workers in 2007. The 6,000 NRP audits will include face-to-face interviews, plus a line-by-line review of the company’s employment tax returns (IRS Form 941) and related forms and documents. Audits will mainly focus on tax returns for the calendar years 2007 and 2008.

The IRS has stated these audits will focus on five primary employment tax issues:

1. Worker classification

2. Fringe benefits

3. Reimbursed expenses

4. Officer compensation and

5. Non-filers.

Forewarned may be forearmed so don’t be surprised when and if the random audit hits your doors. Please do not hesitate to reply with your thoughts and comments.

Editor’s comment: The Illinois Commission has posted new versions of the Request for Hearing (IC9) form also commonly known as the “stip sheet” along with five new arbitration decision forms

v Regular

v 19(b)

v 19(b-1)

v Fatal, and

v Nature and extent.

In addition, they have posted a list of boilerplate paragraphs that users can copy and paste into the order section of the decision.

The forms were revised by a forms committee of hearing officers, and the proposed changes were circulated among all arbitrators and commissioners. The committee standardized the forms, added text to reflect the fee schedule and other changes, added email fields and other updates. They are distributing the print version of the Request for Hearing form as soon possible. When the forms are delivered from the printer, they will distribute them to all offices and to Downstate arbitrators. Until then, you will only be able to obtain the form from their website.

When the Illinois Commission issues new forms, they allow six months from the revision date for parties to make the transition. After August 1, 2010, outdated forms may be returned to the filing party.

To download the new forms, go to http://www.iwcc.il.gov/forms.htm

Editor’s comment: Last week, we published an article about self-administered MSA trusts. We were stated:

We caution our readers the injured worker has to be advised Medicare Set-Aside monies cannot be used until the worker is eligible for Medicare benefits. Once the worker is eligible to receive Medicare benefits, the monies supplant the federal benefit–the monies have to be used to pay Medicare-covered medical or other expenses related to the work injury or management of the MSA until they are used up. Most important, the injured worker has to annually report what they do with the money to CMS.

Fran Mohrmann of Travelers Insurance who is one of the top Medicare/CMS/MSA folks in the U.S. claims industry pointed out this statement above may have been accurate five years ago but it isn’t accurate now. She cited language from the CMS 2005 memo which states:

Q3. Use of WC Settlement Funds Prior to Medicare Entitlement – May workers’ compensation settlement funds attributable to future medicals be used prior to Medicare entitlement?

A3. For claimants who are not yet Medicare beneficiaries and for whom CMS has approved a WCMSA, the WCMSA may be used prior to becoming a beneficiary because the amount was priced based on the date of the expected settlement. Use of the WCMSA is limited to services that are related to the workers’ compensation claim or settlement and that would be covered by Medicare if the individual were a Medicare beneficiary. The same requirements that Medicare beneficiaries follow for reporting and administration are to be used in the above cases. The CMS will not pay for any expenses related to the workers’ compensation illness or injury until a self-attestation document or a full accounting of all monies expended from the WCMSA are sent to the lead contractor upon Medicare entitlement. At that time, the lead contractor will adjust the WCMSA record to reflect the expenses paid prior to entitlement.

As always, our goal is to get things right and kidding aside, Fran has an almost encyclopedic recall of such government minutiae. We again salute her. If you ever need to contact Fran, send a reply and we will direct it to her for response.

One concept that routinely falls through the cracks of training and handling of legal issues for all lawyers is what you need to do when you are asked by a friend, family member or acquaintance about a matter that you don’t traditionally handle. For example, if you are house counsel for a major software company and handle IT and patent issues but your cousin calls about a real estate closing that isn’t going well and asks for “informal” advice. In such settings, we feel you are going to have to do one of two things;

• First, if you are not going to handle or comment on the matter in any way, tell the friend, relative or colleague you will not handle it and they should consider seeking other counsel;
• In the alternative, if you are going to affirmatively discuss, comment or provide any sort of direction or advice of any kind, open a file and let them know you are doing so.

In the first instance, you may want to keep a personal record of the inquiry and your response to it. In personal injury claims, you may actually want to advise the person both of the fact you aren’t handling the matter and also advise them of the applicable statute of limitations, as appropriate.

In the second instance, you have not one but two problems to consider. The preliminary issue in “odd jobs” for the lawyer working in-house or being asked to do tasks outside those you were hired by a law firm to provide, you need to consider is what to do in relation to your employer and job. We recommend all law firms and companies that hire attorneys address the concept with a clear written policy. At a minimum, the lawyer should advise the company or firm about all legal inquiries and how they are handling them. Second, the lawyer needs to create a file available for review by your employer and manage/maintain it to avoid either malpractice or ethical problems. Please note in-house counsels can buy “odd-job” legal malpractice insurance to avoid liability if side work goes sour.

We caution the lawyers, general counsels and law firm managers who read this KC&A Update to understand, if you don’t have a policy on “odd jobs,” your lawyers will still get inquiries but potentially fly under the radar on managing the matters—you don’t want that. We truly feel you need full disclosure so you don’t have corporate or partnership liability for claims you don’t even know about. If the attorneys receive any monies or gifts or other income for such work, it should also be disclosed to the main employer, whether you seek some or all of the compensation being provided to the attorney. Again, we recommend you anticipate this potential and address it first and not at a later time.

As to maintaining legal work for “odd jobs,” our recommendation is all legal files be updated no less than once a quarter with diary dates for the next action required. Failure to do so will always cause concerns about one of the three most important sources of ethical failures—failure to maintain and update files.

Editor’s comment: One concept that routinely falls through the cracks of training and handling of legal issues for all lawyers is what you need to do when you are asked by a friend, family member or acquaintance about a matter that you don’t traditionally handle. For example, if you are house counsel for a major software company and handle IT and patent issues but your cousin calls about a real estate closing that isn’t going well and asks for “informal” advice. In such settings, we feel you are going to have to do one of two things;

First, if you are not going to handle or comment on the matter in any way, tell the friend, relative or colleague you will not handle it and they should consider seeking other counsel;

In the alternative, if you are going to affirmatively discuss, comment or provide any sort of direction or advice of any kind, open a file and let them know you are doing so.

In the first instance, you may want to keep a personal record of the inquiry and your response to it. In personal injury claims, you may actually want to advise the person both of the fact you aren’t handling the matter and also advise them of the applicable statute of limitations, as appropriate.

In the second instance, you have not one but two problems to consider. The preliminary issue in “odd jobs” for the lawyer working in-house or being asked to do tasks outside those you were hired by a law firm to provide, you need to consider is what to do in relation to your employer and job. We recommend all law firms and companies that hire attorneys address the concept with a clear written policy. At a minimum, the lawyer should advise the company or firm about all legal inquiries and how they are handling them. Second, the lawyer needs to create a file available for review by your employer and manage/maintain it to avoid either malpractice or ethical problems. Please note in-house counsels can buy “odd-job” legal malpractice insurance to avoid liability if side work goes sour.

We caution the lawyers, general counsels and law firm managers who read this KC&A Update to understand, if you don’t have a policy on “odd jobs,” your lawyers will still get inquiries but potentially fly under the radar on managing the matters—you don’t want that. We truly feel you need full disclosure so you don’t have corporate or partnership liability for claims you don’t even know about. If the attorneys receive any monies or gifts or other income for such work, it should also be disclosed to the main employer, whether you seek some or all of the compensation being provided to the attorney. Again, we recommend you anticipate this potential and address it first and not at a later time.

As to maintaining legal work for “odd jobs,” our recommendation is all legal files be updated no less than once a quarter with diary dates for the next action required. Failure to do so will always cause concerns about one of the three most important sources of ethical failures—failure to maintain and update files.

Please do not hesitate to respond with your comments or thoughts or post them on our blog.

Editor’s comment: A few weeks ago we sent a Freedom of Information Act request to the IWCC requesting production of their Arbitrator performance statistics for the last couple of years. We are happy to confirm they answered the request in a timely and professional fashion. While it might seem trivial to a casual reader, we assure our readers this may be the first time in Illinois history such information has been widely and openly published. We applaud the current administration for opening up their inner operations to review by the taxpayers and larger public.

The resulting statistics were was quite interesting. Some time in the last couple of months, some of the opinions we printed about the job requirements of Arbitration staff at the IWCC were felt by some to be a bit controversial. Please accept the following as a brief summary of what those statistics showed.

We will not provide individual Arbitrator statistics, just the highs, lows and averages in some of the more enlightening categories. Several categories of information we received will not be reprinted.

2007 All Illinois Arbitrators

Category                                  Highest Amount           Lowest Amount           Average

Number of Settlements               2,589                            1,146                            1,573

# of Awards                               240                               38                                 110

# of Dismissals                          278                               89                                 205

# of days to issue an award        163                               15                                 49

% of late awards                        88%                              0%                               28%

% of cases appealed                  70%                              25%                              49%

% of appeals affirmed                 100%                            29%                              68%

% of appeals reversed                16%                              0%                               7%

% of appeals modified up            30%                              0%                               14%

% of appeals modified down        43%                              0%                               10%

2008 Chicago Arbitrators only

Category                                  Highest Amount            Lowest Amount           Average

Number of Settlements               1586                             1074                             1267

# of Awards                               107                               68                                 89

# of days to issue an award        72                                 13                                 46

% of late awards                        78%                              0%                               27%

% of cases appealed                  62%                              39%                              49%

% of appeals affirmed                 82%                              48%                              62%

% of appeals reversed                19%                              0%                               7%

% of appeals modified up            26%                              4%                               17%

% of appeals modified down        26%                              0%                               13%

2008 Downstate Arbitrators only

Category                                  Highest Amount         Lowest Amount            Average

# of Settlements                        2,272                            988                               1,715

# of Awards                               268                               52                                 128

# of days to issue an award        93                                 16                                 39

% of late awards                        77%                              0%                               18%

% of cases appealed                  66%                              28%                              50%

% of appeals affirmed                 90%                              41%                              67%

% of appeals reversed                20%                              0%                               8%

% of appeals modified up            24%                              0%                               11%

% of appeals modified down        25%                              3%                               14%

Extrapolating this information, we get some interesting thoughts. For one, the category of “dismissals” is not present in the 2008 statistics, nor are they counted amongst the “total actions” category. We have no idea why they would cease to be counted, as numerous cases are DWP’d every year, with an average of 205 per Arbitrator in 2007.

In 2007 and again in 2008, the Arbitrator that issued the most decisions issued well over twice as much as the average, while the Arbitrator issuing the least decisions had less than 40% of the average. The Arbitrator with the highest number of decisions was hearing and issuing more than 20 rulings each month; the Arbitrator issuing the least number of rulings was barely averaging 3 hearings each month! We also note in both years there were a significant amount of Arbitrators who were timely issuing their awards, within one to two months, with only a couple higher numbers in each year bringing up the average time to issue an award.

We note the change in breaking apart the statistics in 2008 into Chicago and Downstate indicated our Downstate Arbitrators appear to have their hands full in comparison to their Chicago counterparts, averaging 30 more trials and 450 more settlements per year.

In each year, an average of half of the cases tried were appealed. From a defense perspective, probably the most interesting fact this information presents is that it is more worthwhile you might have suspected to appeal awards. Over the course of the last two years, almost a fifth of all awards appealed were reversed or modified down.

As we have done in years past, we are seeking your vote for the three best and most effective Arbitrators in the state. We truly feel there are a number of truly devoted, hard-working and underpaid Arbitrators and they deserve kudos for their efforts. Please send us your nominees with as much specificity as possible.

If you have any thoughts or comments, we look forward to hearing them. Feel free to respond to ekeefe@keefe-law.com or post them later today on the blog at www.keefe-law.com/blog.

Editor’s comment: While looking up other things, we note a recent poll found the inflation rate for workers’ compensation drug costs, which had been slowing, has now increased 7.5 percent, driven upward by overuse of medication. Madison, Connecticut-based Health Strategy Associates’ (HSA) announced their findings after their Sixth Annual Survey of Prescription Drug Management in Workers’ Compensation. The firm said the increase follows five years of lower drug costs documented in previous surveys.

We also recently heard any number of claimant attorneys at the Illinois Workers Compensation Commission extolling how awful utilization review was because of their feeling such issues should be handled by the Commission. We want to advise them and anyone else who is listening, the Commission cannot possibly undertake to actually provide UR in an effective way. We feel it is almost an apples to oranges comparison. There are a number of reasons but here are just a few:

· The Arbitrators and Commissioners are lawyers and not doctors! We are unaware of any administrator with formal medical training;

· Most workers’ compensation claims aren’t litigated—the vast majority of utilization review implementation would be on non-litigated claims;

· UR has to occur on-demand when crucial medical care is needed; in contrast, it takes months or years to get a claim heard at the Commission.

Going back to rising drug costs, workers’ comp payers said the primary cost driver was over-utilization, citing such specific issues as the overuse of pain medications and physician prescribing patterns. To combat inflation, payers are increasing investments in analytics and moving towards step therapy and stronger clinical management of pharmacy. Concerns cited were per-unit cost increases, the predominance of single-source brands and the rebranding of the pain medication Oxycontin.

HSA said some poll respondents saw significant decreases in WC drug costs with four participants reporting drops of nine percent or more from their 2007 costs. Unlike previous years, drug cost inflation trended lower at smaller payers than their larger competitors.

For the fourth consecutive year, the survey was sponsored by Cypress Care, a national workers’ compensation pharmacy benefits manager, and its successor organization, Healthcare Solutions, Inc. Decision makers and operations staff from eighteen WC insurance carriers and third party administrators participated. Respondents’ 2008 drug expenses ranged from $1.2 million each to $148 million; Respondents’ cumulative drug spending totaled $810 million, 19.3 percent of the total workers’ comp drug spend.

A copy of the survey results will be available online after Jan. 15 at info@healthstrategyassoc.com. Please don’t hesitate to send your thoughts and comments.