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The American Equity Underwriters, Inc. The American Equity Underwriters, Inc.
Longshore Insider
8 Reasons Employers Should Think Twice Before Taking a Longshore Claim to Court
Feb 3, 2020 - Will Scheffler, The American Equity Underwriters, Inc.

The optimal outcome for a workers’ compensation claim is the injured worker returning to his pre-injury employment. Fortunately, that outcome is achieved in most of the claims that we receive at AEU. These positive results are realized when:

  • Employers timely and fully report injuries while showing concern for their employees
  • The assigned claims specialist strives to get the injured worker the best possible care, builds a rapport with all parties through good communication, and works to find resolutions for issues that may arise along the way

Some disputes cannot be resolved absent a full claim settlement. Due to the inherent nature of a settlement, it’s nearly impossible for all parties to be 100% satisfied with the outcome. It’s been said (and disputed as to the origin) that a good compromise is when the parties are equally unhappy.

So, what happens if either of the parties are so unhappy with potential resolution that they are unwilling to enter into a settlement agreement? There are two options.

  1. Resolve the issue(s). For example, let’s say an injured worker has an accepted knee injury and is claiming that his back is also injured. The employer and carrier could accept the back as compensable, but with that comes an unknown amount of additional exposures: additional temporary compensation, additional medical benefits including surgery, and possible permanent restrictions.

     

  2. Bring the issues to trial and let an Administrative Law Judge (ALJ), and potentially appeal judges, rule on the issues. While this second option may seem attractive, it’s important to remember some key issues when trying a longshore claim in court.
    • The average cost to litigate a claim in front of an ALJ is $30,000.
    • The employer/carrier pays defense attorney fees, win or lose.
    • The employer/carrier pays claimant attorney fees should the claimant prevail on any issue.
    • Claimant attorney fees range from $275 to $575 per hour, depending on experience and geographical region.
    • If the claimant wins at any level, the award is immediately due. If the employer/carrier are successful in appealing the decision, it can be virtually impossible to recover monies.
    • Litigation often does not stop at the ALJ level; appeals can be made to the Benefits Review Board, U.S. Circuit Courts, and finally, the U.S. Supreme Court.
    • Each appeal adds to attorneys’ fees (for all parties) while exposure for unpaid benefits can build.
    • If the employer/carrier is denying benefits, there is a loss of involvement in the medical process.

 

There are claims that are clearly worth seeing through the litigation process. If an employer and its insurance carrier plan to try a longshore workers’ compensation claim, they need to understand the costs and the risks involved. Above all, it’s important to realize that the Longshore Act is designed and liberally construed to protect injured workers, not employers and carriers.


ABOUT THE AUTHOR

Will Scheffler joined The American Equity Underwriters, Inc. in 1998 and serves as Senior Vice President, Director of Claims. His insurance experience began in 1993 with FARA and continued with the ALMA branch (now AEU) in 1998. He has been a speaker at Loyola Law School’s Annual Longshore Conference, U.S. Department of Labor seminars, and ALMA conferences. Will is licensed as an adjuster in Maine, Alabama, and Louisiana and is a licensed Qualified Manager in California. He serves on the Advisory Board for Loyola’s Annual Longshore Conference. Will received his bachelor’s degree from Louisiana State University and earned the CPCU and AIC designations from The Institutes.

The opinions and comments expressed in this article are those of the authors and do not reflect the opinion of ALMA, AEU or AmWINS. None of ALMA, AEU, AmWINS or the authors are responsible for any inaccuracy of content or for any loss or damages incurred by any party as a result of reliance on information contained in this article. Content may not be published or reproduced without the written consent of the authors. Prior articles may not be updated for accuracy as pertinent information changes over time. The Longshore Insider is intended to provide general information about the industry and should not be construed as legal advice under any circumstances. For legal advice, please consult a licensed attorney.
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