A proposal has been introduced in the NJ Assembly formalizing an alternate dispute resolution (ADR) program for workers’ compensation. The proposal would allow the establishment of such a system through collective bargaining units and insurance carriers and group self-insurance plans.
Such programs have been utilized throughout the United States for decades and are commonly called “carve-out” programs. Labor and Industry have found them cost-effective and an expeditious manner of handling work related benefits. The cost of the NJ system, has been estimated at $1.8 Billion. The Star Ledger, in a series of articles entitled “Waiting in Pain,” highlighted the frustrations that have emerged because of delays encountered in the present system. The series focused on delays caused by multiple and fragment hearings.
The proposal has been introduced at a time when workers’ compensation systems and Industry as well as injured workers are seeking ways to reduce the spiraling costs of the administration of workers’ compensation and to enhance the delivery of benefits. Workers’ Compensation is struggling to reduce costs and employ environmentally friendly systems. The ADR program is an attempt to reduce costs and reduce environmental impact.
“Going Green” is a concept now being utilized by administrative and judicial systems throughout the country. One company, CourtCall®, utilizes telephonic conferences to avoid court appearances to help save the environment. Workers' Compensation claims in NJ require multiple appearances of the parties for both pre-trial conferences and hearings over extended periods of time.
Some reviewers have suggested elimination of the high cost of workers’ compensation program entirely as a value no longer justifying tort immunity. Instituting an ADR system, in a time of economic stress and increasing environmental costs associated with administration of a formal system, may offer an option to explore.
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