Workers' Compensation: valued added

Sunday, August 25, 2013

OK's True Cost Control Feature

Counsel fees are a critical element to workers' compensation claims. David DePaolo's recent blog post highlights how counsel fees motivate some claim strategies in Oklahoma where a 30% fee prevails. Today's post was shared by WorkCompCentral and comes from daviddepaolo.blogspot.com

Most of the attention Oklahoma's reform is getting in the work comp world is about opt-out.
But another minor provision of that law may be something more meaningful for traditional work comp systems to keep an eye on.

Oklahoma for some time has had a "value added" provision on its books for attorney fees.
In short, claimant attorneys fees are capped at 30%, but in the past that cap was available only if the employer admitted the claim, provided medical coverage and made a written settlement offer.
Under Senate Bill 1062 all that is required now is that the employer make a written settlement offer, then the claimant attorney fee is capped at 30% of the difference between what the settlement offer is, and what the award actually ends up being.

For instance, if an employer offers an injured worker a settlement of $10,000, the worker hires an attorney and obtains a $15,000 settlement, the claimant's attorney would only be entitled to attorney fees of up to 30% on the $5,000 difference between the two awards.

Because the law in the past required admitting liability and providing medical services, many employers deferred making settlement offers, thus prolonging case adjudication, ergo expense.
Since employers would have to admit the claim in order to invoke the cap on attorney fees, claimants' attorneys began adding additional body parts to increase the value of the case and make it more difficult for employers to admit the claim - employers were loath to admit to body parts that they...

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