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Defense Perspective:
A 2012 Defense Wish List

By Michael McDonald, Esq.

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In this series, Michael G. McDonald, Esq. of the McDonald Law Corporation offers practical advice to WC lawyers and adjustors.

Wow, 2011 is already coming to an end. This has been an interesting year from a personal standpoint. My son, a captain in the U.S. Army, was stationed in Iraq. By the time this article is published, he will be home; safe and sound. This country has waged war for many years and much money has been spent in foreign countries.

At the same time, a war of sorts has been waged on the workers’ compensation system. For the past seven years, we have seen new, complex and confusing rules created to make the system simple and lawyer-free. Influenced by the medical lobby, a new rating schedule was introduced which reduced payments of permanent disability to many injured workers.

The Board and the courts have attempted to create a working system out of unclear and confusing laws and regulations during a time of severe budget restraints. Politics has played a major role in the present state of the system. Certain employer groups have the ear of the Legislature and push their agenda at the expense of other employers, carriers and workers. Certain worker groups and unions have pushed back and demanded higher benefit payments without concern for the costs of such demands.

Meanwhile, the Legislature is too busy spending money it does not have and providing stop-gap, short-term measures to kick the deficit down the road. The Legislature, having created the illusion of user funding, has found a new way to tax employers and illegally spend their money. Labor Code Section 62.5 mandates a special account to be used “for the administration of the workers’ compensation program.”

Employers pay into the system to fund judges, staff, etc., of the workers’ compensation system. That money has been diverted to the general fund and is used at the discretion of the politicos. Will anyone step up and file a lawsuit against this illegal act of the Legislature? Is there a back room deal in the halls of Sacramento which has created a détente to this situation? The WCAB offices are understaffed and the administration of our justice system is in disarray. The lack of judges and staff has affected timely hearings and decisions.

The judges do the best they can in a system which works against them. We have a new A.D. She has brought with her excellent personnel to ferret out problems with the system. However, the funding is a major issue and there is little our A.D. can do about it, since the system is very political.

Our system has the funding. Someone needs to step up and sue the State of California to prevent the theft of our funds. As I sit next to my natural gas-fueled fireplace and my dogs, I dream that this system can be better. My wish list for 2012:

  1. If the law actually means something, then either comply with LC 62.5 or repeal it. But, until it is repealed (on or after July 1, 2013), comply with it. Give our system the money paid by all employers and fund the workers’ compensation program.

  2. EAMS: Simplify the system. Make macros user friendly. Allow electronic signatures. Create consistent forms. For God’s sake, get us back to a three page settlement document.

  3. If there is a hearing, then amend Rule 10562 to require that ALL parties served with notice of hearing must appear at that hearing. Too often, lien claimants fail to attend hearings and slow down settlement of claims.

  4. Require lien claimants to provide to the defendant ALL evidence it plans to submit to the Board, prior to trial. Too often, we receive a general list of information which fails to list specific items. If defendants had the actual evidence, we would be in a better position to determine the validity of the lien.

  5. Some of my colleagues seek a reasonable lien statute of limitations. Five years seems like an inordinate amount of time to cut off a lien right. My personal beef concerns being the proverbial mind-reader. Requiring defendants to serve “potential” lien claimants with closing documents in order for the time limitations to apply seems absurd. I suggest a presumption that providers of services in our system are deemed to know the law regarding rights under the Labor Code. If they fail to file a timely lien, then they are out of luck in collecting on the debt before the WCAB.

  6. I have also heard discussions about creating a judicial oversight committee to ensure fair, impartial and consistent rulings from the bench. This could be extended to the application of the administrative rules. The goal would be to educate judges on the current status of the law. It seems that many judges use the “law” to justify their decisions rather than have the decisions determined by the law. This has created inconsistent rulings and additional litigation.

  7. I would like to see at least a proposed new disability schedule. The PD schedule takes up 94 pages in the Regulations. It is the cornerstone of our system. A new schedule has been held hostage for years. This has resulted in inconsistent decisions at the Board. As part of the rolling out of the new schedule, I suggest LC 4660 be reviewed and amended to clear up the Almaraz/Guzman and Ogilvie issues. Clear language is vital to ensure proper claims management and payment of benefits. The applicant and defense bars will seek to protect the interests of their clients. By providing clear language, perhaps the Legislature can really reduce litigation.

  8. Finally, I would like to comment on law as a profession. Classically, there were three professions, law, medicine and divinity. Each profession requires specialized training, education and ethics. My father, a top notch trial lawyer, ingrained in me that law is a profession, not just a business. I was extolled to act like a lawyer and provide learned advice to my clients. All attorneys need to heed this advice. Attorneys are now lumped in a category of “vendor” for our clients. We are an expense, which must be limited to the least possible cost. Why should we be treated any different from the medical profession? For years, I have seen doctors use injured workers as a conduit to funnel money into their pockets. Those workers have been guinea pigs to medical procedures not typically performed on the general population. As a result, the industry has attempted to curb those medical costs. I hope we, as attorneys, can raise the bar in terms of representing our clients. This requires limiting unnecessary costs or actions and practicing at a high level of law. We should not be categorized as a vendor. We should be above that label.

I wish all of you a Happy New Year.

Michael G. McDonald is the founder of McDonald Law Corporation in Concord, California and a Certified Specialist in Workers' Compensation Law, State Bar of California. He is a Director for the California Workers’ Compensation Defense Attorneys Association.

Michael G. McDonald, Esq.
McDonald Law Corporation
1800 Sutter Street, Suite 430
Concord, CA 94520-2563
Voice: (925) 363-4380
Fax: (925) 363-4352

Other locations: Sacramento, San Jose and Fresno www.mcdonaldlawcorp.com