Workers’ Compensation Outline
Part 1: The Nature and History of Workers’ Compensation
CHAPTER 1: BASIC FEATURES OF COMPENSATION
· Workers’ Compensation is a non-fault mechanism for providing cash-wage benefits and medical care to victims of work-connected injuries, and for placing the cost of these injuries ultimately on the consumer, through the medium of insurance, whose premiums are passed on in the cost of the product.
1.02 Typical Compensation Act Summarized
· The typical workers’ compensation act has these features.
a. An employee is automatically entitled to certain benefits whenever he or she suffers a “personal injury by accident arising out of and in the course of employment” or occupational disease;
b. Negligence and fault are largely immaterial,
c. Coverage is limited to persons having the status of employees.
d. Benefits include; wage-loss benefits, medical expenses, and rehabilitation expenses.
e. Employee gives up his or her common-law right to sue.
f. Right to sue third persons whose negligence caused the injury remains.
· However, subrogation will probably apply.
g. Administration is usually provided over by a commissioner.
2. Parties may appeal to administrative law judges.
3. Appeals Board
· Judicial review is constitutionally required because of due process.
1.03 Unique Character of the American System
· WV is one of a few exclusive fund states.
o State runs and sells the insurance to the exclusion of private insurers.
· Contrary to the European model, WC is a stand alone welfare program. Not part of regular welfare where taxes pay for it. Cost is instead case upon the consumers.
1.04 Compensation Contrasted with Tort
2. The Test of Liability: Worker Connection Versus Fault
· Was there a work-connected injury?
3. Underlying Social Philosophy
· The ultimate social philosophy behind compensation liability is belief in the wisdom of providing in the most efficient, most dignified, and most certain form, financial and medical benefits for the victims of work-connected injuries which an enlightened community would feel obliged to provide in any case in some less satisfactory form, and of allocating the burden of these payments to the most appropriate source of payment, the consumer of the product.
4. Significance of Difference in Defenses
5. Nature of Injuries and Elements of Damage Compensated
6. Amount of Compensation
7. Ownership of the Award
8. Significance of Insurance
· In summary: Tort litigation is an adversary contest to right a wrong between the contestants; workers’ compensation is a system, not a contest, to supply security to injured workers and distribute the cost to the consumers of the product.
1.05 American System Distinguished from Social Insurance
· WC is private.
· Self insured or privately insured.
· Decided upon by forms.
2. Private Character of the System
3. Allocation of Burden, and Relation of Hazard to Liability
4. Qualification for and Measure of Benefits
5. Retroactive Unilateral Employer Liability
CHAPTER 2: HISTORICAL DEVELOPMENT OF WORKERS’ COMPENSATION
2.01 Common-Law Background
· Under the Common Law, The Employer owed the Employee a duty of care.
a. Safe place to work.
b. Enough employees to do the work.
c. Warn of hazards.
d. Due care in establishing procedures.
· The above four duties have been incorporated in to safety codes.
· WV 21-3-1 incorporates the above 4 common law duties.
· Unholy Trinity of defenses.
o Priestly v. Fowler
a. Assumption if risk.
b. Fellow servant exception.
c. Contributory negligence.
· Some employers may elect to exempt themselves from the fund. Employees then have to use the common law rules to sue because of the exemption. 23-2-1.
o Five or fewer full-time employees in agricultural service.
o Casual employers.
§ Temporary work and it does not exceed three workers.
o Organized professional sports.
· Under 23-2-8, Deadbeat employers that do not subscribe to the WC fund can be sued under common law and the employer is stripped of his common law defenses. No Unholy Trinity.
· 23-2-5.g, emplo
In the course of employment
o Causal nexus
o Was the work a cause of claimant’s injury?
o Was there an employment risk?
The Five Lines of Interpretation of “Arising”
· Most courts in the past have interpreted “arising out of employment” to require a showing that the injury was caused by an increased risk to which claimant, as distinct from the general public, was subjected by the employment.
2. Peculiar-Risk Doctrine
· Rule: The claimant has to show that the source of the harm was in its nature peculiar to his occupation.
· In Robinson’s Case, a laborer froze his foot while working in the public square all night in very cold weather. The court said: “There is nothing to show that the employee was exposed to any greater risk of freezing his foot than the ordinary person engaged in outdoor work in cold weather.”
· This test is no longer used in the majority of jurisdictions. All but gone.
3. Increased-Risk Doctrine
· Rule: The employee must show that there was an increased quantity of risk that is qualitatively not peculiar to the employment.
· There must be something about the job that increases exposure.
· This is the general rule in most jurisdictions for most kinds of claims.
· WV is an increased risk state.
· WV Case: Archibald v. WC
o Both elements of compensibility formula must be satisfied
o Construction worker died after he drank his own water. Court held that there was an increased risk because he had to bring his own water.
· WV Case: Ware v. WC
o Ware had pre-existing condition. Fell because of the conditions
o Court used the increased risk and positional risk.
o Cady says that “you can always find and increased risk if you think about it.” (find a crack in the floor.)