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Workers' Compensation - Bill Passed Allowing Attorney Fees on Temporary Issues

The following is an article I recently wrote for the August 2016 edition of Dicta by the Knoxville Bar Association.

An Attempt to Level the Playing Field? A recent bill allowing an award of attorney fees on temporary workers' compensation issues.

In 2013, Governor Bill Haslam signed into law the Tennessee Workers' Compensation Reform Act of 2013. Its provisions applied to accidental injuries occurring on or after July 1, 2014. As noted on one workers' compensation insurance website, "[t]his is the most significant, far-reaching revision of the workers compensation law in Tennessee since the original act was passed in 1919."[1] Some would say that is even a bit of an understatement! A very real consequence of the Reform Act, whether intentional or not, is that injured workers have been unable to find competent legal representation. Though I do not have statistics regarding the percentage of non-represented employees appearing before the Tennessee Bureau of Workers' Compensation ("TBWC"), I am confident that my anecdotal hunch is not overestimated.

Why did this occur? The Reform Act of 2013 had several provisions that singly and in combination prevented attorneys from taking most "new law" workers' compensation cases. Some of the provisions include:

  • More restrictive definition of accidental injuries, including repetitive trauma injuries;

  • Treating physician has been given a very special status in terms of opinions on causation, impairment rating, and restrictions;

  • The notion of vocational disability has almost disappeared completely;

  • For return to work cases, there is almost no question regarding the amount of money a claimant or injured worker is entitled to; and

  • The removal of liberal construction of the statute in favor of the injured employee.

    All of these factors combine to decrease or eliminate available workers' compensation benefits to an injured employee. Without a predictable and large enough pool of possible benefits, attorneys cannot represent most injured employees. Historically, attorneys could fight on behalf of injured workers for denied benefits (whether temporary or permanent) because the potential resulting settlement or verdict would be large enough that a 20% attorney fee could justify the necessary work on the entire claim. However, under the new law it is nearly impossible for an attorney to recover a sufficient fee on the backend of a successful case to justify all of the work involved. The result has been obvious and drastic. The regulatory scheme requires that all corporations be represented by counsel.[2] Most denied claims involve an unrepresented injured worker versus an experienced attorney representing the employer/insurance company. The playing field has been anything but level.

    The crisis of unrepresented injured workers being led to slaughter before the TBWC has not gone completely unnoticed. Enter SB No. 2582/HB 2416. Section 2 dealing with T.C.A. § 50-6-226 states in pertinent part:

SECTION 2. T.C.A. § 50-6-226(d), is amended by deleting the subsection in its entirety and substituting instead the following:

(d)(1) In addition to attorneys fees provided for in the section, the court of workers' compensation claims may award reasonable attorneys' fees and reasonable costs, including reasonable and necessary court reporter expenses and expert witness fees, for depositions and trials incurred when the employer:

(A) Fails to furnish appropriate medical, surgical, and dental treatment or care, medicine, medical and surgical supplies, crutches, artificial members, and other apparatus to an employee provided for in a settlement, expedited hearing order, compensation hearing order, or judgment under this chapter; or

(B) Wrongfully denies a claim by filing a timely notice of denial, or fails to timely initiate any of the benefits to which the employee is entitled under this chapter, including medical benefits under § 50-6-204 or temporary or permanent disability benefits under § 50-6-207, if the workers' compensation judge makes a finding that such benefits were owed at an expedited hearing or compensation hearing.

(2) Subdivision (d)(1)(B) shall apply to injuries that occur on or after July 1, 2016, but shall not apply to injuries that occur after June 30, 2018.

Will this amendment help level the playing field? Important questions remain about how effective the statute change will be in incentivizing competent counsel to wade back in the waters and represent injured workers. First, and foremost is the requirement that the workers' compensation judge find that there was a wrongful denial of benefits. There is no guidance as to what action or inaction defines a wrongful denial of benefits. Is this simply benefits were denied and the TNBWC determines the benefits were owed or is an element of bad faith required? It will take a number of cases to flesh out the statutory meaning of SB No. 2582/HB 2416 since the plain wording of the statute is arguably ambiguous.

There is also no guidance as to the amount of attorney fees that can or will be awarded by the TNBWC. Will rates be set by judicial discretion pursuant to Supreme Court guidance or by Administrative policies, rule, or regulation?

Lastly, the underlying fundamental changes discussed above that discouraged representation of injured workers are still present and may still prove to be too a high hurdle to overcome with this modest change. My sincere hope is that the pendulum swing has slowed and might start to swing back so that the grand bargain of workers' compensation now undermined will be honored and restored.


[1]www.travelers.com/iw-documents/claims/workers-compensation/tennessee.wc.reform.2013.pdf

[2] Tenn. Comp. R. & Regs. 0800-02-21-.05(2015).

If you need more information about a Social Security Disability/SSI, personal injury, EEOICPA, long or short-term disability, Railroad Retirement Board disability, or a workers compensation matter, please contact the Law Offices of Tony Farmer and John Dreiser for a free case evaluation. We can be reached at (865) 584-1211 or (800) 806-4611 or through our website.

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