California: Study reveals high level of attorney involvement in comp system

There is a high level of attorney involvement in California's workers' compensation system, according to recently published data.

The California Workers' Compensation Institute study found that between 2000 and 2008, attorneys were involved in nearly 44 percent of all lost time claims and in more than 86 percent of claims involving permanent disabilities. The data also revealed that the level of attorney involvement varies significantly in different regions of the state, with some of the highest rates in the areas in and around the Los Angeles Basin.

For the study, the institute reviewed data from 620,215 closed and resolved indemnity claims with accident year 2000 to 2008 dates of injury, which together accounted for more than $17 billion in claim payments. Researchers found that 271,677 (43.8 percent) of those claims involved an applicant attorney, a defense attorney, or both. Total benefits paid on the attorney involvement claims costs averaged $55,593, which translated to $15.1 billion, or more than 88 percent of all benefits paid on the indemnity claims in the sample.

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Statewide, the report found that 43.8 percent of closed indemnity claims involved an attorney. As in past studies, researchers said litigation was most prevalent in Southern California, where 48.8 percent of all lost time cases involved an attorney, compared to 37.9 percent of similar cases in Northern California. Furthermore, since 2000, the institute found that more than 52 percent of the closed and resolved indemnity claims in Los Angeles and Orange counties involved attorneys, which was 8 percent above the statewide rate. The attorney involvement rate was also above the statewide level in Ventura/Santa Barbara/San Luis Obispo counties, and in the Inland Empire, though the study found that it was slightly below the statewide rate in San Diego/Imperial counties and the rest of Southern California.

In contrast, the attorney involvement rates throughout most of Northern California were well below those in the south and were also below the statewide rate. The CWCI study noted that the San Francisco Bay Area had among the lowest attorney involvement rates in the state, with attorneys used in just 36.5 percent of the indemnity claims in the Bay Area.

Limiting the analysis to only permanent disability claims, the study found attorneys were involved in 85.7 percent of claims statewide. Attorney involvement rates ranged from a low of 80.1 percent of the Bay Area permanent disability claims to 89.3 percent of the permanent disability claims in rural Butte/Sutter/Yuba counties, which ranked just ahead of Los Angeles County, where attorneys were present in 88.6 percent of the permanent disability cases.

Read more at the WorkersComp Forum homepage.

August 26, 2010

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