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The success of advocates to weave around initial rejection foretold the subsequent advent of New Deal and Great Society safety nets.

And the ongoing judicial review of national healthcare reform looks strikingly similar to events some hundred years ago. Here is history and precedent in insurance law mandating universal coverage via required universal payment.

Statistical engineering led not only to Henry Ford's automotive factories but also to actuarial solutions for social ills. Reformers militated for unemployment compensation, health insurance and old age pensions. Workers' comp was of particular interest given the country's relatively high work accident rate and the rise of giant industries. Workers' comp reform became the sharp point of the lance for these advocates.

To an ever-widening circle of politicians, reformers, and researchers, the tort approach to resolve work accident disputes was archaic. Finding fault for each injury no longer seemed feasible, useful or relevant. Some said that if employers could control production workers down to the minute, they could control accidents. One noted researcher argued that work accidents were not really accidents, but statistically inevitable.

On Sept.. 2, 1910, one day after New York state's new workers' comp system became effective, Earl Ives, a railroad switchman, sprained his ankle on the job near Buffalo. Had he been more careful in signaling to a train engineer, his accident might not have occurred. His employer seized on it as a test case for the new statute. Soon the entire state focused on Ives v. South Buffalo Railway.

In March, 1911, the highest court in New York, reversing two lower courts, ruled that the workers' comp statute was unconstitutional. Judge William Werner wrote the lead opinion. Conceding that the economic arguments for the statute were cogent, plausible and even sound, Werner wrote that the law violated a fundamental prohibition against redistributing wealth from the faultless to the faulty.

From the case law, Werner could have decided either for or against the statute. But what drove Werner's reasoning were cultural values. He magnified the responsibility of the self-reliant worker within his or her immediate sphere of influence. He chose, in effect, a narrative that made sense a generation before Ives' accident.

New York voters overrode Ives with a constitutional amendment in 1913. Other states responded by crafting legislative proposals meant to be challenge-proof.

The rapid and broad acceptance of the new system was mainly due to a new angle of vision on the individual at work. The cause of work accidents now was neither the worker nor the employer but industrial employment itself. The new mantra of a work accident "arising out of and in the course of employment" skirted the question of causality.

While the employer and worker had the means to control work accidents, work injury risk in an actuarial sense never went entirely away. How was compensation to be made predictable? By a near-universal no fault system, guaranteed by mandatory insurance.

PETER ROUSMANIERE is an expert on the workers' compensation industry.

April 1, 2011

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