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What would life be like without the Workers’ Compensation Appeals Board in Pennsylvania? Less workers’ comp litigation. Or would there be? A bicameral research agency of the state Legislature has recommended disbanding the administrative review board as a ticket to reducing the expense of workers’ comp litigation statewide. “Eliminating the appeal board could reduce litigation expense because many workers who may be willing to file an appeal with the Workers’Compensation Appeal Board would not be willing to incur the costs of appealing to Commonwealth Court,” the report by the legislative budget and finance committee’s staff says. The suggestion was among several in a study published earlier this month comparing costs in Pennsylvania’s workers’comp system with those of other states. The state House in June had asked the bicameral committee, comprised of six Republicans and six Democrats, to recommend ways to trim unnecessary workers’comp costs associated with, among other factors, litigation and adjudication procedures. The committee’s staffers took on the task. Their evaluations and audits often precede the drafting of legislation in the General Assembly, but the report’s recommendations are currently not included in reform legislation pending in the House of Representatives. Those bills concentrate more on the means of reducing workers’ compensation, and indemnity and medical costs. REDUCING LITIGATION According to the report, Pennsylvania ranks smack in the middle of most categories of the cost analysis, prompting some attorneys to question whether the system needs the changes the report describes. “I don’t know if there’s anything in this report that really cries out for change,” said Jerry M. LeHocky, a claimants attorney at Martin Banks Pond LeHocky & Wilson. Nevertheless, the researchers concluded that the accrual of some costs in Pennsylvania could be avoided by reducing or avoiding the involvement of attorneys, and by cutting down on multiple hearings in a single case. “The easiest way to reduce costs is to never get to the point where a worker needs an attorney — pay the workers directly and promptly, and there’s really no reason to get an attorney involved,”said Philip Durgin, executive director of the committee. “It’s just a very litigious atmosphere.” Durgin’s staffers recommended establishing an ombudsman program that would give employers and claimants a knowledgeable “neutral”individual to call on for advice — instead of an attorney. The report also suggested requiring parties to participate in a mediation session before a formal hearing is held, and proposed reducing attorney fees, which are generally capped at 20 percent in Pennsylvania. Durgin said reducing attorney fees would give attorneys less incentive for drawing out the hearings process by establishing their cases over multiple hearing sessions. Michael Dryden, a past chair of the Philadelphia Bar Association’s workers’ compensation section, found fault with some of the recommendations. “How do you know the ombudsman is going to be fair and neutral?” asked Dryden, a claimants attorney at Willig Williams & Davidson. Insurance companies are always going to have lawyers representing them. Claimants should too, he said. Daniel DiLoretto, a defense attorney at Harvey Pennington, worried that fewer of his colleagues would take on claimants cases if fees went below the standard 20 percent contingency fee. “Twenty percent is a fair fee,” DiLoretto said. “Workers’comp cases are just as difficult to litigate as civil cases,”in which litigators’ fees are a larger cut of an award. DiLoretto also spoke in favor of keeping the Supersedeas Fund, which the report proposed eliminating in part because it’s being used less now than in previous years. The fund was created by the Legislature to reimburse employers and insurers for benefits paid to a worker from the time a judge denies a request to suspend the benefits until the insurer or employer prevails in reducing or stopping the benefits. But DiLoretto said the fund serves an important function — that of protecting workers by providing a way for employers to recoup the benefits they paid out if a judge or board ultimately determines the employee shouldn’t have received benefits. And mandatory mediation is a great idea, DiLoretto said. “The problem is you don’t always have all the evidence in time.” According to the report, the model state for workers’ comp, Wisconsin, has low litigation rates attributed in part to the use of various alternative dispute resolution processes to reduce the number of formal hearings, including settlement conferences with workers’ comp judges, informal mediation and using a “tie-breaker” doctor when two or more doctors disagree on a medical issue affecting a claim. Currently, mediation is optional in Pennsylvania in most cases. Notably, appeals from the Workers’ Compensation Appeal Board comprised more than two-thirds of the cases mediated at the Commonwealth Court in 2004, and three-quarters of the court’s successful mediations, according to G. Ronald Darlington, the court’s executive administrator. Darlington said it’s sometimes easier for the lawyers and judges to work out a settlement in workers’ comp cases because it’s easier to assign a value to them at the appellate level. DISBANDING THE BOARD? Pennsylvania and 35 other states have an administrative appeals board like the 15-member Workers’ Compensation Appeals Board for the reviewing of decisions made by workers’ comp judges in Pennsylvania. Staffers of the legislative budget and finance committee reasoned that doing away with the WCAB would discourage frivolous appeals by making it more expensive to appeal a workers’ comp judge’s decision, Durgin said. “It may just be too easy to make an appeal to the Workers’Compensation Appeal Board,” Durgin said. “Right now, it doesn’t cost anything for anybody, except it takes a little more time.” The report did not estimate how much money would be saved. “I think it was something they threw out there to see where it would go and what kind of buzz it would create,” said LeHocky, who chairs the workers’comp section of the Pennsylvania Trial Lawyers Association. “It may be that once you investigate [the proposal] further, it may be it just shifts the costs elsewhere.” DiLoretto said eliminating the WCAB would put claimants and employers with legitimate appeals in a tighter and pricier spot. “If I believe a workers’ comp judge made an error of law, then I have to appeal it,” he said. “It’s my responsibility.” The WCAB charges no filing fee and requires only three copies of legal briefs from the parties. The Commonwealth Court charges a $60 filing fee, requires 15 copies of legal briefs and four copies of the reproduced record. The cost of duplicating everything for Commonwealth Court can run upward of $500, attorneys said. The WCAB handles about 3,400 appeals a year. Commonwealth Court President Judge James Gardner Colins joked that he would retire were the WCAB eliminated. “There’s no way we could handle all that,” he said. In 2004, parties appealed 679 of the WCAB’s decisions to Commonwealth Court. The court issued 436 opinions in workers’ comp cases. Workers’comp appeals were the most the Commonwealth Court received from a single state administrative agency in 2004 — as was the situation during the two prior years, according to court statistics. Susan M. McDermott, chairwoman of the WCAB, referred a request for comment to the state Department of Labor and Industry press office. Barry Ciccocioppo, spokesman for the department, noted that doing away with the WCAB would cause further, unnecessary delays in the appeals process by delaying case decisions. The WCAB takes months to issue a decision on an appeal. Attorneys estimated it could take the Commonwealth Court more than a year to decide a workers’comp case were it to take on the WCAB’s inventory. Overall, the court had 3,334 cases pending at the close of 2004. “The appeals board is that safety valve that weeds out a lot of trash before it gets to Commonwealth Court,” DiLoretto said. “If you’re representing an injured worker, you can’t wait that long for a decision.” Colins had a recommendation of his own for the Legislature. Instead of doing away with the WCAB, change the makeup of its commissioners, he said. The board commissioners, who are currently appointed by the governor and come from a variety of insurance, law and labor backgrounds, should be appointed on their merits, Colins said. Senior workers’ comp judges would be ideal candidates for the positions because of their vast experience, he said. With the change in board membership, Colins would like to see appeals to the Commonwealth Court in workers’ comp matters become discretionary. IN LEGISLATORS’ HANDS Reforms like cutting out the WCAB would require the Legislature to amend the state Workers’ Compensation Act. As of yet, none of the recommendations in the legislative committee on budget and finance’s report have been incorporated into workers’comp reform bills in the House, legislators and their aides said. “We’re not doing anything with it at the present moment,”said Barbara Dysard, administrative assistant to the majority chair of the labor relations committee, state Rep. Bob Allen, R-Schuylkill. However, a member of the labor relations committee, state Rep. T. Mark Mustio, R-Allegheny, said he liked several of the report’s recommendations and hoped legislators would be proactive on the issue. “I would hope that we would act on some of the recommendations,” Mustio said. The committee next meets March 15.

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