What Are Compensation Disputes?
Inadequate health and safety conditions at a workplace can lead to accidents resulting in personal injuries. A worker who suffered a personal injury due to a workplace accident has the right to claim compensation from an insurance company.
Typically, the law requires most employers to purchase insurance covering various costs resulting from workplace-related personal injuries, such as surgeries, drugs, lost wages, disabilities compensation, and funeral costs.
If the employer disagrees with the compensation claim, the dispute arises. The main issues the parties in compensation cases disagree about are premiums, benefits, liability, and work capacity decisions.
The parties to compensation disputes are the employee who suffered a personal injury at the workplace and an insurance carrier, represented by an attorney (claims adjuster).
The employer is not a party to a dispute because the insurance policy covers their financial interests. Nevertheless, they are interested in disputing the claim due to premium costs concerns, among other reasons.
Why do Employers Dispute Compensation Claims?
When an injured worker raises a compensation claim, employers are likely to reject it for different reasons.
Most frequently, employers are concerned about the premium costs. More compensation claims mean higher insurance premium costs. That is why many employers look for any reason to reject the claim, hoping to decrease the insurance coverage costs.
Furthermore, if an employer thinks that injuries are not in connection to work or not severe enough, they will seek ways to dispute it outright. Similarly, some injuries come from underlying health conditions or existing illnesses. An employer will reject the claim questioning the causal link between an injury and a workplace accident. On the other hand, a workplace accident may not require time off from work, which is another reason for rejecting the compensation claim. Also, employers can dispute the claim solely on the formal ground, such as failure to file a claim within a deadline or present the necessary evidence. Finally, there can be personal bias or dislike between the worker and the employer, causing the latter to dispute the claim.
The Common Ways of Workers Comp Dispute Resolution
Typical ways of resolving compensation disputes are litigation, arbitration, and mediation.
Litigation is a traditional court procedure. The disputed parties engage in an adversarial process, trying to win the case and defeat the opponent. Because of complex evidence rules (discovery, deposits, testimonies, closing arguments), litigation can be expensive and time-consuming. Due to its vindictive nature, litigation can never bring true reconciliation between the parties. One party is regularly dissatisfied with the outcome.
Arbitration bears much resemblance to litigation. Although an out-of-court method, its nature, and structure are much closer to traditional litigation than mediation. In litigation and arbitration, state-appointed judges or a panel of arbitrators issue a binding decision. The parties have no control over the process or the outcome of their dispute. Arbitration can also turn out costly for both parties.
Mediation is the most famous alternative dispute resolution method. It has countless advantages over litigation and arbitration. The process is highly informal, voluntary, and confidential, and the parties choose the mediator consensually by signing the mediation agreement. There are no strict rules, but the process usually goes through several typical stages. The mediator (a neutral third person) introduces themselves and presents the specifics of the process. After the introduction, each party can make opening statements. The parties then go to separate rooms, with the mediator going back and forth between session rooms. Talking confidentially with each of them and estimating the possibility of settlement is a central part of private sessions. After caucuses, the parties gather in a joint session to discuss the disputed issues openly. The parties negotiate by bringing offers and counteroffers, and the role of the mediator is to stay neutral and facilitate negotiations. If successful, the negotiations lead to settlement – a binding agreement enforceable in court. Most importantly, mediation offers more than financial compensation – it brings a genuine reconciliation between the parties. As a non-vindictive and amicable process, mediation is a win-win solution.
How to Prepare Your Case?
Regardless of the method you choose, there are many things you do to prepare for the dispute.
First, you should always be familiar with your case. Whether you mediate the dispute or file a lawsuit in court, you need to know the specifics of your claim. The date of the workplace accident is a starting point. Further, you need to know your temporary total disability (TTD) and temporary partial disability (TPD) rate. Knowing a permanent partial disability (PPD) rate is equally important. Being familiar with the specific numbers helps your mediator or a lawyer (if you opt for litigation) handle the process successfully.
Next, you need to prepare all supporting documents. Mediation is far more flexible than litigation, but you still have to prepare for the sessions and provide the mediator with enough facts. In litigation, you need to corroborate your claims with appropriate evidence. Bring supporting documents with you or require the opposite party to present them in the discovery.
If you choose mediation, determining your negotiation strategy is vital. Carefully craft offers and counteroffers you will bring during negotiations. In doing so, defining your best alternative to a negotiated agreement (BATNA) is crucial. That is the last offer you can accept or the lowest amount you are willing to receive to resolve the dispute. Aside from that, you need to approach negotiations positively and look at things from another perspective. That will help you understand their position, increasing the likelihood of settling.
Through the entire process (litigation, arbitration, or mediation), try to stay calm and patient. Compensation disputes are about overbridging the two opposite points of view. The employer is interested in paying less insurance coverage premiums and preventing false claims. On the other hand, workers seek to receive financial compensation and other benefits because of injuries they suffered at work. As mentioned, mediation provides both parties with more opportunities for reaching a mutually beneficial solution. In reaching that goal, parties must be willing to make concessions and adjust their initial positions. Flexibility and patience are crucial in getting satisfactory results.
Choosing the Right Compensation Expert
The first step on the journey of resolving your dispute is selecting the best compensation lawyer or mediator, depending on which method you choose.
Selecting the right professional can be time-consuming, but remember that the wrong choice in this initial phase can cost you success and render your efforts futile.
In choosing the best lawyer or mediator, go through lists of local experts using online search engines. Check professional associations and their members. Talk to your friends, other attornies and professionals. After narrowing your choice, interview each prospective candidate and ask them questions about their record, work style, and costs. Finally, make the decision and closely cooperate with your lawyer.