Sunday, April 2, 2017

Tort Reform Winds and Workers' Compensation

Close observers of the workers’ compensation landscape will recall that Florida claimant attorneys have in recent years been arguing that the steady erosion of workers’ compensation benefits over the past few decades have essentially undone the quid pro quo of workers’ compensation benefits in exchange for tort remedies. A separate component of the argument contends that changes in tort law over the last few decades have resulted in the systematic undervaluation of workers’ compensation claims. At the beginning of the twentieth century, the employer negligence defenses of contributory negligence, assumption of the risk, and the fellow-servant rule frequently shut off workers’ workplace injury claims altogether. In modern times, however, a substantial majority of states have substituted comparative negligence for contributory negligence and assumption of the risk.  Comparative negligence does not automatically shut off a plaintiff’s claim if the plaintiff, too, was negligent.

Suppose a worker was injured in the workplace by a damaged tool. Somehow it is determined that both the worker and the employer were negligent (“careless”). The worker is deemed 30% negligent; the employer is deemed 70% negligent. The damages (however calculated) are a million dollars. Under early 20th century negligence law, the worker’s claim would have been completely shut off. But in the absence of workers’ compensation, 21st century negligence law, in a comparative negligence state, would in theory allow the worker a recovery of $700,000. Thus, the theory continues, the workers’ compensation for tort quid pro quo of an earlier era was premised on case values that were, in the aggregate, lower than comparable cases, if applying 21st century negligence law. The deal is therefore argued to be “bad,” and should perhaps be renegotiated, especially in the context of eroding benefit levels and coverage.

But does this argument work in reverse? Consider the dramatic tort reform bills that have been recently passed by the U.S. House of Representatives. Although substantively beyond the scope of this post, H.R. 985, the Fairness in Class Action Litigation Act, H.R. 725, the Innocent Party Protection Act, H.R. 720, the Lawsuit Abuse Reduction Act, and H.R. 1215, the Protecting Access to Care Act would almost certainly act in tandem to reduce the cost to defendants (including employer-defendants in the absence of a workers’ compensation regime) of negligence suits. Although the fate of the bills in the U.S. Senate cannot presently be known, one can easily imagine employers making the argument that the quid pro quo is no longer a good trade for them in light of a weakened tort regime.

Of course, as I have argued elsewhere, tort law should not be subject to legislative modification, willy-nilly: I value my property (remedy for dispossession of which is constitutionally-protected), but it is difficult for me to claim that I value it more than my right to a remedy against one who has physically injured me. Most American courts, however, continue to allow legislatures to make virtually any non-irrational modifications to injury remedies. As long as this continues, we will be reconsidering periodically and critically the acceptability of the quid pro quo.

Michael C. Duff

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