Workers Compensation

Question 1

Workers Comp - Historical Background

Answer 1

• both a rejection of tort (since provides reparation to victims in a different way) + impetus to expansion of strict tort doctrines
• initially challenged as unconstitutional takings of employer property without due process of the law

Question 2

Ives v. South Buffalo Railway Co.

Answer 2

• 1911, Court of Appeals of NY
• held NY workers’ comp statute unconstitutional b/c authorized taking of employer’s property w/o consent or fault (argues fault-based liability tied to due process)
• note that the opinion does not really do history justice though - liability w/o fault not entirely new (vicarious liability, ultrahazardous activity, etc.)

Question 3

Rationale for NY Workers’ Comp

Answer 3

• articulated in Ives
• notion that fault-based system economically unwise + unfair
• also wasteful + uncertain in operation
• also produces antagonism between employer + employee
• says characteristic risks of business should justly be placed on the employer, plus employer better able to bear the cost

Question 4

New York Central RR v. White

Answer 4

• SCOTUS, 1917

- after Ives, NY passed constitutional amendment allowing for workers’ comp-> SCOTUS then upheld under 14th Am

Question 5

NY Central RR - Reasoning Behind Workers’ Comp

Answer 5

• argues workers’ comp sets up adequate replacement for tort
• employee gets moderate compensation (though less than would get in negligence) for all injury, + certain and speedy remedy w/o difficulty + expense of proving negligence + $ of damages
• employer left w/o fault defense but gets assurance that recovery is limited
• societal benefit -> falls w/in NY’s police power
• concept of disregarding the proximate cause + looking to the employment itself as the true, more remote cause

Question 6

Workers’ Compensation - General Concept

Answer 6

• no-fault

- abolishes tort liability of employer to employee wrt accidental injuries “arising out of” employment

Question 7

Beauchamp v. Dow Chemical

Answer 7

• fact that employee has recovered under workers’ comp benefits doesn’t bar actions brought by family for loss of consortium

Question 8

Pratt v. Liberty Mutual Insurance Co.

Answer 8

• pl barred from bringing tort suit against employer under workers’ comp, but sued Liberty Mutual (responsible for providing workers’ comp to employer) for not noticing the potential for injury from repetitive lifting activities and recommending applicable safety features
• core issue is whether Liberty is open to liability on the basis that they undertook to conduct an active loss-prevention program + then did so negligently (ie. they advertised + billed themselves to employers as actively reducing risks, but then failed to catch pl’s injury)-> court says pl’s claim can proceed

Question 9

Workers’ Comp - Core Features

Answer 9

• broad coverage
• simplified process
• compensation limits
• insurance planning

Question 10

Workers Comp - Coverage

Answer 10

• avoids tertiary costs (no fault eval)
• positional risk doctrine
• broad circle around large class of accidental injuries w/o regard to fault
• requires employer to pay for accidental injury to worker arising out of + in course of employment

Question 11

Positional Risk Doctrine

Answer 11

• way of evaluating “arising out of” - concept that injury would not have occurred but for the fact that conditions + obligations of the employment placed pl in position where injured
• applied in Whetro and in Circle K Store v. Industrial Commission of AZ (case where employee fell + twisted ankle in parking lot after her shift ended)

Question 12

Whetro v. Awkerman

Answer 12

• 1970
• caretaker working at his employer’s house when tornado hit
• def argues b/c act of God, no causal connection between the act and the employment
• court basically holds not necessary to establish relationship of proximate causality between employment and injury in order to establish compensability

Question 13

Workers’ Comp - Simplified Process

Answer 13

• costs of claiming reduced by simplified substantive law + relaxed procedures in a case of contest (disputes resolved by state agency officials in relatively informal administrative fact-finding process)
• avoids tertiary costs

Question 14

Compensation Limits

Answer 14

• benefits limited
• generally full recovery for medical and rehabilitation expenses, but limited wage loss recovery and NO pain and suffering
• PROBLEM: means pl’s undercompensated compared to tort system

Question 15

Workers Comp - Wage Loss

Answer 15

Limited by two techniques:

• scale-down (only a certain percentage of lost earnings are compensated)
• maximum (award is subject to an upper limit)
• note that there is usually a set minimum as well

Question 16

Scheduled Injuries

Answer 16

• provision of set amounts of money for loss of specified limbs and organs

Question 17

Health Injuries

Answer 17

• lingering conundrum under workers’ comp

- difficult to determine if disease arose out of the employment or out of other circumstances (ex: genetics)

Question 18

Limits + Rationales

Answer 18

• compensation limits for nonfatal injuries
• activity-based reparations program, but limits rooted in other principles
• pain + suffering limits -> streamline claims
• scaling down wage loss -> incentive to return to work
• ceilings (high wage earners get less)-> principle of need
• choice - private insurance for more complete coverage available to higher earners

Question 19

What happens to background safety?

Answer 19

• slight issue, in the sense that b/c there’s mandatory insurance, it acts as a cushion (not as much background safety pressure)
• would expect larger firms to be safer b/c their rates are typically more tied to own experience, although in reality, even though small co’s pay industry rates, they are sometimes safe if small enough that everyone knows each other

Question 20

Experience-based Premium Rate

Answer 20

• merit rating
• assuming internalization, less safe firms would pay more + spread to consumer
• if price of all industries reflect relative safety rate, market will tend to channel towards safety
• note that alternative would be manual rates (more necessary for smaller actors, but wind up w/ less background pressure)

Question 21

National Vaccine Injury Act of 1986

Answer 21

• no-fault system for compensating those injured by childhood vaccines
• w/o this, opportunities for redress limited, time-consuming, expensive, + often unsuccessful
• financed through tax per dose on manufacturers
• ordinarily difficult to prove effects from vax -> advantaged of simplified plan, although downside to sharp attribution rules is that if kid gets sick outside time window can’t recover