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Exclusive Remedy Doctrine – Two Views From Two States

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Two Views From Two States-Exclusive Remedy Doctrine

I received a note today on the Workers Compensation Exclusive Remedy Doctrine to ask if there are any recent updates. The last two that I have seen are from Connecticut and West Virginia.

Picture Of Supreme Court Exclusive Remedy Doctrine With Gavel
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A recent CT decision ruled that the Exclusive Remedy Doctrine should be held in place for Workers Comp cases. A correctional facility worker had sued ACE as the Third Party Administrator and the State of CT for breach of contract and unfair dealing when his psych benefits were determined to be palliative. ACE would not approve any more treatment.

The CT WC court ruled on a summary judgement citing the Exclusive Remedy Doctrine. When the plaintiff appealed, the Appellate Court also ruled for ACE citing the Exclusive Remedy Doctrine. Daniel D’Amico vs. ACE Financial Solutions Inc. et al. 

The Appellate Court’s decision is the type that will not spike the advisory rates set by NCCI. That decision saved the employers in CT millions in premiums.

Graphic Of Hands Heart Shape Exclusive Remedy Doctrine Sunset Background
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The other side of the coin is a decision that will indirectly affect West Virginia’s Workers Comp policyholders for possibly years to come. The case involved an issue of race and that the plaintiffs were denied the right to sue under the Human Rights Act if the Doctrine of Exclusive Remedy were to be followed. This decision sent shockwaves through the West Virginia insurance industry. While this is not a Workers Compensation case, the case could be used as a springboard for eroding the Doctrine in the future.

According to the June 25th issue of The Insurance Journal Southeast Edition. “The insurance industry was surprised by the decision, according to Jill Bentz, an attorney with Dinsmore & Shohl LLP in Charleston who is also president of the West Virginia Insurance Federation. She said insurers are concerned it will lead to an explosion of lawsuits and drive up insurance costs, as was happening before the Legislature enacted reforms in 2005.

Bentz said third-party suits were costing insurers in the state more than $160 million a year five years ago and discouraging other private insurers from entering the state. According to Bentz, in 2005 the Legislature eliminated private third-party causes of action from the courts, moving them instead under the jurisdiction of the state insurance commissioner.

Cupped Hands Exclusive Remedy Doctrine Presenting Dollars
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“Without a doubt the Legislature and Governor intended to prohibit these suits,” Bentz said, claiming the most recent court decision ignores this history. “Now five years later, we have an unraveling of that effort.”

Bentz said she expects insurers will seek a legislative remedy as they did in 2005.

My concern is that West Virginia already has a group of court decisions in the Workers Compensation area that have pierced the exclusive remedy veil. This case could easily be used as a basis to attempt to sue the Workers Comp carrier, TPA, or adjuster directly. Decisions such as these will never allow a free and open market in WV that Governor Manchin and Insurance Commissioner Cline have worked so hard to preserve. The legislative remedy may be the best method to prevent insurance carriers and TPA’s from starting to reduce or cease writing Workers Comp coverage in the state.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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