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Alabama and Mississippi – Bad Faith Case From Workers Comp Claim

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Alabama and Mississippi Bad Faith Springs From WC Claim 

Alabama and Mississippi had a bad faith case filed from a Workers Comp claim.

Picture Of Gavel Alabama and Mississippi In Judge Hand
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Adjusters are usually protected from any type of Workers Comp mistake or oversight.  The Exclusive Remedy doctrine has always protected other parties including employers, adjusters, and other insurance personnel from bad faith suits.

The Exclusive Remedy doctrine usually means that if an employee accepts workers comp benefits, then that is the only avenue of collection of benefits from his/her employer.  Every now and then a case makes it through and or around the WC courts or Industrial Commissions .

According to this article by Business Insurance (click here), an employee that was paid Workers Comp benefits in Mississippi  could also file a bad faith action.   The ruling said:

The “Mississippi Supreme Court recognized, under common law, that an injured worker may recover damages from a workers compensation insurer for an independent tort, outside the scope of the worker’s employment, when the insurer intentionally and in bad faith refuses to pay workers compensation to which the worker is entitled

The four elements that I saw from the ruling are:

Two Man Alabama and Mississippi Shake Hands
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  • The bad faith claim release was not part of the WC settlement
  • The US District Court in Mississippi said that Alabama was the proper jurisdiction
  • The employer was based in Alabama
  • Mississippi allows bad faith suits out of WC

The US District court  was overruled on their determination that only Alabama had jurisdiction as the employer was based in Alabama.     

The Court of Appeals applied the WALSH test for jurisdiction when overruling the US District Court.  There are more circumstances in the case.   It may be a good idea to follow the link provided to read the article.  

I will cover the WALSH jurisdiction test tomorrow. 

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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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