Compensation insurance is a system of laws and regulations that provide compensation for lost wages and medical expenses to workers injured at a workplace or suffering from occupational illness. Insurance is a state-mandated system to help workers cope with financial, psychological, and health challenges following workplace injuries. Worker’s compensation insurance ensures workplace safety and provides a healthy work environment.
In Florida, all employers with four or more full or part-time workers must provide compensation insurance. Construction companies must purchase coverage regardless of the number of employees.
Compensation disputes arise from injuries that occur as a consequence of a workplace accident. They usually involve issues regarding the causal relationship to work, the ability to continue working, payment for being out of work, the right to treatment, the right to obtain doctors in a particular specialty, impairment benefits for permanent impairment, permanent total disability, and allegations of misrepresentation or fraudulent behavior.
The parties in a compensation dispute are an injured worker as a claimant, the employer, and the insurance company for the employer. The employer and the insurance company usually have an adjuster and an attorney on their behalf (representing both of them). The employer does not usually participate directly because the compensation insurance company covers their financial interests. In this way, an injured worker is usually not suing their employer outright.
Although not obligatory, the worker should hire an experienced attorney in most disputes. Choose a lawyer knowledgeable about various compensation insurance laws, legal procedures, and rules.
The insurance carrier and the injured worker are interested in resolving these disputes timely and cost-effectively. That is why they often seek resolution mechanisms other than traditional court litigation. In most cases, alternative dispute resolution methods such as mediation and arbitration are the most suitable solution. Some jurisdictions recommend (or even mandate) mediation and arbitration before bringing the issue to the compensation court. Florida requires mediation after filing every claim in a compensation case.
It is also crucial to understand that an injured worker cannot obtain a lump sum payment for their injuries except through settling the claim, and mediation can facilitate such an outcome.
Mediation is an effective and mutually beneficial method of settling compensation disputes. In contrast to litigation (often lasting years), meditation offers the parties the opportunity to resolve their conflict quickly, even in a matter of a few months or even weeks.
As an informal and flexible process, mediation involves presenting claims to a neutral third person. The mediator is chosen voluntarily by agreement of the parties or by the court if the parties can not agree. It is usually a retired judge or an attorney experienced in compensation claims.
Regardless of the informal nature of the mediation procedure, the workers and their attorneys should show up prepared for the session. The worker should be clear about his compensation claim, so that mediator can easily facilitate the negotiations and foster a settlement to which both parties agree. That includes calculating amounts of unpaid medical bills and wage loss benefits. Supporting the claim with copies of medical bills and other evidence is also vital.
An experienced attorney will help determine the best time for initiating the mediation in a compensation claim, but the court will set a deadline by which mediation must occur. While the state court system offers state-hired mediators, most parties prefer to hire private mediators, and Florida law requires the insurance carrier to cover the cost of mediation. Therefore, there is no additional cost to the injured worker to hire an experienced private mediator.
The process has four stages: introduction, opening statements, and private and joint sessions. In the introduction stage, the mediator introduces themselves and gives their credentials, explaining the procedure to the parties. After that, the parties can offer opening remarks outlining their arguments. Following the introduction and opening statements, parties go to a separate room for private talks with the mediator (caucuses). The mediator goes back and forth between session rooms, evaluating arguments. The mediator must keep confidential the details of private talks.
After a private session, the parties and their attorneys sit at a negotiation table in a joint session. The mediator conducts the session, facilitating negotiations – without giving legal advice or proposing solutions. The parties bring offers and counteroffers, trying to reach an agreement.
Hence, through a series of talks with each side separately, the parties can present their positions regarding the dispute. That enables the mediator to estimate the possibility of settling and then hold joint sessions, attempting to find common ground that leads to an agreement (binding for both parties).
It is important to note that when the claimant does not have an attorney, the insurance carrier is not permitted to have an attorney present at the mediation. Because of this, it may be more complicated to reach an agreement.
Before entering mediation sessions, an injured worker needs to know as much information regarding his case as possible. First, the worker must know the date of a workplace accident and calculate their lost wages and the costs of medical bills. Next, knowing their temporary total disability (TTD) rate and temporary partial disability (TPD) rate, as well as permanent partial disability (PPD) rating is vital. That includes how many weeks the claimant received the payments and the remaining weeks for payment. Under Florida law, employers must pay temporary disability checks for a maximum of two years. In the case of total disability injury, an employee cannot perform tasks, while TPD injury renders partial disability, diminishing their work capacity. Depending on the earning ability, the amount of the benefits can vary. Knowing the facts of your case is vital because it enables the mediator to estimate the possibility of settlement and conduct the sessions accordingly.
Next, always appear at mediation sessions with supporting materials. Prepare your opening statement, detailing your arguments using concise sentences and accurate factual information. During negotiations, keep relevant documentation at hand so you can easily support your claims with precise numbers. Never rely on your memory.
The central part of the mediation process occurs during the joint session. The parties negotiate the dispute bringing offers and counteroffers. Negotiation strategy determines the outcome of mediation, so each party should prepare, defining the framework within which they can bargain. Determining your BATNA (Best Alternative To a Negotiated Agreement) is vital for any negotiation effort. You should be clear about the second outcome you are willing to accept to save negotiations. In compensation cases, BATNA is the compensation amount an injured worker wants to receive instead of the initially desired amount. BATNA is your second-best option. In addition, the worst alternative to a negotiated agreement (WATNA) is your worst-case scenario. That is the amount of compensation you cannot accept. Knowing your WATNA defines the outer boundaries of the negotiation process. If (during negotiations) you realize the other party proposes solutions out of your pre-defined borders of acceptable settlement – you should prepare for trial.
Finally, preparing for mediation sessions includes positive thinking and a flexible mind. Always come to sessions with positive expectations, keeping different points of view in mind. That way, you will be able to understand their perspective and underlying motivations.
Arbitration is another alternative dispute resolution method that is highly effective in resolving compensation claims. Unlike court litigation, there is no judge or jury in arbitration. Workers present compensation claims to a neutral arbitrator (the so-called private judge) chosen by the parties. In most cases, the arbitrators are knowledgeable attorneys or experienced, retired judges.
There are several types of arbitration, including voluntary and mandatory arbitration, binding and non-binding arbitration, and institutional and ad hoc arbitration.
Voluntary and Mandatory Arbitration. Most parties include an arbitration clause in their contract, voluntarily agreeing to resolve a potential dispute using arbitration. In insurance cases, arbitration is mandatory. That means an insurance contract contains clauses related to resolving the conflict in arbitration. The insurance carrier appoints the arbitrator in advance, which the other party has to accept if they choose to sign the contract.
Binding and Non-binding Arbitration. Binding arbitration refers to situations in which the arbitration decision is mandatory. The ruling has the same legal effect as a court judgment, meaning the parties cannot choose not to enforce it. Contrary to that, a non-binding decision is advisory. Each party can reject it and go to trial.
Institutional Arbitration. Institutional arbitration refers to institutions (typically within a government) that appoint arbitrators, conduct the process, and perform case management tasks. Institutional arbitration also adopts its own rules of procedure and has its lists of arbitrators.
Ad Hoc Arbitration. Ad hoc arbitration is the opposite of institutional arbitration. It involves the cases in which parties decide to resolve a specific dispute in arbitration. They have to set up the rules of procedure for that particular case, including appointing the arbitrator.
Florida law (the Statutes, Chapter 682) gives the advantage to voluntary binding mediation, meaning the parties can voluntarily include an arbitration clause in their contract, agreeing to resolve their potential dispute in arbitration. Both parties agree to accept the arbitration ruling and enforce it as a court judgment.
There are six main stages of arbitration:
The arbitration ruling is mandatory and enforceable in the same way as court judgments.
Arbitration is less formal than litigation. There are no strict rules of evidence like in a court trial. The arbitrator can even resolve the dispute based on his sense of fairness, regardless of any procedure. That enables the parties to resolve the workplace compensation dispute timely and cost-effectively.
Both mediation and arbitration are informal, confidential, and far less expensive than litigation. For these reasons, mediation and arbitration are crucial mechanisms for resolving compensation claims related to workplace accidents.
The Mediation Group team comprises certified mediators and arbitrators from various professional backgrounds.
In our decades-long practice, we have established a reputation of success in resolving workplace compensation disputes out-of-court.
Contact us today to schedule your appointment.