California Applicant Attorneys Attack Workers’ Compensation Reforms

June 23, 2004

Applicant attorneys, who have been lining their pockets with profits by abusing California’s workers’ compensation system, do not want to see their gravy train end so they are working to undermine the recently enacted reforms any way they can, says the American Insurance Association (AIA). Today, applicant attorneys are continuing their public campaign against reform by staging protests outside workers’ compensation appeals board offices statewide.

“The attorneys who are protesting today claim to be trying to protect the interests of injured workers, but in reality they are only interested in protecting their pocketbooks,” said Ken Gibson, AIA vice president, western region. “Just as there is a glimmer of hope in California’s workers’ compensation market, the applicant attorneys want to sabotage implementation of the cost-saving reforms.”

“California is finally starting to show signs of a competitive insurance marketplace,” Gibson said. “Insurers are showing their faith in the market by actively reducing rates before the reforms are fully implemented with the cost savings in place. Many insurers are reducing their rates more than the State Compensation Insurance Fund – signaling that competition is returning to the market despite the attorneys’ efforts to undermine the reforms. Throughout the negotiations, applicant attorneys continually opposed the effort to fix California’s ailing system because they have been the system’s biggest beneficiaries.

“California has attempted to reform its workers’ compensation system before. Each time, cost savings that had been anticipated did not occur because of judicial decisions, legal challenges, unexpected consequences and regulatory mishaps. Once again applicant attorneys are doing everything they can to stop implementation of reform because the higher cost for others has garnered higher settlements for them.”

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