Litigation costs and workers comp on the rise in California, says report

Litigation costs and workers comp on the rise in California, says report

 When will the worker’s compensation bubble in California burst? The latest reports suggest that fraudulent worker’s compensation claims are on the rise – not the greatest news for small businesses in California who must financially support these false claims through exorbitant insurance costs.

Here’s the scoop.

Financial reports that were released detailing the spiraling costs of workers compensation and litigation gave the Los Angeles Court a double financial whammy late last year. It was the first time in the fiscal year 2010-2011 that the county’s workers compensation payments touched an average of more than $ 1 million a day.

According to the Chief Executive Officer’s Risk Management Annual Report, the payments totaled to a sum of $374 million for the whole fiscal year. Meanwhile, according to the County Counsel’s Annual Litigation Cost Report, the litigation costs that include settlements, judgments and attorney fees, etc, rose by 14 percent, scaling $107 million.

The county has asked to investigate the matter and take corrective actions according to Supervisor Michael Antonovich.  He added that the county will vigorously scrutinize fraudulent claims and prosecute individuals found guilty of worker’s compensation fraud.

The money allocated for workers compensation funds are made out of the department’s operating costs, and thus, they have a direct impact on the organization as a whole. The chief Executive Officer’s report said, “If employees are not at work because of injuries sustained during the course of their employment, or if budget dollars are not available because they are being spent to pay medical bills or salary continuation for injured workers, or to pay the claims of third parties resulting from negligent acts or unsafe conditions, ultimately meeting the department’s service commitments to county clients will be impacted.”

For the year 2010-2011, the compensation payments made out were 5 % higher than the previous year and 10% higher than the year before that. The increase is due in part to the rise in the permanent disability and medical treatment costs, and partially by the increase in the number of claims reported by the probation department, the fire department and the Sheriff’s department.

The litigation also saw a rise in the costs in the year 2010-2011. The amounts paid for judgment and settlements increased by one-third.  Out of them, settlements alone rose by 60 percent.

Tired of hearing that worker’s compensation insurance costs are on the rise? We are too. Take action today and sign our petition to make a change in California worker’s comp reform.


Litigation costs and workers comp on the rise in California, says report