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Legislative Memo

BILL:

S.835 (Morahan)

Support

SUBJECT:

Payment of claimant representation fees by carriers and employers in converted workers' compensation

 

DATE:

March 7, 2001

 

The Business Council of New York State, Inc. a statewide association of more than 4000 companies, chambers of commerce, and trade associations which employ more than one million individuals, has reviewed the aforementioned legislation and opposes its enactment.

This bill would require workers' compensation insurance carriers and self-insured employers to pay the representation costs of claimants who prevail in controverted cases.

New York employers, especially small and medium sized businesses, are continually struggling with the cost of wokers' compensation insurance. While rates have dropped in New York State, they are still running twenty percent higher than those in neighboring states. This legislation sets the stage for a financial crisis for many of these New York businesses.

The rights of claimants are well protected under current law relative to controversy. WCL Section 25 (2) (c) provides that penalty must be paid to the claimant if the employers controverts an award without just cause. Carriers and self-insured employers take very seriously the decision whether or not to controvert a claim. They are well aware of the difficulty and costs of controverting a claim. Current workers' compensation laws and regulations ensure that there must be a significant body of evidence available to successfully controvert. Further, there is no trend of employers or carriers frivolously controverting claims.

Under current law, all attorney fees are paid out of the award. We believe this to be a fair practice. This legislation would provide that all attorney fees would be paid, apart from and in addition to, the award amount by the carrier and self-insured employer. The Business Council of New York State, strongly opposes this legislation.