Keeping an eye on workers’ comp legislation

The construction industry has seen significant shifts in legal matters over the years, driven by various factors like changes in regulations, advancements in technology, evolving project-delivery methods and shifting market dynamics.

More recently, legislative changes in the state of New York could signal how workers’ compensation cases move forward across the country and impact business owners in the space.

Legislative changes in the state of New York could signal how workers’ compensation cases move forward across the country and impact business owners in the space.

Overall, New York’s pioneering efforts in workers’ comp legislation have had a lasting national impact. Key aspects that have influenced other states include: no-fault compensation, statutory benefits schedule, employer liability limitations, exclusive remedy provision and administrative adjudication.

That said, owners, operators and executives in the New York construction space have begun to increasingly find themselves facing costly claims in favor of workers that, in years prior, carried a smaller dollar value and were largely viewed as inconsequential.

Drilling down

As explained by Rosanna Shamash, Supervising Partner, Jones Jones LLC, in a recent article for Construction Executive, drilling down into more recently enacted legislative changes, the following three modifications in the state of New York could signal increased difficulties for owners and operators across the U.S. construction industry:

Collateral estoppel on the outs:

With the recent passage of Senate Bill S9149, New York is aiming to do away with collateral estoppel – or the use of one court decision in another case. Under this measure, if a workers’ compensation defense attorney litigates a fraud finding in a case, an attorney would not be able to use that decision in any other case. Historically, attorneys would be able to pass that decision to their partners in the general liability space, negating the need for the general liability attorney to litigate the same issue.

To combat this change, construction executives should seek legal counsel that have relationships with and access to specialists such as doctors, investigators and more. While attorneys can no longer use a past court decision in their case, the cases are still tied, and teams can still collaborate. However, general liability teams will now have to relitigate a case from a workers’ compensation perspective.

Disqualification of workers’ benefits due to misrepresentation:

Where legislation like S9149 can open the doors to fraud, recently passed Section 114a can benefit employers and workers’ comp defense attorneys alike. Under Section 114a, employees can be disqualified from receiving workers’ comp benefits if an individual makes a material misrepresentation that causes them to receive benefits. Workers can either be penalized with a mandatory penalty in which a judge will disqualify a worker for a set period of time, or a discretionary penalty, which disqualifies a worker from all future indemnity benefits. Construction executives should take caution and be sure when making fraud claims – as they could be deemed uncredible if claims are raised too often.

Carrier rights to lien recovery:

In workers’ compensation, a lien is used by the insurance provider to recoup what it has paid out when a worker files a claim with a construction executive. In such instances, the insurance carrier will automatically pay for the injuries of a worker, regardless of fault. Carriers are given the right to lien recovery through Section 29. Meaning carriers can ask for compensation back if a third party is found negligent in the general liability matter.

Knowing the legalese

Ultimately, as Shamash further acknowledged in her piece, the best way for business owners in the construction industry to protect their businesses for the future is to gain as much understanding of changes in the legal landscape as possible, secure defense attorneys who know the construction space and take the necessary safety and risk-management steps to protect their businesses before an incident ever happens.