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How Employers Can Reduce Permanency Awards In New Jersey At No Cost

By on August 3, 2017 in Awards with 0 Comments

Permanency awards in the New Jersey Division of Workers’ Compensation can amount to very significant dollars.  An award of 40% partial permanent disability at 2017 rates amounts to $114,720 – tax free.  Furthermore, the case can be reopened within two years from the last date of payment for further permanency benefits.  If the employee reopens the case and obtains another 10% hiking the 40% award to 50%, the employee will collect an additional $64,680, again tax free.  Usually the employee in New Jersey is back doing the same job but is eligible for a substantial permanency award because New Jersey (unlike Pennsylvania and New York) is not a state where proof of lost wages or earning capacity is required for permanency benefits.  Rather, it is a loss of physical function state.

Many clients have asked what kind of evidence and testimony does a Judge of Compensation focus on to decide the appropriate percentage of disability.  The answer is two-fold:  first the judge will review the objective medical studies, i.e., MRI, CT scan, EMG, surgery records along with the medical IMEs from the opposing experts.  Next, the judge will focus on the testimony of the claimant in court regarding the effect of the accident on his or her non-work activities or work activities. The claimant needs both to get an award.  Assuming that the employee is back to work doing the very same job, the focus will exclusively be on the non-work activities that the employee can or cannot do.

So this is where employers can help themselves immensely.  Consider that the testimony of the claimant in court may be that the employee can no longer play basketball, or go to the gym, or garden in a crouched position due to back pain even after surgery has occurred.  Those are significant complaints to most judges.  They are given at the time of settlement.  Defense lawyers and adjusters do not know if these complaints are accurate.  Suppose, however, the employer is well aware that the employee is still playing basketball and going to the gym, and suppose the employer has communicated that valuable information to the carrier/TPA and defense counsel? That information becomes crucial on cross examination of the petitioner by defense counsel.  It raises issues of credibility and sharply reduces the value of the case because an award of permanent disability must be supported by proof of a material impact on work or non-work activities.  Without that, no award can be entered.

Now consider an even greater service that employers can provide for themselves which will lead to enormous savings.  As I have already indicated, there must be testimony by the claimant about proof of a material impact on non-work activities – or in rare cases, work activities.  The comparison is between the employee’s level of activity before the accident and the level of activity at the time of the settlement.  The logic is the employee gets paid money because he or she used to be able to enjoy many things in life, and do many things, that he or she cannot do as a result of the accident. But how can employers establish the level of activity before the accident?  If that could be established, wouldn’t it make a huge difference in cases?  Yes it would, and it is easy to establish the level of activity before an accident.

Here’s the answer:  employers can establish the pre-accident level of activity by use of an employee accident form, signed and filled out entirely by the employee, which asks the employee, among other questions, what recreational or social activities the employee has engaged in during the past few years.  The form is also used to ask how the accident occurred, whether there were witnesses and other pertinent information.  This form costs nothing at all but can save untold amounts of money for employers in negotiations and at settlement.

Suppose Claimant James Smith has a back injury on January 1, 2016 and fills out an employee accident form right away.  To the question about prior recreational and social activities, the claimant says “No sports at all.  No gym activities. I only watch television.”  At the time of settlement in August 2017, in order to support a substantial award, the employee testifies that he can no longer lift weights in the gym, play basketball or do mountain biking.  Those are his three main complaints.  The defense attorney, armed with the employee accident form, successfully cross examines the employee on his statement in the employee accident form filled out by the employee himself at the time of the injury! The lawyer enters that document into evidence to prove that this employee did not even play sports, did not belong to a gym, did not lift weights, and just watched TV by his own admission.  Defense counsel has attacked the employee’s credibility and now withdraws the settlement offer, arguing under Perez v. Pantasote, that there is no proof of a substantial impact on non-work activities.  As noted above, no judge can approve a settlement no matter how much surgery has taken place without establishing a substantial impact on work or non-work activities.

These are winning techniques that quite literally cost nothing and take almost no time, and they can save enormous sums of money for employers.  Whether your company has a carrier, or a TPA, or is self-insured, the message is simple:  communicate the information your company has to your defense attorney and adjuster about activities that the employee is engaged in: hobbies, sports, gym memberships, and anything else along these lines.  And use employee accident forms.  The undersigned has a good one for Capehart clients.  Unfortunately, most defense attorneys enter negotiations without having any idea what sports or recreational activities an employee engaged in pre-accident or engages in post-accident.  The best and most useful information is almost always contained in the workplace itself through co-employees and supervisors, and that information, if extended to defense counsel, can completely change the outcome of any comp case to the benefit of the employer.

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John H. Geaney

About the Author

About the Author:

John H. Geaney, an executive committee member and shareholder with Capehart Scatchard, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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