COLA Set at 3%, So Long as Economy Claims Total Disability
If someone told me that the defendant in a workers’ compensation case was a Jaguar/Landrover dealership, I would expect a pretty awesome story leading up to an injury more to the soul at seeing a beautiful cars damaged rather than any physical impairment. It should include a high-speed chase, tuxedoes, martinis (shaken, not stirred), and some sort of threat to world peace. Or, as we in the Bay Area like to call it, “Thursday.” Well, if your mind works the way that your humble blogger’s does, you’ve got bigger problems than a boring blog post to read.
In the case of Richard Anderson v. Jaguar/Landrover of Ventura, sadly there were none of the things one hopes for. Instead, applicant sustained an admitted injury to his shoulder while working as a mechanic (no, not while fixing a car mid-air). Unfortunately, applicant sustained a stroke, leading defendant to offer to stipulate to a total loss of future earning capacity. However, defendant also argued that at least some of this new Total Permanent Disability should be apportioned to diabetes and other pre-existing factors, as articulated by the panel qualified medical evaluator, who apportioned 40% of applicant’s impairment to non-industrial factors.
The Workers’ Compensation Appeals Board actually rejected the PQMEs apportionment reasoning. Because the PQME apportioned 40% causation to the cause of the injury, to wit, the stroke, instead of the percentage of impairment, the apportionment opinion was not substantial evidence. Because no portion of the disability was apportioned to non-industrial or prior industrial causes, applicant was deemed TPD.
The panel then changed to a more interesting question – that of COLA (Cost Of Living Adjustment) and SAWW (State Average Weekly Wages). Life pensions awarded after January 1, 2003, are to be increased by the same rate as the increase in the state average weekly wage to reflect an increase in the cost of living. (See Labor Code section 4659(c)). Well, if applicant was to receive 2/3rd of his income at the time of his injury for the rest of his life, how is applicant’s attorney’s fee to be calculated?
The WCAB recognized that future SAWW increases are not known, and that expecting bountiful years cheats the applicant by giving too much to the attorney; expecting lean years cheats the applicant’s attorney should the years be not as lean as the pessimists expect. What is one to do in such a situation?
Your humble blogger’s various protests to compelled commutation aside, the WCAB rejected the DEU’s use of the average SAWW increases for the previous 50 years, instead opting to go with a 3% figure to reflect concerns of coming economic troubles. As the WCAB put it, “a 3% factor places more of the economic risk of hyperinflation upon the attorney, instead of upon the injured worker.”
This does make sense, given the fact that applicant’s award is based on the fact that he will never be able to earn an income again, whereas the attorney is likely able to earn a dollar or two in the years yet to come.
So, if you’re getting ready to settle a case, perhaps it won’t be too unreasonable to push for a 3% COLA increase in calculating applicant’s attorney fees.