Injured on the Job
California Seeks to Rehabilitate a Social Contract
By Nicholas M. Pace and Robert T. Reville
Nicholas Pace is a legal researcher with expertise in the areas of dispute resolution and workers' compensation. Robert Reville is director of the RAND Institute for Civil Justice.
For the past 90 years, the California workers' compensation system has striven to uphold an important social contract by which injured workers give up their rights to seek damages in a civil court of law in exchange for compensation that is both swift and certain. In theory, workers injured on the job can simply file a claim that triggers a no-fault, administrative process designed to provide a comprehensive package of benefits, including medical care, replacement of lost wages, and vocational rehabilitation. In cases where the worker and the employer disagree about the legitimacy, adequacy, or timing of such benefits, a system of workers' compensation courts exists to resolve any disputes as inexpensively, rapidly, and fairly as possible. Today, however, the swiftness and certitude of the dispute resolution process are in doubt, which thereby erodes a key element of this vital social contract.
About 20 percent of all workers' compensation claims filed in California end up in the workers' compensation courts in some way. Many of these cases are quickly resolved, either by settlement or by formal hearing, to the satisfaction of the parties involved and with minimal transaction costs. But in other instances, cases can sometimes plod through the system for years, require costly repeat appearances by legal counsel, and result in unpredictable outcomes. Legislators and others have repeatedly criticized this system for being ponderously slow, onerously expensive, and plagued by inconsistency.
We at the RAND Corporation conducted a top-to-bottom review of the California workers' compensation courts to gain a better understanding of the causes of delay, the reasons for the high costs, and the sources of procedural inconsistencies. Although we identified numerous sources of these problems, we found that many of them ultimately stem from decades of underfunding in the areas of staffing and technological improvements.
Staff shortages impede every aspect of court operations and every part of the litigation process. An outmoded computer system exacerbates these problems by requiring enormous duplication of data entry and offering very limited capacity for caseload management or effective calendaring. These problems lead to delays, increase the private costs of litigation, and create obstacles to reforming the contradictory rules that guide the courts across the state.
In addition to a large number of specific recommendations on policies and procedures, our study team has proposed three main recommendations:
- Provide realistic funding to fill every staff position authorized in 2001, assuming that demands on the workers' compensation system remain similar to 2001 levels.
- Implement a complete overhaul of the courts' technological infrastructure without reducing short-term staffing levels.
- Conduct a comprehensive review, refinement, and coordination of all procedural rules governing the workers' compensation dispute resolution process.
A Distinctive System of Justice
The process of delivering workers' compensation benefits—including medical care, replacement of lost wages, and vocational rehabilitation services—is usually automatic. In a minority of instances, though, disputes arise over issues such as whether an injury in fact occurred at work, whether medical treatment is necessary, and the extent to which an injury creates a long-term disability. All such disputes are resolved in a single forum: the Workers' Compensation Appeals Board (WCAB). Of the one million workers' compensation claims filed in California every year, roughly 200,000 end up at the WCAB.
About 180 trial judges across the state are at the heart of the dispute resolution system. The judges of the WCAB are actually employees of the state Division of Workers' Compensation (DWC), along with the clerks, secretaries, hearing reporters, and other support staff in the 25 local offices operated by the DWC.
Taken together, the WCAB and DWC are sometimes referred to as "The People's Court" because the litigant pool is so diverse and because the courts' procedures are so informal that workers often represent themselves. It is a distinctive system for dispute resolution: a high-volume tribunal that never uses juries, that operates under relatively relaxed rules of evidence, that requires judges to review and approve all proposed settlements, and that has exclusive jurisdiction over most work injury disputes in the state.
If a dispute cannot be resolved through negotiation, either party in the dispute can file a Declaration of Readiness to request a trial. Two events then occur, both of which have become fraught with delays. The first is the Mandatory Settlement Conference (MSC), which is designed to promote a settlement with judicial assistance. If a settlement cannot be reached at the MSC, a trial date must be set. State law requires the courts to hold the MSC within 30 days of the filing of a Declaration of Readiness and to hold any subsequent trial within 75 days of that same filing.
Figure 1 shows the average amount of time that cases have taken to get to conference and trial. Although the averages have improved over the past few years, the reason is primarily the decline in the number of cases from the peak numbers in the early 1990s. Even with such improvements, however, the average time that it takes to get to conferences and trials continues to be much longer than allowed by law.
Two Very Different Types of Delay
The causes of delays for conferences are quite different from the causes of delays for trials.
We found understaffing to be the most important factor behind the delays for conferences. Most key positions in the court system have been severely understaffed for years; but clerks, in particular, are in very short supply. Overall, DWC offices staff only about 70 percent of the authorized clerical-support positions because of insufficient funds for hiring, noncompetitive salaries, and high turnover rates (see Figure 2). Some offices have only half the authorized number of clerks on duty at any one time.
A chronic shortage of clerks creates a serious bottleneck in the system, because clerks are responsible for managing the physical casefile, for scheduling trials and other court events, for customer service support duties, and for data entry of information vital to managing the operations of the courts. Without adequate clerical support, an office cannot process the paperwork required for an MSC in a timely manner.
Therefore, we recommend that DWC administrators give top priority to hiring, training, and retaining clerks. Pay for clerks should be increased slightly to make it comparable with staff pay at other administrative law courts in the state. We also recommend that pay for the sole supervising clerk at each office be increased to match that of judges' secretaries, because lead clerks tend to leave their positions as soon as they find an opportunity for an intra-office promotion.
We found the actions of judges to be the most important factor behind the delays for trials. Although many trials may require only an hour or two of court testimony from witnesses, WCAB judges have to spend a considerable amount of additional time outside the courtroom reviewing medical reports and other evidence in the case, writing a detailed summary of the evidence, reaching a decision, writing an opinion to support the decision, and responding to any appeal (see Figure 3). Because each trial places great demands on a judge's time, the natural inclination is to avoid trials whenever possible.
To minimize the workload, a few judges either schedule their trial calendars too conservatively or grant continuances (rescheduled trial dates) too liberally. The bad habits of a few judges can clog the entire trial calendar for all other judges in any given office, because the other judges must shoulder the increased workload. With fewer scheduled trial dates, the parties who need someone to decide their competing claims must wait far longer than the 75 days allowed by law.
One way to get a case to trial faster would be to assign the trial to whichever judge has the earliest available trial date. At the moment, some offices lock in trial judge assignments the moment a Declaration of Readiness is filed, which reduces scheduling flexibility. Additionally, the responsibility for determining trial dates should rest with clerks, not judges. Local DWC offices should also overbook a limited number of extra trials for each judge, because many cases are settled before they reach trial. In the event of any conflicting demands on a judge's time, a "rollover" policy would allow overbooked trials to be quickly reassigned to an available judge on the scheduled day.
State law requires that a decision in each case be issued within 30 days of a trial, but some judges occasionally take as long as three months. Even among judges in the same office with similar workloads, there have been wide disparities in the time taken to render these decisions. Interviews with secretaries and hearing reporters who work with judges have suggested that some judges simply lack the organizational and timemanagement skills necessary for turning out a decision in a timely manner.
One of our most important recommendations is that judges need more training in how to perform their tasks. Although well-versed in case law, new judges often have little experience in efficient note-taking during testimony, promoting settlements between contentious parties, managing a crowded conference calendar, issuing decisions quickly and competently, and writing a well-reasoned opinion. WCAB judges need to be shown better ways to manage their caseloads and to execute their other responsibilities. We further suggest that the presiding judge at each local DWC office spend more time mentoring other judges, make greater efforts to monitor judicial performance, and look for good case-management skills among judicial candidates.
Unnecessary Litigation Costs
The permissive attitude of some judges in granting lastminute continuances or even removing a case from the trial calendar altogether not only delays the overall process toward resolution but also results in unnecessary court appearances. Each additional court date is costly for defendants (who pay their attorneys for each appearance), for workers' attorneys (who have limited time to devote to each case), and for workers (who must spend time away from their jobs whenever they appear in court).
Many of the additional appearances appear to be the result of parties arriving at the MSC unprepared to discuss the issues in the case in a meaningful way. This can often occur because there is no penalty for failing to review the casefile until the day of the conference and because last-minute postponements are easily obtained upon an oral motion made during the conference.
To combat this problem, requests for continuances and other postponements (other than those related to illnesses and emergencies) should be considered at the MSC only if such requests are formally made in writing and submitted in advance. This important change would force the parties to review the file and to jointly address potential roadblocks to resolution prior to the court appearance.
Inevitably, some continuances and postponements will be required, but no such requests should be granted without conditions. The parties should be given a specific date to return, the judge should detail the reasons for granting the request, and orders should be issued as to what must be done to get the case back on track. Judges should also stop granting requests for postponements on the day of trial in all but the most extraordinary circumstances.
Inconsistent court practices across the state are not surprising given that the rules and procedures are derived from a variety of sources, including the California Labor Code (developed by the state legislature) and separate sets of regulations developed by the WCAB and DWC. Because the rules are sometimes outdated, contradictory, vague, confusing, or convoluted, many local offices and judges invent their own procedures, creating a hodgepodge of largely unwritten local practices across the state.
The trial phase has numerous built-in safeguards that encourage uniformity in decisionmaking. But we found wide variation in judicial behavior prior to trial, including how judges handle continuances and postponements, what standards judges use to decide if proposed settlements comply with the law, and what criteria judges use to approve attorney fees. In most instances, the variation in behavior appears to stem from a lack of clear and unambiguous guidance in the rules that apply to these pre-trial actions.
In this regard, we recommend a coordinated effort by the WCAB and DWC to review the sources of the procedural rules; to eliminate or correct language that is irrelevant, vague, or confusing; to highlight the rules that are clear and straightforward; to provide supplemental commentary as guideposts in making decisions; and to revise the procedures accordingly. This review should also involve judges and attorneys to make sure that the new rules will work in practice.
Our study team investigated a wide variety of WCAB and DWC operations. The final report contains more than 100 recommendations covering calendaring, case management practices, staffing, technology, judicial assignment and training, continuances, settlements, and other critical stages in the process. But the main factor behind the problems of the so-called People's Court appears to be the chronic funding shortage that has hampered hiring, training, and technological improvements for decades.
Although funding shortages are certainly not the only underlying cause of dissatisfaction with the workers' compensation courts, year after year of scrambling to provide local offices with the bare minimum of staff has prevented the DWC administration from addressing long-term needs, most notably the long-overdue upgrade of the courts' information technology infrastructure. Conversely, the courts' computer system has made the staff shortages even more acute, because the outmoded system requires a great deal of duplicate data entry, is not suited for the most efficient scheduling of conferences and trials, and is so old that it offers little help as a management tool to allocate judicial resources more efficiently. Yet replacing the system has been impossible given the gaping holes in office staffing.
The staffing shortages have also made procedural uniformity more difficult to achieve. Some local offices, for example, have dispensed with any review of newly filed Declarations of Readiness. The purpose of these legally required reviews is to make sure that the case is indeed ready for an MSC. Some local offices, however, have come to believe that these procedures consume unjustifiable amounts of staff resources. In addition, plans for uniform training manuals have been on the back burner for years, because lead clerks and lead secretaries cannot be spared to draft the documents. Likewise, the current fiscal environment has made it extremely difficult to assign judges and administrators to the much-needed task of reviewing conflicting or ambiguous regulations.
Worst of all, insufficient staffing levels can diminish the quality of justice. Judges with heavy workloads may prefer to grant requests for continuances, however questionable they may be, rather than to move toward a trial that would require considerable expenditures of their time. When trials do take place, a careful and deliberate judicial review may not be possible because of other equally pressing demands. Meanwhile, presiding judges cannot supervise the work of their trial judges closely, because the presiding judges must handle a nearly equal share of the caseload. Staffing and funding shortages have precluded the training of trial judges as well. The end result is that there is sometimes great disparity in the knowledge and abilities of those who have been appointed to be the final arbiters in this system.
The WCAB has become a focus of attention for those who feel that the entire California workers' compensation system has strayed from its original purpose of delivering swift and certain benefits through a user-friendly dispute resolution system that serves the interests of injured workers, employers, and other litigants. If the courts continue to be plagued by unnecessary delays that frustrate injured workers and their employers, by unreasonable private and public litigation costs, and by unexpected outcomes due to idiosyncratic procedures, then the California workers' compensation system is in fact failing to serve its statutory and historical mandate. Our team's recommendations offer a blueprint for judicial and administrative reform that can help the system fulfill its mandate.