Among the en banc rulings of the WCAB this week was “In Re: Daniel Escamilla”.

Escamilla, appearing as a lien rep in various WCAB proceedings in Southern California, is noted to have engaged in a pattern of misleading statements and frivolous tactics. Despite having been sanctioned by various judges and even called before the WCAB itself for a commissioner’s conference, the
pattern is said to have continued.

The WCAB has directed Judge David Hettick “to receive evidence and arguments concerning the suspension or removal of Mr. Escamilla’s privilege to appear pursuant to Labor Code section 4907 and this Notice and to receive any mitigating or other relevant evidence he may have to offer. (Lab. Code, § 5309(b).)”

As the board notes, “Acting as a hearing representative and appearing before the Appeals Board and WCJs constitutes the performance of legal services. (Eagle Indemn. Co. v. Industrial Acc. Com. (Hernandez) (1933) 217
Cal. 244″

Quoting a 1980 case regarding one Louis Moran, the WCAB en banc Escamilla decision says:
“The State Bar Rules demarcate the sanctionable limits of advocacy and indicate how – what may at times be – conflicting duties to clients, opposing parties and the Board are to be reconciled. These rules also give an attorney or lay representative notice of what sort of conduct is required. By appearing as a lay representative he [Mr. Moran] is charged with accepting certain limitations on his advocacy.” (Moran, supra, 45 Cal.Comp.Cases at 525).

Yet, hearing reps are never certified or sworn in. There is no test they must pass.

In my years of experience in handling workers’ comp cases In Northern California, I’ve seen very few problems with hearing reps. Mostly hearing reps are used by lien claimants, and by and large they seem to conduct themselves well at the Oakland and San Francisco boards where I practice.

But if the proliferation of liens spreads from some Southland boards statewide we could see more fly by night lien reps and more problems.

Some self-insured employers use hearing reps to attend settlement conferences and handle walk-thru settlements. Some of these folks are very skillful and very productive.

And some law firms use hearing reps. Occasionally these are new admittees waiting for bar results, law students who are also working, graduates struggling to pass the bar, or office paralegals pinch-hitting for a busy attorney.

Could the WCAB tighten its procedures and regulate hearing reps more?
Undoubtedly. Hearing reps could be required to register, certify (or test) their familiarity with benefits and procedures, do CLE, file documents revealing their employer or compensation arrangement, etc etc..

But just as Jerry Brown has noted that not every human problem needs a legislative solution, perhaps not every problem needs a regulatory solution either.

What’s clear is that this WCAB is concerned about ethics and misbehavior at the board. They intend to move on egregious behavior in order to protect the integrity of the judicial process. We’ve seen that already with some high profile panel decisions involving attorney misrepresentations to the WCAB.

Here is a link to the Escamilla decision: … Daniel.pdf

Stay tuned.

Julius Young

I’ve been on the road the last couple of days, speaking as a guest lecturer at the California Workers’ Compensation & Risk Conference, held in Monarch Beach in Orange County.

The conference is primarily attended by insurer claims representatives, self insured administrators, and some defense attorneys. Speakers this year included WCAB Commissioners Ronnie Caplane and Al Moresi as well as the new Administrative Director of the Department of Industrial Relations, Rosa Moran.

Presenting on panels from the viewpoint of injured worker advocacy were myself (on Almaraz-Guzman issues and the Ogilvie decision) and Los Angeles attorney Barry Hinden.

While gone, the California Workers Compensation Appeals Board release 3 en banc decisions. I’ll be providing more commentary on those decisions in coming posts.

One decision dealt with claims of misconduct by a hearing representative who appears on behalf of lien claimants at workers’ comp proceedings. That’s In Re Daniel Escamilla, the text of which can be found here: … Daniel.pdf

Another dealt with timeframe technicalities where applicant attorneys and defense attorneys are “racing” to be first to request a QME panel. It’s a procedural case that addresses some uncertainties regarding how panel disputes are to be construed. The case is Tsegay Messele v. Pitco Foods, and the text can be found here: … /Messele_T

The most significant of the 3 is Elayne Valdez v.Warehouse Demo Services.
The WCAB had issued a prior en banc from which the applicant appealed.
The text of Valdez II is here: … ldez_E.pdf

Check back in the next couple of days for more in-depth commentary on these.

Julius Young

Some injured workers may assume that California’s Insurance Commissioner has a lot to do with workers’ comp benefits.

That’s actually not the case, as the Insurance Commissioner is not involved in administering the system, setting policy and procedures, or legislative matters.

Still, the Insurance Commissioner must weigh in periodically on rates, which is why hearings are held on rate “filings”. Although the rulings by the CDI are advisory only, they have political impact in that they get press and focus the attention of pundits and policymakers on trends in the system.

Tomorrow the California Department of Insurance will be holding a hearing in San Francisco on the WCIRB’s rate filing for 2012. Here is a link to summary of the filing:

The lengthy filing for 2012 advisory rates can be found here:

It’s good to know that consumer and worker advocate Dave Jones is running the California Department of Insurance. Jones is a friendly, bright and energetic new face on the political horizon in California.

In his limited time in office Jones has focused his energy on the healthcare arena, seeking to implement the Obama health reform. Jones has also focused on promoting legislation that would provide for some CDI regulation of health insurance rates. And he has backed a measure to give employers more rights to resolve disputes with insurers in California rather than other forums.

With all this in mind, I noted an article of interest in an insurance industry publication, headlined “Consumer-Friendly Dave Jones Rubs Some in Insurance Industry the Wrong Way” that does a capable job of summarizing some of the issues that have surfaced under Jones’ tenure other than workers’ comp:

Stay tuned.

Julius Young

Interested in following the upcoming Tuesday morning hearings on workers’ comp rates by the California Department of Insurance, but unable to get to San Francisco to attend in person?

The hearing may be very interesting as the WCIRB and the CDI shift from a former measure of workers’ comp rates to a new measure.

There’s a solution for those who can’t show up in person.

The Workers’ Comp Executive publication will be livestreaming coverage. The coverage is free for subscribers and available for a fee for non-subscribers.
Log on to for details.

It’s good to see the workers’ comp press expanding choices for those in the public who seek to follow these issues.

Julius Young

Thought that California workers’ comp rates were largely determined by claims costs?

If so, you are like most people. Year after year reports by the WCIRB (California Workers’ Compensation Insurance Rating Bureau) precede California Department of Insurance rate hearings on insurance carrier rates.

Indeed, next Tuesday September 27 Insurance Commissioner Dave Jones will be holding hearings in San Francisco on the latest WCIRB filing. In a report released this week the WCIRB said that rates actually charged by insurers are up 3% in 2011, from $2.31 per $100 of payroll in 2010 to $2.37 per $100 of payroll in the first half of 2011.

No one would argue that claims costs are irrelevant to the rate equation.

But a new study highlights another important factor in workers’ comp rates.

That factor is Wall Street.

The study, by UC Davis Professor of Public Health Sciences and UC Davis postdoctoral scholar Abhinav Bhushan (now at Mass General Hospital) is published in the September-October issue of Public Health Reports.

A UC Davis press release notes that:
“…the study shows that higher premiums are instead associated with decreases in the Dow Jones Industrial Average and interest rates on U.S. Treasury bonds.”
“Insurance companies appear to have been setting premiums according to their returns on the stock and bond markets, not according to the number of claims they have,” said J. Paul Leigh, UC Davis Professor of Public Health Sciences and senior author of the study. “They invest because they need a financial cushion to pay for claims and, if they lose, raise premiums to recoup their losses.”
“Understanding workers’ compensation trends is important so policymakers can establish regulations that protect workers and contain costs, said Leigh, who noted that, in 2009, between 3 million and 4 million cases of job-related injury or illness were recorded and costs to employers were close to $74 billion.”
“In conducting the study, Leigh and UC Davis postdoctoral scholar Abhinav Bhushan examined U.S. Bureau of Labor Statistics data on incidence rates for injuries and illnesses, along with data from the National Academy of Social Insurance on workers’ compensation costs (to employers) and benefits (to workers and medical providers) from 1973 through 2007. Beginning in 1992, the Bureau of Labor Statistics began identifying cases involving more than 30 days away from work, providing the study team with the opportunity to evaluate the impact of more severe work-related injuries and illnesses on premiums. That information was compared with Dow Jones Industrial Average indices and Treasury bond interest rates.
The researchers found that while premiums increased from 1992-2007, claims decreased 1 to 2 percent each year. Claims for serious illnesses and injuries varied, but decreased overall.”
“The team also discovered that for the entire 35-year timeframe of the study, rising premium rates were closely linked with the Dow Jones Industrial Average or Treasury bonds. As either the Dow or interest rates on Treasury bonds fell, premiums rose, and vice versa.”
“The association of premiums with the stock market and Treasury bonds was consistent and strong,” said Leigh. “Increasing premiums had nothing to do with the number of injured workers, who often are incorrectly blamed for increasing premiums for employers.”

The study was partly funded by the National Institute for Occupational Safety and Health.

As policymakers move forward, they would do well to remember that with rates it’s not necessarily all about the benefits and the claims.

It’s about Wall Street, too. Insurers invest premiums, so claims costs are but one component of the picture.

Stay tuned.

Julius Young