Wisconsin’s Governor recently proposed significant changes to Wisconsin’s best-in-nation worker’s compensation system. For the second budget cycle in a row, the Governor’s Budget Bill wants to drastically change the structure of worker’s compensation cases.
The Budget Bill, revealed on February 8, 2017, proposes two main changes : (1) the elimination of court reporters in litigated worker’s compensation trials; and (2) the elimination of the independent body that reviews judge decisions.
A base level concern exists, again, because these proposals were made outside the stabilizing force of the Wisconsin Worker’s Compensation Advisory Council. As mentioned at length in this forum, the Advisory Council, with its balanced membership of labor and management representatives, has produced reasoned, incremental changes historically-creating a beneficial system for all stakeholders. Hopefully the Advisory Council will weigh in on the other potential effects of the unveiled Budget Bill proposals.
Each of the proposals significantly impact the state’s work comp system:
Elimination of Court Reporters:
The Budget proposes eliminating the use of statutorily-required stenographic court reporters in worker’s compensation trials. The specific proposal is to eliminate necessary court reporters (who ensure decorum in the court room, properly manage exhibits, make sure parties do not talk over each other, and create an accurate and legitimate transcript) in exchange for some type of ill-defined audio recording equipment.
Employers and carriers in our state-facing six to seven figure exposures-will have concerns about facing such liability based on questionable audio technology. Imagine if at a critical point in trial, a witness talks to softly or inaudibly, resulting in a blank area in the transcript. No stakeholder wants this, and our live court reporters ensure that it does not.
Also, the circuit court (and further appellate courts) want an accurate, undisputed transcript of the lower trial proceedings. If the audio is poor, unclear or inaccurate, we may be forced to re-litigate the trial. A redo will increase system costs. Further, if court reporters are eliminated, the private parties will bear the costs by hiring their own court reporters. We then may face disputes about the “real” transcript between the state’s audio recording (which will need to be transcribed for appeals) and the privately-hired court reporter transcript.
Wisconsin is not alone in its use of court reporters in worker’s compensation trials, as an informal poll revealed the use of court reporters in IN, PA, CT, IA, NC, MT, NE, WY, SC, CA, MA, GA, KS, IL, LA, NY, WA…and the list goes on.
Near universal opposition exists to this unnecessary proposal to eliminate live court reporters. The State Bar litigation section board voted unanimously to oppose this proposal. Moreover, all of the three main groups of attorneys that represent clients in worker’s compensation proceedings oppose this proposal. The Wisconsin Defense Counsel (defense attorneys), the Wisconsin Association of Justice (injured worker attorneys), and the Wisconsin Association of Workers’ Compensation Attorneys (bi-partisan group) jointly drafted a letter to the Governor voicing their opposition.
All parties to litigation want a fair and accurate depiction of the trial proceedings, and court reporters help secure that justice. This proposal faces stiff opposition.
Elimination of the Appeals Commission
Traditionally, the Labor and Industry Review Commission (LIRC) is an independent body of three political appointees that rule on worker’s compensation, unemployment, and equal rights appeals. The cases are litigated in front of administrative law judges and then the appeal is to LIRC, who have a virtual de novo review. The appeal from LIRC is direct to circuit court, which has a very deferential standard and will uphold the LIRC decision if there is any “credible and substantial evidence.” Barring a legal issue, the circuit court upholds the factual and credibility findings of LIRC.
LIRC has been in existence in some form since the inception of the worker’s compensation act in 1911. LIRC actually serves to define much of the worker’s compensation case law-for over one hundred years. When I look at our treatise, I’d guess 80% of the cited cases are LIRC cases. Judges use the LIRC decisions in making determinations.
The current Budget proposal is the complete elimination of LIRC. However, as opposed to a direct appeal from a judge determination to circuit court, the proposal is to substitute the Division Administrator for LIRC. Thus, litigants would trial cases to the administrative law judge, with an appeal to the state Division of Hearings and Appeals Administrator (currently Brian Hayes) as the intermediate level of appeal. Appeal from the Administrator’s decision would be to circuit court-with no apparent change in the standard of review by circuit court.
The upshot is to give much authority and discretion back to the actual administrative law judges-the ones who actually observed the witness and heard the evidence. One of the statutory proposals indicates that the “findings of fact” by the judge “shall, in the absence of fraud, be conclusive.” That appears to give even less discretion to the Administrator’s ability to review judge decisions.
There is much ambiguity about the reasoning behind these proposals, as well as the potential impact. I’ve already heard from a number of individuals that the proposal comes from issues within the unemployment insurance arena (and unemployment appeals fill up the majority of LIRC’s docket). If true, worker’s compensation appeals are being swept up with the issues within unemployment.
However, if implemented, the practical effects are drastic. Presumably, the Division Administrator would likely be more deferential to the sitting administrative law judges (i.e., approve more ALJ decisions) and probably produce a faster appeal turnaround time than the current LIRC process. The catch is that it remains unknown how the Adminstrator would handle the influx of worker’s compensation appeals. Would there need to be additional staff? (if so, budgetary costs need to be considered). If no new staff, the simple time constraints lead to the likelihood of rubberstamping judge determinations.
In the future though, the Administrator position changes. Future appointees could have their own political proclivities that could impact the system. Also, the proposal may have just eliminated 100 years of case law as guidance for future judicial determinations. The budget is devoid of what happens to the precedential value of past LIRC decisions.
Accordingly, further details really need to be revealed about the proposed plan before the stakeholders can weigh in.
One further item is known, based on the intersection of the two proposals. If the system eliminates LIRC and provides more deference to the underlying judge determination, the value of court reporters increases exponentially. If the judge factual determination is conclusive, a reviewing circuit court certainly wants an accurate, credible, and decipherable transript of those all-important findings.
We will explore the further Budget process and these proposals as they progress…
For further information:
The full statutory text of the Budget Bill (2017 Assembly Bill 64/ 2017 Senate Bill 30) can be found, with