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Crackpot Proposal – Requiring Applicants to Sign Settlement Offer Rejections

Brace yourselves, dear readers — it’s time for another rant.

The way this whole workers’ comp thing works, when everyone is represented, is that an offer is made to the injured worker’s attorney, who is ethically bound (See State Bar Rule 3-510) to communicate it in full to his or her client promptly, and then the same attorney communicates the response (accept, reject, counter).

On several occasions, the rejection of an offer has left your humble blogger, and his client, puzzled.  So puzzled, in fact, that the defense might wonder if the offer was ever communicated to the client.  Now, your humble blogger knows that the vast majority of attorneys practicing applicant’s workers’ compensation, at least the ones he has met and worked with, abide by their ethical duties.  That being said, there are attorneys out there, both applicant and defense, that may bend the rules a bit.

Sometimes it might be justified (internally) by deciding the client is not in the right state of mind to make significant, long-term decisions, and that the attorney needs to step in and decide things for the best interest of his clients.  But, even then, it is easy for a more cynical person to suspect that while a settlement offer might help the injured worker, it does not help the injured worker’s attorney enough.

To that end, sometimes adjusters might consider asking defense attorneys to write directly to the injured worker or to send a settlement offer and a copy to the injured worker too, just to make sure that the injured worker is actually receiving the settlement demand.  The problem with this is, of course, that the State Bar of California expressly prohibits an attorney from communicating with a represented party.  (See State Bar Rule 2-100).

I strongly urge the defense community to abide by these rules.  For the defense attorneys, the thing at stake is your license and ability to practice law in California.  For the adjuster, if your attorney is willing to violate some ethical rules then you’re playing with fire, which President George Washington described as “a dangerous servant and a fearful master.”


So, what is your humble blogger’s suggestion?  What if we required settlements to be rejected in writing, signed by the injured worker?

Here are a couple of scenarios:

A hearing SHALL be taken off calendar at defendant’s request if defendant shows a settlement offer was made in writing and, prior to filing a Declaration of Readiness to Proceed, applicant did not, in writing, respond to the settlement offer.  Such response shall be signed by the applicant him or herself.

If a settlement offer was made in writing by defendant, a matter may not be set for trial following a Mandatory Settlement Conference, and discovery shall not close at a Mandatory Settlement Conference, unless applicant provided a written response to the settlement offer.  Such response shall be signed by the applicant him or herself.

Obviously, offers to compromise are privileged and these documents would not be admissible for at trial.  (See California Evidence Code section 1152)

The basic idea is, of course, to confirm that the applicant is receiving the actual settlement offers, without pressuring defense attorneys to violate ethical rules.  It also serves to protect applicants’ attorneys – if trial does not go the injured worker’s way, there’s a written record that the applicant received a settlement offer and rejected it, rather than later (falsely) claiming to never have been advised of the offer in the first place.

There are, unfortunately, defense attorneys who advise their clients with the intent of generating billable hours rather than getting the best result for their clients.  There are, unfortunately, applicant attorneys who guide their clients into taking unreasonable risks to generate a higher attorney fee.  These are the vast minority of practitioners, of course, and by no means the norm.

But the damage to the reputation of the bar can be done by uncertainty and doubt alone – perhaps more documentation is the way to get around this scenario.

Ok, my dear readers, the rant is over.  Back to work!

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