Three-card Monte is a game of misdirection. All eyes are drawn to the attention-grabbing behavior over here, so they completely miss the sleight of hand over there … where the real action is.
For the last few weeks, all eyes were focused on Trenton for the budget negotiations. But cliffhanger negotiations are the perfect opportunity for state legislators to engage in their own games of misdirection, sneaking pet projects through to help special interests at the expense of everyone else.
This year, one especially indefensible pet project passed quickly through the legislative process and has arrived on the governor’s desk. And Gov. Phil Murphy now has to decide whether he wants to help wealthy trial lawyers collect more money at the expense of injured workers.
If signed into law, Assembly Bill 2510 will change how attorney’s fees are calculated when workers are injured on the job, so attorneys can collect more money at the expense of their injured clients.
Workers’ compensation was designed to be a faster, more efficient alternative to the lawyer-driven tort system. Incentives are set so that claims can be made and paid without need for attorneys and long, drawn-out litigation. Specifically, insurance carriers have the opportunity to make prompt, good faith offers of compensation and have the entire amount go directly to the injured worker, with no deductions for legal fees.
That incentive streamlines the claim process, to everyone’s benefit. Employees get certainty of recovery and prompt payment without need for protracted litigation. Employers get greater predictability. And both benefit from the overall efficiency of a system with minimal transaction costs.
The proposed legislation would eliminate that efficiency and instead create a new incentive for more lawsuits. The law would give lawyers a share of the entire payment, even if the carrier was ready and willing to pay the same amount without any litigation. So, attorneys would now have an incentive to insert themselves into the process in order to take a cut of proceeds that should be going directly to compensate the injured worker.
The end result will be a lot of unnecessary lawsuits, delayed payments to injured workers and an increased overall cost and inefficiency in the workers’ comp program, with a consequential dampening effect on wages. And worst of all, because the attorney fees for the unnecessary litigation come out of the injured worker’s pocket, the legislation will actually reduce workers’ take-home recovery for their injuries.
As it stands, this legislation will be a disaster for hard-working employees who are injured on the job. But Murphy has an opportunity to stand up for these workers and put their interests ahead of wealthy trial lawyers: He can ensure that, when insurance carriers make prompt offers, the worker can keep the entire amount. Lawyers should only be able to take a share of the proceeds when they have brought real value to the process and significantly increased the worker’s recovery.
Murphy should do the right thing and tell the legislators supporting this special interest giveaway that he won’t support legislation that takes money from injured victims to benefit wealthier attorneys, endangering the workers’ comp system and ginning up unnecessary litigation in the process.
Alida Kass is president and chief counsel of the New Jersey Civil Justice Institute.