This article is about the duty of defendants in Iowa work comp cases to make good faith payments towards accepted work injuries, and how I handle attorney fees in situations like this where an injured worker is already receiving weekly benefits.
In Iowa workers’ compensation cases where the defendants have accepted or agreed that the injury was caused by work, the defendants have a duty to obtain impairment ratings to determine the extent of the injury, and a further duty to pay a reasonable amount of weekly benefits in the case. See for example Villea v. Lund Food Holdings, Inc., 737 N.W.2d 325 (Iowa App. 2007), Orris v. Kinze Manufacturing Inc., 742 N.W.2d 605 (Iowa App. 2007), and Williams v. K.W. Products, Inc., 784 N.W.2d 202 (Iowa App. 2010).
However, the fact that an employer makes good faith work comp payments toward the impairment rating does not mean that the good faith payments are all that an injured worker is entitled to receive. In most case there is plenty of room for disagreement about the extent of the injury and the resulting amount of weekly benefits that should be paid.
In the Iowa Workers Compensation system there are two main types of injuries. Scheduled injuries generally relate to the hands, arms, legs, knees, and feet. Injuries to the head, neck, shoulders, back, and hips are called unscheduled injuries. The term “scheduled” comes from the fact that scheduled injuries are compensated based on the extent of impairment to the body part, and there is a schedule setting out the maximum value of each different body part. For example, a leg has a maximum value of 220 weeks. If a knee injury (which is considered part of the leg) ends up with a 10% impairment rating, that means that the worker is entitled to 22 weeks of permanent partial disability benefits.
By contrast, unscheduled injuries generally relate to injuries to a person’s torso, and the amount of damages are determined by figuring out the reduction in the injured worker’s potential earning capacity. Determining the extent of the loss of earning capacity involves looking at and considering the injured worker’s age, education, qualifications, experience, motivation, loss of earnings, severity and location of the injury, work restrictions, inability to engage in employment for which the employee is fitted, and whether or not the employer accommodates the injured worker’s problems.
As a practical matter if you have an accepted work injury to an unscheduled body part such as a shoulder, and you end up receiving a 10% body as a whole impairment rating, then the defendants will usually tell you that they are going to voluntarily pay benefits of 10% of the body as a whole which works out to be 50 weeks of permanent partial disability benefits. Under Iowa law your shoulder injury is likely worth more than the 50 weeks of benefits that the employer and/or insurance company have agreed to pay you.
Injured workers frequently come to see me and they have already received an impairment rating, and the employer and/or insurance company has already committed to paying some definite number of weeks of benefits. My view in situations like that is that I have not done anything to help the injured worker get that commitment to 50 weeks of future permanent partial disability benefits, and I have my attorney-client fee agreement reflect that I will not receive any percentage of the weekly benefits that the employer has already committed to paying. I only receive a percentage of the benefits above and beyond what the injured worker has already been promised.
Here are several cautions relating to the topic of good faith payments:
1. The duty of the employer to obtain an impairment rating concerning the injury and to make “good faith” payments towards the permanent disability only apply if the employer has accepted or agreed that the injury arose out of work. If the employer is disputing or denying that the claim is a work injury, the employer does not have to make “good faith” payments.
2. If the injured worker enters into a settlement on his own as part of receiving the good faith payments, then they probably are not going to be entitled to additional benefits. There are two main kinds of settlements under Iowa law. If you enter into what is classified as a closed file settlement, then your right to receive any further benefits is completely cut off. If you enter into what is classified as an open file settlement you will have to show that your injury has gotten worse after the open file settlement in order to receive any additional benefits.
See here for my January 25, 2013 blog post that talks about closed and open file settlements in more detail. See here for my May 16, 2012 blog post that talks about what is necessary to receive additional benefits after an open file settlement.
3. It is always a good idea to talk to a lawyer early on about an Iowa work injury claim. There are plenty of things that can go wrong with an otherwise strong workers’ compensation claim if you do not take certain steps. See here for my July 3, 2013 blog post that talks about some of the potential hidden danger areas in Iowa work comp cases. Many lawyers, including the lawyers at our firm, will talk to you without cost or obligation and give you guidance on how to proceed even if you are not yet ready to hire a lawyer.