TPAs and the Unauthorized Practice of Law

By Randall W. Mikes

On May 18, 2004, the Board of Commissioners on the Unauthorized Practice of Law ("Board") released its final report recommending the Ohio Supreme Court find that a workers' compensation third party administrator ("TPA"), CompManagement, Inc. ("CMI"), and one of its non-lawyer hearing representatives, engaged in the unauthorized practice of law because of CMI's representation of employers before the Industrial Commission of Ohio. The Board further recommended that the Supreme Court issue an order prohibiting CMI and the hearing representative from engaging in the unauthorized practice of law in the future.

The Board expressly found that the following activities represented the unauthorized practice of law:

• Representation of employers' interests in handling claims before the Industrial Commission.

• Preparation, signing and filing of documents and handling claims before the Industrial Commission on behalf of employers.

• Negotiation and involvement with settling claims before the Industrial Commission on behalf of employers.

• Direct and indirect examination of witnesses during hearings before the Industrial Commission.

• Presentation of employer concerns, arguments, summations of evidence, conclusions regarding the import of factual information and/or closing statements on behalf of employers during hearings before the Industrial Commission.

• Recommendation and advice to employers as to taking appeals or other legal action in handling claims before the Industrial Commission.

• Evaluation, advice or recommendation concerning whether an employer should retain an attorney to handle a claim before the Industrial Commission.

In other words, most if not all claims administration services provided by CMI and other TPAs represent the unauthorized practice of law in the Board's opinion.

The Board's report and recommendation does not have the force and effect of law. Rather, the Supreme Court must consider this issue and issue its own decision. The first step in this process is for the Court to issue an order to show cause, and then a timetable will be set for objecting to the Board's recommendation and briefing the issue. Assuming objections are filed, oral argument will be conducted prior to a decision.

Unlike the Board, the Court has the authority to declare exceptions to the unauthorized practice of law based upon considerations of public interest. Indeed, the Court has made one such exception with regard to representation of employers by non-lawyers in unemployment compensation proceedings. Similar considerations will no-doubt be argued here.

At present, there is uncertainty at the Industrial Commission regarding the role of TPAs in the administrative process. The Commission has yet to adopt a policy relative to this issue, although it has liberally granted continuance requests in claims where the employer is represented solely by a TPA. The Bureau of Workers' Compensation has indicated that its practices with TPAs will continue as usual.

The best advice at this time is to avoid panic. Claims administration practices cannot abruptly be terminated without a significant and detrimental impact on the workers' compensation system. Employers and their TPAs should be cognizant of the Board's decision and the possibility that the role of the TPA ultimately may change. However, a final decision has yet to be made, and claims must continue to be timely managed for the sake of employers and injured workers alike.

Please Note: The Marion Labor seminar will be identical to the
11th annual Columbus Labor seminar held on March 4, 2004.