Supreme Court Issues Final Word on Unauthorized Practice of Law and Workers’ Compensation

Kegler Brown E-mployment Alert

Yesterday, the Ohio Supreme Court issued its decision in Cleveland Bar Assn. v. CompManagement, Inc. (2006), 111 Ohio St. 3d 444, 2006-Ohio-6108, concluding over four years of litigation regarding claims that CompManagement ("CMI"), a workers' compensation third party administrator, committed the unauthorized practice of law in its management of the workers' compensation claims of its customers.

In May 2004, the Board on the Unauthorized Practice of Law ("Board") found that CMI committed the unauthorized practice of law relative to a number of administrative tasks representing most of the services offered by a third party administrator ("TPA"). The Industrial Commission responded with Resolution R04-1-01 in which it defined permissible conduct by non-lawyers relative to the administration of workers' compensation claims. The Court then held in Cleveland Bar Assn. v. CompManagement, Inc. (2004), 104 Ohio St.3d 168, that "non-lawyers who appear and practice in a representative capacity before the Industrial Commission and Bureau of Workers' Compensation in conformity to Industrial Commission Resolution No. R04-1-01 are not engaged in the unauthorized practice of law." The Court remanded the case to the Board to determine whether CMI committed the unauthorized practice of law in light of the Resolution.

On remand, the Board found the following activities to represent the unauthorized practice of law: negotiation and involvement with settling claims; direct and indirect examination of witnesses at hearings; 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; recommendation to employers to appeal and take other legal action; and, recommendation to employers to retain legal counsel.

In its decision issued yesterday, the Court first held that "[a]n allegation of the unauthorized practice of law must be supported by either an admission or other evidence of the specific act or acts upon which the allegation is based." The Court then found that the allegations against CMI were either not supported by such specific evidence or did not represent the unauthorized practice in the first place.

  • Settlement: A TPA "may make actuarial determinations regarding settlement, act as a messenger for the employer in regard to settlement, and file settlement applications without conducting the unauthorized practice of law, as these activities do not require the specialized training and skill of an attorney."
  • Examination of witnesses: A TPA "who has not asked a question of the witness has not conducted an 'examination' of the witness and, thus, has not engaged in the practice of law. A [TPA] may properly communicate the employer's areas of concern to the hearing officer, who may then ask questions of the witness."
  • Presentation of employer concerns and other hearing room issues: A TPA may express employer generated concerns, present facts and documents relevant to those concerns and request a final outcome in summation so long as this is done without legal argument or analysis.
  • Recommendation of appeal/other legal action: A TPA may recommend appeal based upon claim cost considerations but not upon whether the appeal is legally supported.
  • Recommendation to retain legal counsel: A TPA may determine and recommend that an employer retain legal counsel.

The Commission's Resolution is now conclusively established as the standard for non-lawyer representation in workers' compensation matters. TPAs may continue to act in accordance with the Resolution much as they have for the last two years.