Status of Non-Lawyer Representation in Ohio Workers’ Compensation Claims
Kegler Brown Labor & Employee Relations Newsletter May 1, 2006
The latest in the saga of the unauthorized practice of law allegations against CompManagement, Inc. (CMI), a workers' compensation third party administrator, occurred when the Board of Commissioners on the Unauthorized Practice of Law (Board) released its Amended Final Report on Remand. The Board again found CMI and one of its non-lawyer hearing representatives engaged in the unauthorized practice of law. Specifically, the Board found that CMI and its hearing representative engaged in the unauthorized practice of law relative to the negotiation and settlement of claims, direct examination of witnesses at hearings, presentation of argument at hearing and recommendation and advice to employers regarding the taking of appeals and other legal action. The Board recommended the Supreme Court of Ohio enjoin CMI and its hearing representatives from engaging in the unauthorized practice of law. The Board, however, recommended against any civil penalty being issued in this case.
By way of background, in April 2002, the Cleveland Bar Association filed a complaint against CMI and several of its employees and principals claiming they engaged in the unauthorized practice of law relative to the representation of employers at Industrial Commission hearings and by performing certain administrative tasks in workers' compensation claims. On May 18, 2004, the Board released its decision finding that CMI committed the unauthorized practice of law relative to several administrative tasks, including hearing representation, which encompassed most of the services offered by the TPA. [See E-mployment Alert, May 21, 2004]
This decision created great chaos, particularly with regard to the role of TPAs at hearings. The Industrial Commission quickly responded by issuing Resolution R04-1-01, which identified the functions non-lawyers could and could not perform relative to the administration of workers' compensation claims. The Resolution both reaffirmed prior policy and specifically addressed some of the Board's findings. A complete copy of the Resolution can be obtained at www.ic.state.oh.us/resolutions/r4101.html.
Subsequently, the Ohio Supreme Court heard CMI's objection to the Board's recommendation. In Cleveland Bar Assn. v. CompManagement, Inc. (2004), 104 Ohio St.3d 168, the Court held 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 then remanded the case to the Board to determine whether CMI and its hearing representative committed the unauthorized practice of law in light of the Commission's resolution.
On January 24, 2006, the Board issued its Amended Final Report upon Remand in which it addressed its prior findings of unauthorized practice (in bold) in the context of the Court's holding:
- Representation of employers' interests in handling claims before the Industrial Commission: the Board recognized the Court's holding effectively overruled this finding of unauthorized practice.
- Preparation, signing and filing of documents and handling claims before the Industrial Commission on behalf of employers: the Board found CMI did not engage in the unauthorized practice of law with respect to this activity pursuant to R04-1-01(A)(1)-(6).
- Negotiation and involvement with settling claims: the Board found CMI engaged in the unauthorized practice of law finding that this conduct was prohibited by R04-1-01(B)(3)-(6). The Board noted that settlement negotiations require legal review and analysis of claims, evaluation of evidence, credibility of witnesses and advice as to outcomes which extend beyond the authority granted by subsections (A)(1) through (A)(8).
- Direct and indirect examination, including cross-examination, of witnesses during hearings: the Board found CMI engaged in this activity and, therefore, the unauthorized practice of law in violation of R04-1-01(B)(1) and (3).
- 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: the Board found this activity represented the unauthorized practice of law in that it violated R04-1-01(D)(1) through (7).
- Recommendation and advice to employers as to taking appeals and other legal action: the Board found recommendations in this regard were not based solely upon the financial and/or economic concerns and were in direct violation of R04-1-01(B)(2)-(7) and, therefore, constituted the unauthorized practice of law.
- Evaluation, advice or recommendation concerning whether an employer should retain an attorney to handle a claim before the Industrial Commission: the Board found this activity was permitted by R04-1-01(8) and (9). However, the Board did warn the actions that lead to making the recommendation could be in violation of R04-1-01(B)(2)-(6). Accordingly, although not found to be the unauthorized practice of law per se, the Board stated CMI was on precarious ground in this regard.
The only finding that affected TPA practice since the release of the Commission's Resolution is that regarding negotiation of settlements. Some TPAs now do not negotiate settlements on behalf of their customers. Rather, they will provide the analysis as to the impact of a given settlement on the employer and leave the negotiation to the employer and/or its counsel. Other TPAs will contact the claimant or his or her representative and make a settlement offer if fully authorized by the employer to do so, with the understanding that the TPA has conducted only an actuarial analysis for settlement purposes, not a legal one.
Objections to the Board's recommendation have been filed by both parties and oral arguments have been scheduled for April 11. The Court will address these issues and will adopt recommendation or issue its own conclusions of law. We do not anticipate the holding to result is substantive changes to the TPAs' role relative to workers' compensation administration as it has been since June 2004.