Sunday, May 8, 2016

A fine line Between Discretion and Indiscretion

There is a conundrum in the legal system, in which the rights and responsibilities of various entities move about in their daily lives. In America, corporations are entities, and are considered to be similar to people. This is a “legal fiction” by which both people and corporations are “persons” within the definitions of the law, as described by And so this conflict between various rights and responsibilities involves how we individually deal with other people and how we deal with corporations, and how they all deal with us. 

Inherent in our dealings with each other and the law is an innate concept. I say innate because children seem to understand this nearly from their first words. They desire and pursue fairness, and are quick to question things which they do not perceive as “fair.” Perhaps somehow this desire for fairness is imprinted upon them, and is a product of nurture rather than nature. Either way, people desire things to be “fair.” 

Everyone is interested in their own rights. Given a choice regarding most conflicts, we might all be inclined to see it in whatever manner that favors us.  

A great analogy story describes how a mother once ingeniously dealt with that human nature. She had a piece of cake that had to be cut into two smaller pieces for her children to share. As they debated the best method for splitting this, and the mother could see the angst and anger building, she solved the problem. Child one was allowed to cut the cake, but then child two got to pick first from the resulting pieces. And thus perspectives changed a bit. As an aside, I was reminded of this recently by Richard Victor, formerly CEO of WCRI. It was good to see him at the NCCI Annual Issues Symposium and better to see him keeping a hand in American workers' compensation. 

We have a natural distaste for results that do not seem fair. Some of us think beyond the initial reaction and question our own nurturing, striving to understand on an intellectual level whether it is our heart or our head that is leading to our perception of fairness in a particular setting. Some are able to detach themselves from the personality of a situation and coldly analyze whether something is innately fair, independent of predilections or bias or personal perspective. But, that detachment may be difficult to achieve. 

There are times when sympathy plays a role. The perception of “fair” influenced by whether some person is likable, or whether the observer feels some connection (“this could be me” or “this could be my grandmother”), or whether one perceives that an injustice is being imparted upon some defenseless (or nearly) person. Many would argue that humans are naturally sympathetic. Perhaps they should be?

In our legal system, there is an inescapable function of deciding facts. Just as we may all be naturally sympathetic, there is also a sentiment that we are also prone to failures. So, in some particular situation or setting any of us might be tempted to exceed parameters. We see this in workers’ compensation from time to time. 

There are some "bad actors." Some employers do not buy insurance coverage or lie to avoid the law. Some Insurance brokers take premium payments from employers but do not procure the policy. Some insurance companies issue policies but misappropriate the funds and cannot pay legitimate claims. Some doctors bill for services that were never performed or recommend and perform procedures that were never needed. Some workers’ return to work after injuries and continue to demand and receive benefits to which they are no longer entitled. This is not an indictment of all employers, brokers, carriers, doctors or employees. But, we see these examples periodically and they illustrate that some persons can be led astray, tempted to poor behavior. 

Miriam Webster defines “discretion” as: “the freedom to decide what should be done in a particular situation.” The same dictionary defines “indiscretion” as “an act or remark that shows a lack of good judgment.”

There are disputes in workers’ compensation, as there are in the civil justice system. In the civil system we rely upon juries to decide whose version of the facts is accepted. In workers’ compensation, we rely on adjudicators with titles like Commissioner, Deputy, Arbitrator and Judge. These adjudicators have to decide which facts are accurate (the “what is so”), and then decide how that fits within the law (the “so what”). 

In any case, who wins or loses, who receives or pays, and how much, will all be questions that the adjudicatory system will strive to answer. It has been said that our American adjudicatory “system is flawed, but it is the best in the world” (my Internet searches to attribute this quote were unsuccessful). And some contend that because the system is dependent upon humans, themselves flawed, that it always will be. 

Laws, like the workers’ compensation statutes, can be tightly defined, specific and intensely detailed. Regulations adopted by the agencies that manage state workers' compensation systems can likewise be very detailed or leave room for interpretation. Left unchecked, some regulators would render their respective set of rules as dense and incomprehensible as the U.S. Tax Code. Some argue that certain states already have. In this format, we might conclude that the people’s elected representatives and regulators feel distrust for, and therefore limit the discretion of, adjudicators. By narrowly defining the parameters and constraints the legislature and regulators seek to strictly define the outcomes of what the law does or does not provide.

Likewise, legislatures and regulators can instead make broad policy statements regarding definitions and parameters, leaving latitude and discretion to the adjudicator. In this methodology, the people’s elected representatives effectively delegate a significant measure of the outcome definition to the adjudicator (discretion), which in most workers’ compensation systems at least begins with an executive branch judge, but which potentially escalates to constitutional courts, the "judicial branch” for review. 

John Campbell is credited with saying “hard cases make bad law.” And it is possible that the “hard” refers to those that offend someone’s individual sense of what is “fair” or those which arouse feelings of sympathy. Those who decry discretion espouse a fear that sympathy or personal perceptions of fairness will drive decisions in one case that might not be reached in another case with striking factual similarities. They see in this a potential or probability for disparate outcomes in similar cases. 

They perceive the pursuit of fairness in a micro sense (this case) will preclude fairness in the macro sense (across the legal system). In a macro sense, you might perceive it as unfair to learn that your neighbor received $x settling his case, for the same injury to the same body part for which you received $y. It might be because laws have changed between the two injuries, or a multitude of other reasons. But there is the potential that you might still feel slighted. 

This debate about being "fair" is not limited to workers’ compensation. It is being raised in the context of “jury nullification” in which juries refuse to follow the law in order to affect their collective definition of “justice.” Thus, someone is not convicted because a jury disagrees with the law. Or, someone is awarded damages for an event based on the juries concept of fairness in that case, rather than the law. And the outcome in the next case may or may not be similar. 

There are those who contend that some portion of reform in workers’ compensation in the last 50 years has been driven by a cycle of adjudicators expanding the inclusion within workers’ compensation with liberal and expansive interpretations, and legislators constricting the inclusion, reversing the expansion, with ever more specific definitions and parameters. 

Some perceive the judicial or quasi-judicial efforts as directed at working fairness in what they perceive as an unfair world, finding a way to provide compensation out of sympathy or heart when the law and the mind will not allow it. Some see legislative reform efforts as constricting comp and “reforming” the system, enacting broad prohibitions and strict parameters to forestall the adjudicators being too free and sympathetic with other people's money. 

Others perceive the adjudicators not as sympathetic and compassionate in their expansion of workers' compensation, but simply not smart enough to understand and follow the law. These see the legislative efforts as correcting misinterpretations and providing clarity of which these adjudicators are not otherwise perhaps capable. These see the "reform" as thus simply restoring the social contract of workers' compensation to what was intended to be at the outset. 

What is the intent of workers’ compensation? Does society intend that business should be responsible for any and all maladies and conditions that can be linked to the work-place, regardless of remoteness (1%)? Does society intend that workers should be compensation for loss of body function regardless of disability? Does society intend that medical care in workers' compensation should be boundless, more generous in any regard than group health or federal medical entitlements?

Is there a healthy balance between discretion for the adjudicator and definition by the legislature? Can people accept that there may be outcomes that are different and distinct, without the conclusion that the "system" is simply unfair or that the adjudicators are unable or incapable of interpreting the law? It is a point to ponder. Do you want to be the one who cuts the cake, or the one who gets to pick your piece first?

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