Malpractice Traps In Plaintiff’s Workers' Compensation Practice by
Bobby L. Bollinger, Jr.
Certified Specialist in Workers' Compensation Law
Bollinger & Piemonte, PC
Attorneys At Law
601 East Fifth Street
Suite 250
Charlotte, NC 28202
704-373-1777
Copyrighted 2004

INTRODUCTION
This paper will address a variety of rules and situations that are encountered by Plaintiff’s counsel in typical accident, specific traumatic incident and occupational disease cases. The purpose of this paper is to provide a reminder to the reader of certain issues that should always be reviewed and handled when these issues are encountered in a case. Although every effort has been made to give a useful list of “malpractice traps” by the very nature of the topic, it is not possible to provide an all-encompassing list of potential malpractice situations.
Some of the issues pointed out below will be common to all types of cases as well, such as the need to communicate clearly with your client. Other issues are very narrow and technically oriented but should, in the opinion of the writer, be mastered by anyone who attempts to practice workers' compensation law on behalf of injured workers.
The author gratefully acknowledges the input of a number of practitioners of workers' compensation law, including Leto Copeley, Chief Deputy Commissioner Stephen Gheen,
Charles “Pud” Hassell, Faith Herndon, George Lennon, Vernon Sumwalt, and a couple of the writer’s friends who practice law on the dark side and therefore will remain anonymous.

1. TIME DEADLINES
Jurisdictional Bar
An injured worker’s right to receive workers' compensation is barred after two years from the date of his accident or specific traumatic incident or the starting point of an occupational disease case. This two-year rule is a “jurisdictional bar.” The Industrial Commission must obtain subject matter jurisdiction of the claim within two years by the filing of a Form 18 by the
Plaintiff, a Form 60 by the Defendant, or by some type of Memorandum of Agreement between the parties. If the employee is paid indemnity compensation that is provided in Article I of the
Workers' Compensation Act, that also satisfies the jurisdictional requirement. However, it appears that some type of form establishing the claim with the Commission still needs to be filed even when the employer has paid indemnity compensation. When the case has been “medical” only, and no indemnity compensation has been paid, a claim or Memorandum of Agreement, such as a Form 21, must be filed within two years after the last payment of medical compensation.
Occupational disease claims have an additional rule as set forth in G.S. § 97-58. The same forms have to be filed with the Commission to establish jurisdiction, but the time of notice of an occupational disease runs from the date that the employee has been advised by competent medical authority that he has an occupational disease. In addition, an occupational disease claim must be filed with the Industrial Commission within two years after death, disability or disablement as the case may be. An exception exists for radiation injuries. Anyone suffering from a radiation injury, disability or death has to file the claim within two years of the date upon which the employee suffered incapacity from the exposure to radiation and either knew or in the exercise of reasonable diligence should have known that the occupational disease and radiation poisoning was caused by his present or prior employment.
Damage Control
If you miss the two-year jurisdictional bar, there are equitable exceptions that can be pleaded. Estoppel is the primary equitable remedy that the Commission and the courts have allowed. Typically, a valid estoppel claim arises when the Plaintiff has relied on the employer’s promises to take care of him following the injury. In addition, the two-year jurisdictional bar is tolled for minors who do not have a legal guardian or other legal representative. Weston v. Sears

Roebuck & Co. 65 N.C. App. 309, 309 S.E.2d 273 (1983) cert. denied, 311 N.C. 407, 319 S.E.2d
281 (1984) (estoppel); Lineberry v. Town of Mebane, 219 N.C. 257, 13 S.E.2d 429 (1941)
(tolling). However, payment of medical expenses by the Defendant insurance company or employer does not constitute a waiver of the two-year rule. Barham v. Kayser-Roth Hosery, 15
N.C. App. 519, 190 S.E.2d 306 (1972).
In addition, an employee has thirty days to report the injury or occupational disease to his employer in writing . The preferred method of doing this is with a Form 18, although many employers have their on claim form to be used internally. If the employee fails to report it within thirty days in writing, then the employee is not entitled to medical or indemnity compensation that accrued prior to giving the notice, unless the employer or his agent or representative had knowledge of the accident, or the Plaintiff had been prevented from giving notice by reason of physical or mental incapacity, fraud or deceit. Furthermore, no compensation “shall be payable” unless written notice is given within thirty days after the occurrence of the accident or death, unless a reasonable excuse is made to the satisfaction of the Commission that the employer was not prejudiced by the late notice. G.S. § 97-22. Although the statute speaks in terms of
“accident” it has not been amended since 1929 and it is generally considered to include accidents, specific traumatic incidents, and occupational diseases.
If the employee failed to give written notice within thirty days, or if he hired you and you failed to do so, then try to make sure that you can show no prejudice occurred to the Defendants as a result of the late notice. The Commission is generally reluctant to find prejudice absent compelling facts.
Change Of Condition
G.S. § 97-47 controls change of condition. This statute allows a party to petition the
Commission to review any previous award of the Commission and then modify it to end, diminish, or increase the compensation previously awarded. Parties are limited to two years from the date of the last payment of compensation pursuant to an award, but in a case in which only medical or other treatment bills are paid, and no indemnity compensation, then the parties are limited to twelve months from the date of the last payment of bills for medical or other treatment. The bills must be paid pursuant to the Workers' Compensation Act. This section only applies if there has been a previous “award” of the Industrial Commission, although in a

medical-only case it would apply if the bills were paid pursuant to the Act as opposed to paid outside the workers' compensation system.
If it has been more than two years since the last payment of compensation in a case that involve both medical and indemnity compensation, look to see whether there is an unpaid permanent partial disability rating or some medical evidence of some degree of permanent partial disability. Also look to see whether there is any evidence of permanent partial disability pursuant to G.S. § 97-30, i.e., wage loss due to the injury. The case continues to “pend” at the
Commission until all of an injured employee’s compensation injuries and disabilities have been considered and adjudicated by the Commission, absent laches or some statutory time limitation.
Hall v. Thomason Chevrolet, 263 N.C. 569, 139 S.E.2d 857 (1965). However, if the Plaintiff failed to file a Form 18 or other document establishing the subject matter jurisdiction of the
Commission within the first two years, then the provisions of G.S. § 97-47 will not save the claim.
Other Time Periods To Consider
When the Defendants do not pay an award of the Commission, including payments due on a clincher that has been approved, within fifteen days of the date the approval Order becomes final, then there is a mandatory 10% penalty on the unpaid compensation. However, you have to ask for it. As a general rule, I wait until the check arrives, then photocopy the check then attach it to a Motion, along with a photocopy of the Order approving the payment, so that the date of the Order and the date the check was issued are both apparent from the attachments. I send that to the individual who approved the payment in the first place, along with a proposed Order, and typically receive a 10% payment. G.S. § 97-18.
A party has fifteen days to appeal an Opinion & Award from the Deputy Commissioner.
A party has thirty days to appeal an Opinion & Award from the Full Commission. A Motion to
Amend or Reconsider the Opinion and Award filed at either level tolls the time for giving Notice of Appeal. After the Motion to Amend or Reconsider has been ruled upon, the entire appeal period begins to run again.
Once Notice of Appeal of a Full Commission decision has been given, jurisdiction is divested from the Full Commission and shifts to the Court of Appeals. If you need to get an

Extension of Time to approve the Record on Appeal, or something else along those lines, then the Motion should be directed to the Court of Appeals, not the Industrial Commission.
Counsel should be cognizant of the record closing dates contain in the Orders issued by
Deputy Commissioners within a few days after a hearing. Those Orders also typically give a date on which the Contentions and Proposed Opinion and Awards are due. Allowing the record closing date to slip by such that you are not allowed to take a crucial medical deposition could be a potential problem, particularly if the Deputy is unwilling to give you an extension after the fact.
Allowing the Contentions deadline to pass prevents you from having your last and possibly best opportunity to advocate on behalf of your client.
2.
VERIFY THE AVERAGE WEEKLY WAGE AND COMPENSATION RATE
G.S. § 97-2 (5) sets forth five methods of calculating average weekly wage. These methods are listed in order of preference. Though set forth in the statute, any period of eight or more consecutive days that an employee does not work (and is not paid vacation, sick or other earnings) is dropped from the calculation of average weekly wage.
Employers frequently submit Form 22s that are not filled out correctly. A Form 22 that does not show the days that were worked, or a Form 22 on which the earning information does not appear to match the Plaintiff’s pay stubs and W-2 forms, cannot be relied upon. Additional investigation must be performed. In the experience of this author, the average weekly wage asserted by the Defendants is incorrect approximately 40% of the time, and when it is incorrect, it is almost always understated rather than overstated.
Calculating average weekly wage in an independent contractor context is laborious and complex. The leading case on this topic is probably Christian v. Riddle and Mendenhall
Logging, 117 N.C. App. 261, 450 S.E.2d 510 (1994).
There are also different rules for recently promoted salesmen, injured workers with concurrent related employment, and volunteer fireman. York v. Unionville Volunteer Fire
Department, 58 N.C. App. 591, _____________________________________________.

3.
FAILURE TO IDENTIFY COMPLEMENTARY CLAIMS
An injured worker who has been out of work for five months and who does not appear to be able to go back to work in the foreseeable future is certainly a potential Social Security
Disability beneficiary. These clients should be advised of their Social Security disability rights and encouraged to apply for disability after they have been disabled for five months and certainly no later than their first anniversary of disability. Failure to do so can cause these clients to lose disability benefits to which they which would otherwise be entitled.
Anytime a workers' compensation claimant is terminated or demoted from his job of injury, a claim under the North Carolina Retaliatory Employment Discrimination Act, G.S. § 95-
240 ____ , should be evaluated. Some attorneys who handle workers' compensation cases refer these REDA claims out to other counsel, and it is often difficult for these clients to find someone to just represent them on the REDA claim. The REDA statute is actually quite simple and straightforward, and the claim must first be submitted to the North Carolina Department of Labor for administrative processing. Much of the information that you need in the workers' compensation case is also useful in the REDA claim, such as the employment records that are available under Rule 607. REDA claims are filed in Superior Court.
Some clients will also have a claim to make on disability insurance, although most disability insurance policies seem to have an exclusion if the job is work-related. However, in a denied workers' compensation case, that exclusion may not apply. Certainly inquiries should be made to determine whether the client has general disability insurance or credit disability insurance.
4.
FAILURE TO REVIEW STATUTES AND APPLICABLE LAW PRIOR TO
MEDIATION OR HEARING
This problem takes multiple forms and manifests itself as a lack of general preparation and a lack of specific preparation at both mediation and hearing. In general, Plaintiff’s attorney sometimes come to mediations or hearings without having interviewed witnesses, conducted discovery, or relevant documents. Some attorneys use mediation as a discovery tool, and that is acceptable, but the time spent in mediation should be a supplement to previous efforts to discover relevant materials, and not a substitute for those efforts. As a practical matter, if the

mediated settlement conference is used as a discovery conference, then an outstanding opportunity to resolve the case favorably to your client has been squandered.
More damaging is the failure to prepare adequately prior to hearing. This takes the form of failure to understand the burdens of proof, failure to subpoena witnesses, failure to understand the legal issues involved in the case and failure to present an effective body of evidence that pertains to the issues that are, in fact, crucial.
The Plaintiff generally has the burden of proof, and the Plaintiff always has the burden of proof to establish disability. Disability is defined as a loss of wage earning capacity and the disability ratings also known as permanent partial disability ratings are simply conclusive presumptions of wage earning disability. However, the Defendants have the burden of proof in a few instances. There is a mild shifting of the burden of proof when a Form 21 compensation agreement for “necessary weeks,” thereby giving rise to a presumption of disability. The
Defendants have to come forward with evidence rebutting the presumption first, followed by an opportunity to establish disability with additional evidence. However, the Defendants have a clear burden of proof under G.S. § 97-12, which is the ___________ defense statute for intoxication, willful neglect, will disobedience of statutory duty, and willful intention to injure or kill himself or another. The Defendants also have the burden of proof when
____________________________________.
5.
MEDICAL DEPOSITION PROBLEMS
In all workers' compensation cases, it appears that the safest way to ask the medical causation question is to do so in the context of this: “Doctor, do you have an opinion to a reasonable degree of medical certainty as to whether the [accident/STI] caused the medical condition for which you treated Mr. Smith?” Recent case law has suggested that this is the language that the courts favor, although other language that establishes the necessary level of medical opinion is also acceptable. However, you have to be careful when a doctor only states that is it “possible” or similar weak language on the causation issue, as the cases that allow that type of language to establish medical causation tend to be disfavored. Peagler v. Tyson Foods,
______________________________________’ Holly v. ACTS, ____________________.
Another problem with medical evidence is the failure of Plaintiff’s counsel to ask the
“increase risk” question in occupational disease cases that fall under the “catch-all” in G.S. § 97-

53 (15). This statute section lists approximately twenty-seven specific occupational diseases, such as Synovitis caused by trauma in employment and Tenosynovitis caused by trauma in employment, along with such things as Asbestosis, Undulant fever, poisoning by various substances, carbon monoxide poisoning, chrome ulceration and contraction of Anthrax, among other things. Other illnesses can also be occupational diseases under the catch-all division.
However, in order to qualify as an occupational disease, it must meet the following standard of:
Any disease, other than hearing loss covered in another subdivision of this section, which is proven to be due to causes and conditions which are characteristic of and peculiar to a particular trade, occupation or employment, but excluding all ordinary diseases of life to which the general public is equally exposed outside of the employment. G.S. § 97-53 (13).
Numerous lawyers in the past have forgotten to ask the doctor the causation question using the last portion of that section, the “increased risk” prong. After the first portion of this subsection is established in the deposition, the doctor should be asked a question along the lines of this: “Doctor, do you have an opinion to a reasonable degree of medical certainty as to whether Mr. Smith was at an increased risk to develop carpal tunnel syndrome because of his job duties, as compared to other citizens of North Carolina who do not work in his particular occupation?” Put another way, the doctor could be asked, “Doctor, do you have an opinion to a reasonable degree of medical certainty as to whether Mr. Smith’s job duties put him at an increased risk of developing carpal tunnel syndrome, as compared to anyone else in the general population who was not performing his job?”
In addition, counsel should always ask physicians about the possibility of the need of future treatment. The relevant statute speaks in terms of whether there is a “significant risk of the need for future medical treatment” If the doctor indicates there is a significant risk, try to get him to delineate exactly what medical treatment might be necessary. Then, in the Opinion &
Award, ask the Deputy Commissioner to make the necessary Findings, Conclusions, and Awards that allow medical treatment beyond the two-year limit. G.S. § 97-25.1.
6.
DISCOVERY ISSUES
Rule 601 allows you to obtain without a formal discovery request your client’s employment and medical records, copies of all Industrial Commission forms filed in the case by the other side, copies of correspondence to and from the other side or its agents and the medical

providers, and copies of all nursing and rehabilitation reports. You initial file set up procedure should include a form letter that tracks Rule 601 that goes out to both the employer and the insurance carrier seeking these materials and setting forth the deadline as set forth by the Rule for production. You should follow-up and you should have all these materials prior to mediation.
The employment records can often be very helpful in preparing the case. Please note that other types of request for production of documents are not permitted unless the party propounding the request obtains the permission of the Industrial Commission or the consent of the other party.
Workers' Compensation Rule 605(3).
7.
SETTLEMENT ISSUES
In clincher agreements, always consider whether to include Social Security offset language. The Social Security Administration will allow a lump sum workers' compensation settlement under certain circumstances to be spread out over the statutory life expectancy of the
Plaintiff if the proper language is used in the clincher agreement to establish this scenario.
Absent this language, the Social Security Administration will look for the Plaintiff’s presettlement compensation rate and then use that figure as his Social Security offset until such time that the entire lump sum settlement has been allocated. If a 50 year old man on Social Security disability had a compensation rate of $400.00 per week, and he settled his workers' compensation case for a net settlement of $120,000.00 after legal fees and expenses, then the allocation would be $120,000.00 divided by $400.00 equals 300. The Social Security Administration would not recalculate his disability benefit until three hundred weeks have elapsed from the date of settlement.
On the other hand, under N.C.G.S. § 8-46 that 50 year old man has a life expectancy of
29.3 years or 1,524 weeks. You can divide the $120,000.00 net settlement by the 1,524 weeks to obtain an effective weekly rate for offset purposes of $78.74. Ordinarily, Social Security will recalculate his disability benefit using the compensation rate you have set forth in the clincher agreement of $78.74 per week, rather than $400.00 per week, thereby minimizing the Social
Security offset for workers' compensation benefits and significantly increasing the disability benefits paid to your client. This has become such a matter of common knowledge among experienced workers' compensation practitioners that failure to include offset language should be considered professional negligence.

However, there does not seem to be a consensus as to whether offset language should be included in every case. Relatively small settlements, settlements for people who do not appear to be candidates for Social Security Disability and settlements for people who have returned to work and are doing well may not want offset language. The writer does not view the failure to include offset language in every clincher as professional negligence, but a consideration should be made of each clincher agreement to determine whether offset language is approximate.
Medicare set aside issues are a hot topic of discussion at this time in the workers' compensation community. The Medicare position on setoff seems to change every month or so.
The essential rule, as of May 17, 2004, is this: If a settlement is in the amount of $250,000.00 or more, Medicare’s interest must be considered and a set aside must be allocated. If the settlement is less than $250,000.00 and the Plaintiff
New Tape: ?
1.
Clincher settlements of $250,000.00 or greater
2.
Clincher settlements where the Plaintiff is already receiving Medicare (or Social
Security Disability)
3.
Cases settling for less than $250,000.00 in which the Plaintiff is reasonably expected to become eligible for Medicare within the next thirty months.
Much has been written in other seminars about the particulars of Medicare set aside. For this paper, the criteria of when it needs to be considered is sufficient. The reader is referred to the other excellent papers, particularly those written by Kathleen Glancy and others, for further details for Medicare set aside.
Reimbursement of Group Health Insurance
Group health insurance plans governed by ERISA are covered by the Hansen legislation which appears as G.S. § 97-17 and Workers' Compensation Rule 502. However, this statute does not apply to non-ERISA plans such as health care provided by Union agreements or under state law. One therefore needs to be aware of the reimbursement issues in those contexts and deal with them appropriately.

N.C. Vocational Rehab Lien
If North Carolina Vocational Rehabilitation has provided services to your client, everyone involved in the case is potentially liable for reimbursement. Make sure you investigate the possibility of a vocational rehab lien and work out an agreement as to who will pay vocational rehab. Absent an agreement, vocational rehab can go to your client to be reimbursed out of his Compromise Settlement Agreement proceeds.
Unpaid Medical Bills
Workers' Compensation Rule 502 sets forth certain requirements in a clincher agreement for listing medical bills, including how much was charged, who has paid what amount, and how much is outstanding. The Commission has this rule in order to implement the Hansen legislation, but from a malpractice point of view, you need to make sure you have included all the client’s unpaid outstanding medical bills in the required Exhibit to the clincher. Actually, you need to go back further than that, to the preparation of your demand or mediation presentation, and make sure that you or your staff has obtained the outstanding balances from all medical providers. Otherwise, your client is liable to get a settlement and then be stuck with an unpaid medical bill that she did not expect and that she counted on you to take of.
8.
DON’T LOSE SIGHT OF YOUR CLIENT’S BEST INTEREST
Anyone who has mediated cases regularly for a variety of lawyers has seen the following scenario transpire in the Plaintiff’s caucus. The Plaintiff’s lawyer is anxious to get a case settled to close the file and collect a fee and recommends a settlement to the client that is significantly less than what the client deserves or should get in the case, but the client, relying on his or her attorney, agrees to accept the lower settlement amount. A truism in settling workers' compensation cases is that a case must run its natural course in order for the maximum benefit to be obtained for the Plaintiff. A lawyer who settles a case based on his own wants, desires, or business needs, who is not honestly driven in the decision making process by the _____ star of his client’s best interest, has, in the opinion of this writer, committed malpractice and probably an ethical violation as well.

The ironic thing about this is that if a Plaintiff’s lawyers will simply make it his rule that he will never settle a case before its time, after a couple of years, he will find that his workers' compensation fee revenue has increased significantly because he has taken better care of the cases he has and ultimately getting better outcomes for his clients and himself.
Failure To Communicate
A corollary with losing sight of the client’s interest is failing to communicate effectively and frequently with the client. For instance, if the Defendants file a Form 24 procedure and serve it on the attorney and not the client, the attorney better notify the client about it and explain the potential outcome. A client who unaware of a Form 24 proceeding, and who then loses that petition and has his checks cut off, is not going to be very happy. In addition, had the client been contacted, he or she may have been able to provide the attorney with information that would have assisted in defending the Form 24. Other egregious examples are failure to communicate settlement offers, failure to communicate the existence of additional claims on which the statutes of limitations is running; failure to communicate dates for mediations and hearings, and failure to assist the client in answering discovery on a timely basis so as to avoid sanctions pursuant to the
Defendant’s Motion to Compel. In addition, failure to communicate with a client about the status of a case generally is one of the most frequently cited reasons for grievances filed with the
North Carolina State Bar in all disciplines.
9.
APPELLATE ISSUES
Jurisdiction
As noted above, once a Notice of Appeal is filed with the Full Commission, jurisdiction shifts with the Court of Appeals. Motions pertaining to extensions of time and other matters need to be directed to the clerk of the Court of Appeals at that point with a copy going to the Full
Commission.
The Appellate Rules change almost annually. Failure to follow the Appellate Rules can result in a Brief being stricken or an Appeal being dismissed. If you are going to appeal a case to the Court of Appeals or the Supreme Court, the first thing you should do is sit down with the latest copy of the Rules and review them thoroughly. If necessary, make yourself a chart of the various time deadlines that are applicable to your case so that you are less likely to miss

deadlines. Review all of the formatting rules for records and briefs. The Court of Appeals will reject a Brief that is in the wrong type size or type face, or which runs over the page limit. In addition, keep in mind that certain costs need to be paid at the Court of Appeals if you are the
Appellant and that check, along with the Appellate Information Form or the Appeals Information
Form should be sent in with the Record on Appeal.
A more difficult issue is determining whether you need to make a “Cross Appeal” or simply a “Cross Assignment of Error.” If you make a cross assignment of error, you can never do any better than the Opinion & Award you received at the Full Commission. If you want to improve on something that the Full Commission included in its Opinion & Award, then you need to file a cross appeal with the thirty days allowed to give Notice of Appeal. If you are simply filing a cross assignment of error, that simply needs to be done on a Record on Appeal.
Once you have assigned error, you must argue it in the Brief and you must point out specifically in the Brief the error that is being argued. Failure to argue an assignment of error in your Brief results in abandonment of the error and it will not be considered by the Court of
Appeals.
Prior to filing an Appeal, make sure that you are not attempting to appeal an interlocutory matter. Those appeals are typically dismissed but you can go to a great deal of trouble and effort preparing an Appeal only to have it dismissed in that fashion. If you are on a contingent fee, I don’t know that it necessarily rises to the level of malpractice, but it certainly might delay resolution of the case to go forward with premature appeals.
10.
GENERAL CONSIDERATION
Never Be the Third Lawyer on a Case
This is a recipe for trouble. If the first two lawyers died in the middle of the case, you may be fine. If the first two were fired because the client was unhappy with them, what makes you think the client will be any happier with you? Banish that thought.
CONCLUSION
Hopefully, this paper will keep the reader mindful of areas that are common to most cases and potential weak spots for professional negligence. As noted in the introduction, this list is not meant to be all inclusive, as such a list would be impossible to make. However, if one is diligent

in reading the statutes, Rules, and case law, and in investigating the facts, and in allowing enough time to think about and analyze each case, and keeps the client’s best interest at heart, hopefully one will avoid any type of professional negligence exposure throughout his or her career.