HomeMy WebLinkAbout1996-10-22; City Council; 13858; LIABILITY AND WORKERS' COMPENSATION CLAIMS SETTLEMENT AUTHORITYLMILITY AND WORKERS’ COMPENSATION
CLAIMS SETTLEMENT AUTHORITY
ITEM EXPLANATION
The evaluation of a liability claim begins the day it is received. Staffreports are gathered and
an investigation is initiated so that the claimant receives a response and any compensation due
as quickly as possible. This emphasis on expeditious processing is possible through the
settlement authority provided to staff, and provides claimants with high quality customer
service, minimizes inconvenience to the claimant, and reduces the potential for additional
costs to the claimant and the City.
In 1981, Council established liability claims settlement authority. The City Manager, with the
concurrence of the City Attorney, was provided with settlement authority not to exceed four
thousand nine hundred ninety-nine dollars ($4,999). Since 1981, claim amounts have
increased, as have all costs since that time. As a result, an increasing number of claim
settlements are above the limit of staff authority, and the processing of these settlements
necessarily includes the time required to bring an agenda bill before the City Council. This
step results in additional time the claimant must wait for a determination and any
compensation due for hisher property damage and/or injury.
Processing time for settlements can be particularly problematic for claimants who have
experienced property damage as a result of a sewer back-up or water-line break. In these
instances, remedial actions must be taken immediately or the claimant and City can incur
additional damages and expenses.
In recognition of the need for the efficient and timely resolution of claims, and the increase in
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be calculated in a specific manner. A physician’s report is “rated”, using specific criteria
developed by the State, to arrive at a level of permanent disability (PD) that is the equivalent
of a sum of money. This sum of money constitutes the “settlement” with the employee.
Moreover, the State requires that PD payments be made within a specified time period.
Under Section 4650 of the Labor Code, employers are mandated to begin paying PD benefits
within 14 days of the date the employee is determined to be “permanent and stationary” by the
treating physician. Even if there is a disagreement on the total amount of the settlement, or
the City is waiting for completed settlement paperwork on a case, the City must make
advances in good faith toward a sum that is a reasonable expectation of settlement. As a
result, there is little discretion that can be applied to workers’ compensation settlements, and
under the current settlement authority limits, cases are presented to the Council for which
there is little the Council can do but approve payments already made or already mandated by
the State. In the settlement of nearly all cases, except in those litigated, there is little
discretionary action provided for under the Labor Code. Even if the rating on one medical report is disputed, it is contested through another physician’s report which undergoes the
same rating system. Finally, all settlements, contested or not, are approved by the WCAB and
are adjusted if a judge so determines it is appropriate.
In recognition of the state laws surrounding settlement determinations and procedures, the
increase in the cost of settlements since the limit was established in 1982, and the importance
of public review of expenditures, staff recommends adoption of the attached resolution to
provide the City Manager, with the concurrence of the City Attorney, the authority to settle
workers’ compensation claims against the City when the amount to be paid pursuant to the
settlement does not exceed ten thousand dollars ($10,000).
FISCAL WACT
Revising the settlement authority limits will not have a direct fiscal impact on the City.
However, the quick and expeditious settlement of certain claims may help the City avoid
additional legal costs and/or increases in the amounts claimed due to frustration with the
settlement process.
EXHIBITS
1. Resolution No. 96-3HSRevising Liability and Workers’ Compensation Claims
Settlement Authority
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eo .. RESOLUTION NO. 96-345
A RESOLUTION OF THE CITY COUNCIL, OF THE CITY OF
CARLSBAD, CALIFORNIA REVISING LIABILITY AND WORKERS’
COMPENSATION CLAIMS SETTLEMENT AUTHORITY
WHEREAS, the effective and expedient administration of the liability and
workers’ compensation self-insurance programs requires that the authority to settle claims
be clearly defined and established; and
WHEREAS, liability and workers’ compensation claims settlement
authority limits were established in 1981 and 1982 respectively; and
WHEREAS, the need exists to revise the settlement authority limits.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of Carlsbad as follows:
1. That the above recitations are true and correct.
2. That the City Manager with the concurrence of the City Attorney shall
have authority to settle liability and workers’ compensation claims against the City when
the amount to be paid pursuant to the settlement does not exceed ten thousand dollars
($lO,OOO), or twenty-five thousand dollars ($25,000) in the case of liability claims related
to water or sewer service.
3. That the City Council shall have authority to settle liability and
workers’ compensation claims against the City when the amount to be paid pursuant to
the settlement exceeds ten thousand dollars ($lO,OOO), or twenty-five thousand dollars
($25,000) in the case of liability claims related to water or sewer service.
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’ PASSED, APPROVED AND ADOPTED at a regular meeting of the City
Council on the 22nd day of OCTOBER 1996, by the following vote, to wit:
AYES: Council Members Lewis, Nygaard, Kulchin, Finnila, Hall
NOES: None
ABSENT: None
ATTEST:
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ALETHA L. RAUTENKRANZ, City Clerk
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