A New and Better Regulatory Agency For Nevada Work Comp Claims?


The Nevada Justice Association, comprised of plaintiffs' attorneys, has a small off-shoot group of workers' compensation attorneys who represent injured workers.  I joined this group, started by Billie-Marie Morrison of Craig Kenny & Associates this past year, and I'm glad I did.  The attorneys who attend freely share their practice tips, and they are very dedicated to improving the Nevada workers' compensation system for injured employees.

Most of this group attended the educational conference  by the Division of Industrial Relations, Workers' Compensation Section  a few months ago.  During open question and answer sessions with the DIR  department heads, we called  DIR on the carpet for not complying with the law that requires that DIR keep accurate statistics about DIR complaints filed, fines imposed, and benefit penalties paid by TPA's and insurers.  We  also expressed our disappointment in the DIR complaint process as a remedy for negligent and incompetent claims handling.  

At the DIR conference, the DIR Administrator, Donald Jayne, his chief attorney, Don Smith, and Southern District Manager, Chuck Verre, promised to meet with us claimants' attorneys to discuss our concerns in greater detail.  Just prior to our meeting last Thursday, it was announced that Donald Jayne had left the DIR.  However, Chuck Verre and Don Smith, along with Susan Sayegh,   Southern District Manager, fulfilled their promise to us and attended our meeting. 

I still didn't get a satisfactory answer as to DIR's failure to keep accurate statistics.  Mr. Verre again  blamed it on their antiquated computer system.  He couldn't explain why the person in charge of statistics at DIR had been supplying me with statistical information the past two years, and he wouldn't comment further on whether I had been given correct numbers or not.   I still had the impression that this was information DIR did not want to disclose to us.  However, they did listen to our main complaint that DIR was ducking its responsibility  to investigate insurer violations when it tells us that it can't investigate if we have also requested a hearing before a Department of Administration hearings officer.   

Perhaps the most encouraging bit of information I learned during this meeting was that 80% of the DIR investigators are new.  If the new chief administrator who replaces Don Jayne has a pro-active approach to investigating the complaints of injured workers who believe that they have been the victim of insurers and TPA's violating the law, then perhaps the DIR system will work as envisioned with these new investigators.

Mr. Verre asked me whether I had an agenda in wanting the statistical information on fines and benefit penalties, implying that I was gunning for a new law at the next legislative session to allow bad faith lawsuits again.  I replied that when the law was passed in 1995 that prohibited bad faith lawsuits and replaced them with the DIR system of administrative fines, I was co-counsel on a bad faith case that was scheduled for trial.  Nineteen depositions had already  been taken  when the Nevada Supreme Court held that the case had to be dismissed after passage of the new law providing for administrative fines and penalties as the exclusive remedy for bad faith.  Madera v. SIIS, 114 Nev. 253, 956 P.2d 117 (1998).  

I told Mr. Verre that bad faith lawsuits are expensive and take years to reach trial.  I wasn't sure that simply allowing bad faith actions was the solution for improper claims handling, although suing an insurer for actual and punitive damages certainly commands an insurer's attention better than a $250 fine and a $5000 benefit penalty.   I told him that what I was hoping for, much sooner than when the legislature meets again in 2015, was a different approach by DIR to enforcing the laws we already have on the books.  We shall see.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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