Those in claims management agree on one thing — litigation, or even attorney representation, leads to greater claims and expense costs than would otherwise occur. And in Workers' Compensation circles, an attorney may actually reduce the employee's compensation rather than add to it.

This may occur because:

• The statutory benefits are clear and cannot be increased for any reason, and an attorney receiving these benefits reduces the amount of money remaining for the employee,

• The claimant's attorney is inexperienced in Workers' Compensation and may settle for less than the adjuster would have otherwise settled.

The reduced payment to the employee or a liability claimant may also occur because claimants may try to negotiate a settlement themselves initially but hire an attorney later in the process. If the claimants eventually pay the attorney a percentage of the full settlement rather than just a percentage of the incremental award created by the attorney's involvement, then the claimant's financial outcome is reduced.

This does not mean there is no place for claimants to obtain legal representation. Some insurers, third-party administrators and companies have inadequately or improperly managed claims, causing some claimants or plaintiff's attorneys to view insurers negatively. Some claims are appropriately denied and a claimant's disagreement with the denial will lead to legal representation.

Confusing process

Employees or claimants with bodily injury claims may seek legal representation, especially if they fear they do not understand enough about the process to effectively present their case and negotiate a settlement themselves. Those in the claims arena understand what is needed to present a claim, but it is a confusing process for anyone who has not been trained in claims management.