Navigating the Challenges of California’s Workers’ Compensation Litigation Environment

Over the last three years, California has seen a noticeable shift in the workers’ compensation landscape, and it’s more important than ever for employers to stay informed. One of the most significant trends? A marked increase in litigation, particularly in the form of attorney involvement, particularly with Cumulative Trauma (CT) claims.

Unlike a specific injury that results from a single incident, CT claims involve injuries that develop over time due to repetitive stress or strain. These can include physical tasks like lifting, typing, or standing for long periods. CT claims are often more difficult to pinpoint and are commonly reported after an employee has left the company, making them more likely to involve legal representation.

Understanding what’s driving these trends helps you make informed decisions that protect both your business and your people. The good news? There are practical, proven steps you can take to help reduce your risk exposure and support better outcomes.

Key Insights from WCIRB:

• 40% of indemnity claims involve attorneys—significantly higher than other states.
• Litigated claims are often CT claims, frequently filed after an employee leaves the company.
• CT claims now make up nearly 16.1% of all claims, nearing record highs.
• Attorney-represented claims average over $93,000—3x the cost of claims without attorneys.
• These claims also take 2-3x longer to resolve (750 days vs. 300 days for non-litigated claims).

5 Best Practices to Reduce Litigation:

1. Maintain a Safe Work Environment
   • Proactively manage risks, conduct safety training, and comply with Cal/OSHA.
   • Stay alert to unknown individuals engaging with employees at the work site.
   • Document injury-free shifts and keep safety records current.
2. Foster Communication & Return-to-Work Support
   • Stay in touch with injured employees and claims staff.
   • Conduct regular wellness check-ins, even informally, to support employee well-being.
   • Develop a return-to-work program with modified duties to facilitate recovery and integration
3. Ensure Proper Injury Reporting
   • Train supervisors, report injuries promptly using your carrier’s reporting tools.
   • Immediate reporting leads to better investigation and outcomes overall.
   • Notify your insurer promptly of layoffs, closures, or unusual workplace patterns.
4. Monitor for Fraud
   • Be aware of fraud red flags, gather documentation, and report concerns to your carrier promptly.
   • Keep detailed, up-to-date records of workplace incidents and injury-free days.
5. Prevent Retaliation Claims
   • Train management on anti-retaliation laws and ensure all employment actions are legitimate and documented.
   • During exit interviews, ask about unreported injuries or current treatment related to work

Final Thoughts

Rising claim costs and longer resolution times are certainly challenges, but they’re not beyond your control. With thoughtful planning and support, employers can build a stronger foundation that promotes safety, transparency, and trust.

Have questions about your current workers’ comp program or claims strategy? Reach out to your M&G Advisor or Account Manager. We’re ready to help you move forward with confidence.