WCLA MCLE

1. WCLA MCLE • Retirement: Does It Affect Workers’ Compensation Benefits? • Wednesday November 3, 2010 • 12:00 pm to 1:00 pm • James R. Thompson Center Auditorium, Chicago, IL • 1 Hour General MCLE Credit

2. Issues • Keating: What must the Commission do in order for a Plaintiff to maintain a “presumed negligence” case under Section 4(d) of the WCA? • Byrd: What is the effective date of the IWBF and to what dates of accident does it apply? • Other coverage issues as explained by NCCI?

3. Keating v. 68th & Paxton 401 Ill. App. 3d 456 (2010)IL Workers’ Compensation Act • Section 4(d): “Employers who are subject to and who knowingly fail to comply with this Section shall not be entitled to the benefits of this Act during the period of noncompliance, but shall be liable in an action under any other applicable lawof this State. In the action, such employer shall not avail himself or herself of the defenses of assumption of risk or negligence or that the injury was due to a co‑employee. In the action, proof of the injury shall constitute prima facie evidence of negligence on the part of such employer and the burden shall be on such employer to show freedom of negligence resulting in the injury. The employer shall not join any other defendant in any such civil action. Nothing in this amendatory Act of the 94th General Assembly shall affect the employee's rights under subdivision (a)3 of Section 1 of this Act. Any employer or carrier who makes payments under subdivision (a)3 of Section 1 of this Act shall have a right of reimbursement from the proceeds of any recovery under this Section.     An employee of an uninsured employer, or the employee's dependents in case death ensued, may, instead of proceeding against the employer in a civil action in court, file an application for adjustment of claim with the Commission in accordance with the provisions of this Act and the Commission shall hear and determine the application for adjustment of claim in the manner in which other claims are heard and determined before the Commission.”

4. Keating v. 68th & Paxton 401 Ill. App. 3d 456 (2010)Facts • DA 3-1-07 • Plaintiff Keating falls from porch construction • Defendants: Owner 68th & Paxton; Property management Oglesby management company; employer Gonzon Construction Inc. • 4th Amended complaint added “presumed negligence” count under Section 4(d) • Defendants filed motion to strike: “legally insufficient” because IWCC had not made the “requisite finding” that defendants were employers and had knowingly failed to insure WC liability • Circuit Court (judge Thomas Quinn) grants the motion

5. Keating v. 68th & Paxton 401 Ill. App. 3d 456 (2010)Appellate Court Decision • “As to the substance of plaintiff's argument, we note that this is a case of first impression in Illinois that requires us to interpret section 4(d) of the Act. Because this is a matter of statutory construction, we apply a de novo standard of review.” • “(W)e find that the legislature intended for the Commission to determine whether employers subject to the Act have failed to comply with its regulations and, if so, what penalties apply. ..only after a panel of commissioners conducts a hearing in accordance with due process principles and determines that the employer failed to provide the requisite insurance.. Then, if the employer is deemed noncompliant, the Commission still must determine whether its noncompliance was knowing or negligent for purposes of imposing the appropriate penalty.” • “Accordingly, the Commission, and not the circuit court, had jurisdiction to determine whether plaintiff could seek relief under 4(d) . Plaintiff did not allege that the Commission made the requisite determinations about the applicability of the Act and defendants' compliance with it that would permit plaintiff to pursue relief in the circuit court… Thus, even taking the factual allegations contained  in plaintiff's complaint as true for purposes of evaluating the sufficiency of the complaint, the circuit court lacked the power to evaluate them. Therefore, by themselves, those paragraphs of the complaint were legally insufficient and were properly stricken.”

6. Keating Questions • Does Commission have procedure for conducting “Keating hearing”? • Statute of limitations for 4(d) civil case? • Duty to advise Petitioner about 4(d) civil case? • Election of remedies? • Coverage issues? Does GL apply? • Can 1(a)3 statutory employer bring 4(d) civil case on Petitioner’s behalf?

7. Injured Workers’ Benefit Fund (IWBF)IL Workers’ Compensation ActSection 4(d), added by PA94-277, eff. 7-20-05 • “Penalties and fines collected pursuant to this paragraph (d) shall be deposited upon receipt into a special fund which shall be designated the Injured Workers' Benefit Fund, of which the State Treasurer is ex‑officio custodian, such special fund to be held and disbursed in accordance with this paragraph (d) for the purposes hereinafter stated in this paragraph (d), upon the final order of the Commission. …Moneys in the Injured Workers' Benefit Fund shall be used only for payment of workers' compensation benefits for injured employees when the employer has failed to provide coverage as determined under this paragraph (d) and has failed to pay the benefits due to the injured employee. The Commission shall have the right to obtain reimbursement from the employer for compensation obligations paid by the Injured Workers' Benefit Fund. Any such amounts obtained shall be deposited by the Commission into the Injured Workers' Benefit Fund. If an injured employee or his or her personal representative receives payment from the Injured Workers' Benefit Fund, the State of Illinois has the same rights under paragraph (b) of Section 5 that the employer who failed to pay the benefits due to the injured employee would have had if the employer had paid those benefits, and any moneys recovered by the State as a result of the State's exercise of its rights under paragraph (b) of Section 5 shall be deposited into the Injured Workers' Benefit Fund. The custodian of the Injured Workers' Benefit Fund shall be joined with the employer as a party respondent in the application for adjustment of claim. After July 1, 2006, the Commission shall make disbursements from the Fund once each year to each eligible claimant. An eligible claimant is an injured worker who has within the previous fiscal year obtained a final award for benefits from the Commission against the employer and the Injured Workers' Benefit Fund and has notified the Commission within 90 days of receipt of such award. Within a reasonable time after the end of each fiscal year, the Commission shall make a disbursement to each eligible claimant. At the time of disbursement, if there are insufficient moneys in the Fund to pay all claims, each eligible claimant shall receive a pro‑rata share, as determined by the Commission, of the available moneys in the Fund for that year. Payment from the Injured Workers' Benefit Fund to an eligible claimant pursuant to this provision shall discharge the obligations of the Injured Workers' Benefit Fund regarding the award entered by the Commission. “

8. Norvel Byrd v. McGary Landmark Realty & IWBF10 IWCC 0798 • DA’s: 9-5-03 & 1-20-04 • IWBF created by PA 94-277, eff. 7-20-05 • Applications amended 6-4-07 to add IWBF • IWBF filed Motion to Dismiss: effective date • Procedural amendments can be applied retroactively, substantive ones cannot • “The Arbitrator finds amended Section 4(d) of the Act, effective 7-20-05 does not apply retroactively to these claims. As such, the Arbitrator grants the Fund’s motion to be dismissed as a Respondent in these claims.” • Unanimously affirmed and adopted by IWCC, 8-19-10