New bill spells trouble for workers’ compensation lawsuits

HB 2455 would no longer allow workers to take insurance companies to court over disputed claims

A new bill that has just passed the House Committee on Insurance and Retirement could have major consequences for workers in Arizona, according to CBS5. House Bill 2455, which is now headed to the Rules Committee, would bar workers from taking insurance companies to court over disputes involving denied and delayed workers' compensation claims.

Commission would provide sole judicial remedies

Under current law, if a worker who has been injured in an accident has a dispute with his insurance company, he can have that dispute heard by a judge and jury. The court can then decide the validity of the worker's claim and order the insurance company to payout on a claim if it finds the insurer acted in bad faith.

HB 2455, however, would no longer make it possible for workers to take their grievances to court. The bill states that "the commission has exclusive jurisdiction as prescribed in this section over complaints that arise out of claim processing."

The "commission" referred to in the bill is the Industrial Commission of Arizona. In effect, the law would mean that workers could only have their cases heard before the commission rather than in front of a judge.

Critics say law will deny worker' rights

Critics of the bill say it ends up giving too much power to insurance companies while denying the rights of workers to receive fair compensation for their injuries. By disallowing workers from pursuing lawsuits against insurance companies over denied or delayed claims, those critics contend that workers will lose an important legal avenue towards gaining compensation for injuries.

Furthermore, even if the Industrial Commission sided with the worker and ordered the insurance company to pay, the maximum penalty the commission could impose on the insurer is $10,000 to the state and $5,000 to the worker.

Even the Industrial Commission that would be given greater powers under the new law is not entirely happy with the proposed changes. A representative from the commission claimed that it currently does not have enough staff to deal with the extra work that would result if the bill passed into law.

Dealing with "bad faith" insurers

The above bill shows just how frustrating dealing with insurance claims can be for many Arizona residents. Many people are understandably disappointed to find that their insurer will deny or delay payment on a claim. Such "bad faith" practices on the part of the insurer can leave the person seeking compensation struggling with medical bills, not to mention the stress associated with their injuries. Any person who is having trouble getting the claim they deserve from their insurer should seek out legal advice as soon as possible. A lawyer who has experience dealing with insurance claim disputes is in the best position to offer guidance about what legal options are available.

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