Complex. Arcane. Inefficient. Complicated. These are some of the words used to describe the modern workers compensation system.

 

Despite its weaknesses, workers compensation systems are necessary in industrialized nations. Societies have tried other forms of compensation. But those alternatives have been inefficient and have failed to meet society’s goals.

 

This article is for everyone. Injured employees trying to get workers compensation benefits. Attorneys handling their first Virginia workers compensation case. And medical providers trying to help their patients get much needed treatment. I hope you’ll understand why we need workers’ compensation after reading.

 

When Did Workers Compensation Begin?

 

Workers compensation has a long history.

 

Ur-Nammu, a Sumerian King, provided compensation to workers who suffered injuries. That was 2050 B.C.

 

The Code of Hammurabi, dated 1750 B.C., provided compensation to injured workers.

 

Laws in ancient Greece, Rome, China, and Arabia also provided schedules for the loss of a body part. The payment amount depended on the body part lost and the amount of the body part lost.

 

These compensation schedules fell out of favor during the Middle Ages. An injured worker would receive compensation if his feudal lord thought it was appropriate. As you can expect, this system was arbitrary.

 

Official governments weren’t the only ones establishing workers compensation systems. In the 17th century pirates paid fellow pirates injured on the high seas.

 

Common Law and Work Injuries During the Industrial Revolution

 

Most of you have heard the term “common law,” but don’t know where it comes from. Common law systems started to develop during the Middle Ages in England.

 

Common law is law developed by courts, judges, and legal tribunals through their written decisions in individual cases. These decisions have great precedential effect on future cases.

 

The principle of stare decisis is at the center of the common law system. It is the principle that courts should decide cases based on consistent rules so that similar facts lead to similar results. In other words, people should expect consistency from their courts.

 

America is a common law system – with some important exceptions. One of which is workers compensation.
Common law was tough on injured workers because of three defenses. Those defenses were: contributory negligence; the “fellow servant” rule; and, the “assumption of risk” doctrine.

 

Contributory Negligence

 

Under the doctrine of contributory negligence the employer owed no compensation if the worker was in any part responsible for his injury.

 

Even if the employer was 99% at fault, the worker would receive nothing if he was 1% responsible for the injury.

 

The contributory negligence doctrine led to absurd results in some cases. For example, a worker who suffered an injury because he slipped and fell could be found negligent because he slipped

 

Here is a real life example. In Martin v. the Wabash Railroad the court denied compensation to Martin, a freight conductor who fell off a train due to a faulty, loose handrail, because one of his duties as conductor was to inspect the train and make sure there was no faulty equipment

 

Virginia is one of the few jurisdictions that follows the doctrine of contributory negligence. But only in personal injury cases, not in workers’ compensation claims.

 

Virginia is one of the few jurisdictions that follows the doctrine of contributory negligence. But only in personal injury cases, not in workers compensation claims.

 

“Fellow Servant” Rule

 

Under the “fellow servant” rule employers were not liable for a worker’s injuries if a co-worker had contributed to the injuries. This excluded many work accidents and injuries.

 

“Assumption of Risk” Doctrine

 

The “assumption of risk” doctrine was brutal to injured workers. Under the doctrine an injured employee was barred from receiving compensation for his injury if he had signed a contract acknowledging that his employment carried certain risks. These contracts became known as “death contracts.”

 

These defenses were not the only obstacles for injured workers under the common law. Injured workers had to pay filing fees, which many could not afford. And they also had to wait months or even years for their case to wind through court. Few had the means to try to get compensation or to wait to get a resolution.

 

Modern Workers Compensation Takes Shape

 

Otto von Bismarck, the Chancellor of Prussia, enacted the Employers’ Liability Law in 1871. This law provided some protection to workers injured in factories, quarries, railroads, and mines.

 

In 1884 Bismarck passed a law called Workers’ Accident Insurance. This law put in place the first modern workers’ compensation system.

 

Over the years workers received more protections. Public Pension Insurance provided incapacitated workers with a stipend if they were unable to work because of non job-related conditions. And Public Aid provided payment to persons who were unable to work because of disability. The state administered this system.

 

The Prussian system was a great safety net for injured workers. It also established that workers’ compensation was the “exclusive remedy” for injured workers. An injured worker had to pursue benefits through workers compensation. He could not sue his employer in civil court for a work-related injury.

 

The Prussian system has served as the model for workers’ compensation programs around the world. That includes the United States.

 

Britain followed suit next. In 1880 it passed the Employer’s Liability Act. That law got rid of the common law defenses. But it was not a “no-fault” system. An employee had to prove that the employer’s negligence contributed to his injury.

 

Parliament passed the Workers’ Compensation Act in 1897 after a long struggle. Manufacturers fought against the Act but lost.

 

Britain’s Workers’ Compensation Act provided for a private disability system. Unlike the Prussian system, it did not rely only on the state.

 

Other European countries followed suit and enacted workers’ compensation laws.

 

Workers Compensation Comes to America

 

It took longer, but workers’ compensation did come to America.

 

First came the Employers’ Liability Acts in the early 1900s. These weakened the common-law doctrine of contributory negligence.

 

Then came President Taft’s proposed compensation system for workers involved in interstate commerce. This system, along with the Employers’ Liability Acts, were the beginning of workers’ compensation in America

 

Wisconsin was the first state to pass a workers’ compensation law. That happened in 1911. That same year, nine more states passed workers’ comp regulations. By 1948 every stated had workers’ comp regulations on the books.

 

The medical community was hesitant about workers’ compensation at first. But it has come to accept the system – especially in states where medical providers can command higher rates for treating workers’ comp patients. Some doctors make most of their income through workers’ compensation.

 

How are American Workers' Compensation Systems Structured?

 

Though every state’s system is different, they are all modeled on the Prussian system.

 

Workers’ comp is “no fault” insurance. We have accepted that industrial accidents happen. And our workers’ compensation systems are supposed to deal with them efficiently. Though that doesn’t always happen.

 

Workers’ compensation benefits employers because they do not have to worry about large jury verdicts in civil court. Employees can sue third parties who caused the work accident, but the employer gets reimbursed from those proceeds. This eliminates double dipping.

 

Employers fund American workers compensation systems. They either self-insure or buy commercial insurance. Some employers do not have to buy workers compensation insurance because they are too small or because of the nature of their work

 

State legislatures have passed laws forming legislative boards or commissions. These executive agencies oversee the workers’ compensation system in that state. They also interpret the law and pass rules and regulations. In Virginia the Workers’ Compensation Commission handles claims for industrial accidents and occupational diseases.

 

What Does the History of Workers Compensation Teach Us?

 

Our workers’ compensation systems are imperfect. They need reform and have a long way to go before they provide adequate benefits for injured workers, including vocational rehabilitation. But they have been somewhat successful in helping injured employees and their families. And they are an improvement over past systems for compensating injured workers.

 

What do changes do you think need we should make to our workers’ compensation systems? Call or e-mail Virginia workers compensation lawyer Corey Pollard and tell him.