What About My Credit?

January 2019

By: Francis M. Brady and Farrah L. Hagan

Some years back, the Appellate Court taught an anatomy lesson. The shoulder, it concluded in the case of Will County Forest Preserve v IWCC, is not part of the worker’s arm, but of her body as a whole. At first blush, that holding’s effect on the issue of credit seems to be for- ward looking: since shoulder injuries were reclassified from specific loss awards to recoveries under the whole person, they are no longer available to offset future accidents.

But while Will County clearly has that impact on damages paid after its date, less clear is how it operates on compensation recovered for upper extremity injuries before its decision. Specifically, can a Respondent use the prior settlement or award to reduce the value of a claim for the same arm the worker brings after Will County? Take, for example, a situation involving a worker diagnosed with SLAP lesion and tears of the labrum and rotator cuff due to a post-Will County accident. The worker’s attorney insists the case is worth full value. Investigation, however, reveals the worker got 25% loss of use of the arm in a settlement before Will County. Does that prior recovery afford leverage to negotiate the worker’s lawyer off his full value demand?

The Commission has said no. Relying on the fact that the second injury comprised his shoulder which, per Will County, was now compensated as a part of the whole body, the Commissioners held unanimously no credit attached.

What if the second accident is to a different part of the upper extremity, the elbow, say? The Illinois Appellate Court determined the value of that injury should be reduced by a prior recovery of permanent loss to the same arm. The Court noted with approval the notion that Will County “nowhere held the ‘elbow’ was not a part of the ‘arm’ for purposes of compensation.” To the contrary, “biceps injuries which occurred at the elbow (fall) within the scheduled injuries listed in (Section) 8(e) of the Act.”

The worker next argued that even if this were so, and thus his present injury settleable on the basis of an arm and not the whole person, its value could not be reduced by his earlier recovery He insisted to the Court that because his first settlement recovery was for a shoulder injury, it generated no credit after the Will County decision. The Court rejected this argument finding that the Lump Sum Settlement Contract in the prior case provided the proceeds represented 30% loss of use of the left arm. Given this language, the Court concluded the Act specifically afforded a credit against the second accident.

The lessons to be learned are twofold:

• First, it’s essential to scour a worker’s full litigation background; and,
• Second, understanding the diagnosis affixed to the second, post-Will County injury, is critical to deploying the credit.

Feel free to contact the authors to discuss how to apply these two lessons to resolving claims.