Workers’ Compensation Awards: Why Are They Often Less Than Personal Injury Awards?

I am sure most of you have stayed up late at night watching a Brewers/Bucks/Packers/Badgers/Golden Eagles game and seen celebrities espousing the wonderful service of a local law firm. Or maybe you are lucky enough to have memorized one of the rhyming catchphrases some of those commercials utilize.

Our favorite part of these commercials are the “client testimonials” where you hear all about the thousands upon thousands of dollars these attorneys obtained for their clients. While those monetary awards are great for them and their attorneys, when it comes to setting realistic client expectations in the Workers’ Compensation arena, these testimonials make lawyering difficult.

So, how is it that one person, let’s name him Car Driver Joe,gets $1,000,000.00 for an injury suffered in a car accident and another person, let’s name him Worker Joe, gets $50,000.00 when he suffers the same injury at work? The answer goes back to 1911.

In 1911, Wisconsin became the first state to adopt a comprehensive Workers’ Compensation system. The general idea behind this law was that employers would trade their common law defenses (e.g. assumption of risk, contributory negligence, or fellow servant rule) for certain and limited liability. Employees, for their part, would trade their ability to obtain a large judgment against their employer for the certainty of a limited recovery proportionate to their injury. You can think of this as the “Great Compromise of Workers’ Compensation.” It essentially takes the “fault” of the accident out of the equation.

Importantly for both sides, the damages for Workers’ Compensation injuries are limited in terms of “what” you can be awarded. In Workers’ Compensation there are no awards for future wage loss or pain and suffering. There also are no punitive damages (damages meant to punish the “wrongdoer”)in Workers’ Compensation as there may be in other civil actions. That is why, in a car accident, Car Driver Joe may be awarded a cool $1,000,000.00 for the same injury that Worker Joe gets $50,000.00. Even if both Joes suffer the same injury and spend the same amount of time recovering, the damages available in Workers’ Compensation are limited in ways that tort actions, here a car accident, are not.

After a few decades of ironing out some details, Workers’ Compensation was made compulsory for virtually all employees and employers in 1931, giving us the system we have today.

Next time we will take a look into what it means to have a “Scheduled Injury” in Wisconsin and what that means in terms of what you may be awarded in a Workers’ Compensation action. Stay tuned.