|Center for Injured Workers, Inc.
A Non-Profit Corporation
When Texas Legislators first started workers’ compensation in 1913, they understood that workers’ compensation legislation had to
carry out its evident purpose of compensating injured employees and their dependents for compensable injuries sustained in the
compensation insurance carrier agreed to compensate the employee for injuries sustained in the course of employment.
The 1917 Texas law created the Texas Industrial Accident Board (TIAB) to administer workers' compensation laws in the state. As
time went by, insurance carriers started abusing the provisions of the 1917 Act and plaintiff attorneys made sure that injured employee
workers’ compensation benefits were not jeopardized by the shady tactics employed by powerful insurance defense lawyers. Plaintiff
attorneys won landmark decisions in 1929, 1936, and 1939 over the injured employees’ right to workers’ compensation benefits, the
right to speedy, equitable relief for injuries sustained in the course of employment, and the basis for the constitutionality of the
Workers’ Compensation Act. Southern Casualty Co. v. Morgan, 12 S.W.2d 200, 201 (Tex.Comm’n App. 1929, judgm’t adopted); Texas
Employers’ Insurance Ass’n v. Wright, 128 Tex. 242, 97 S.W.2d 171, 172 (1936); and Huffman v. Southern Underwriters, 133 Tex. 354,
359, 128 S.W.2d 4, 6 (1939).
The continued reckless care, haphazard handling of claims, and unreasonable expedience and faithfulness in fulfilling agreed upon
provisions by insurance carriers gave Plaintiff attorneys additional significant victories in 1947, 1948, 1960, 1983, and 1987 over the
duty of insurance carriers to deal fairly and in good faith with injured employees in the processing and payment of claims. Montgomery
Ward & Co. v. Scharrenbeck, 146 Tex. 153, 157, 204 S.W.2d 508, 510 (1947) (emphasis added); Burroughs v. Bunch, 210 S.W.2d 211,
214-215 (Tex.Civ.App.-El Paso 1948, writ ref’d); American Standard Life Ins. Co. v. Redford, 337 S.W.2d 230, 231 (Tex.Civ.App.-Austin
1960, writ ref’d n.r.e.); English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983) (Spears, J. concurring); and Arnold v. National County
Mutual Fire Ins. Co., 725 S.W.2d 165, 167 (1987).
The intent of carriers to abuse injured employees by using powerful defense attorneys and everything else they had at their command
were diffused by Plaintiff Attorneys who demanded that insurance carriers deal fairly and in good faith when handling injured
employees’ workers’ compensation claims. The tremendous losses incurred by greedy insurance carriers caused a sharp rise in the
cost of workers’ compensation premiums to employers.
The carriers complained to the Texas Industrial Accident Board (TIAB) that the greed of Plaintiff attorneys was the cause of the sharp
rise in the cost of workers’ compensation in Texas. The insurance carriers also advised their lobbyist to pressure the State
Legislators to reform the workers’ compensation act and aired massive TV and other media to portray plaintiff attorneys as the villains
responsible for the rising cost of employers’ workers’ compensation premiums.
Legislators knew that the rising cost of workers’ compensation was not caused by plaintiff attorneys as the insurance carriers
charged. If that had been the case the State Legislators would have enacted provisions in the Act that would have punished
unscrupulous attorneys. But that was not the case. Carriers demanded a way to legally delay and/or deny workers’ compensation
benefits to injured workers in order to reduce the cost of workers’ compensation.
The Legislators found a way to make it hard for injured employees to find a plaintiff attorney who would take their case. They wrote a
provision in the Act which mandated that legal fees for attorney services had to be paid out of the injured employee’s indemnity
benefits. Other provisions made it easy for a carrier to dispute a claim as not being compensable; thereby preventing an injured
employee from entitlement to indemnity benefits. If the injured employee was not being paid indemnity benefits, they could not be
charged any attorney fees. No attorney fees meant that representation from a plaintiff attorney was not possible.
Next, they needed to insure that those few injured employees who could find an attorney would have great difficulty in finding a way to
take their case all the way to the Supreme Court of Texas. The Legislators included a requirement in the provisions that mandated that
the Act’s goal was to produce a cost-effective program to reduce workers’ compensation premiums to employers, not to provide
medical-effective benefits or indemnity benefits to injured employees. This meant that the liberal construction of the provisions of the
Act had to favor the insurance carrier.
The Texas Legislature adopted the Texas Worker's Compensation Act (Senate Bill 1) on Dec. 13, 1989. The Act was immediately
challenged in court but it was upheld eventually by the Texas Supreme Court and became effective on January 1, 2001. The Texas
Workers' Compensation Commission (TWCC) was created under the Act to administer the workers' compensation system, replacing
the Texas Industrial Accident Board. The TIAB failed to please the insurance carriers.
Injured employees would now face the insurance carriers’ brutal, powerful defense attorneys without plaintiff attorney representation.
The Texas Legislators tried to soften their hideous intentions by allowing injured employees to be assisted free of charge, not by a
TWCC attorney, but by an overloaded and inadequately trained TWCC Ombudsman. How did Texas Legislators justify that an
Ombudsman who cannot represent an injured employee was equal to a licensed, high power insurance carrier attorney? It was a
farce. Ombudsmen were no match for the carriers’ autocratic Czars. The Legislators continued yielding to the unsatiable greedy
appetite of unscrupulous workers' compensation insurance carriers. Injured employees were forsaken.
In Fulton v. Associated Indemnity Corp., 46 S.W.3d 364, 370 (Tex.App.-Austin 2001), the Supreme Court stated: “We liberally construe
workers’ compensation legislation to carry out its evident purpose of compensating injured workers and their dependents.” The Court
stressed that it looked to Texas Workers’ Compensation Commission v. Garcia, 893 S.W.2d 504 (Tex. 1995), for guidance. To date,
the Supreme Court of Texas has held to the liberal construction in favor of the injured employee, but TWCC turned a blind eye and
favored insurance carriers because they pay for TWCC operations. Section 403.002 of the Act reads: “each insurance carrier, other
than a governmental entity, shall pay an annual maintenance tax to pay the costs of administering this subtitle and to support the
prosecution of workers' compensation insurance fraud in this state.” But insurance carriers were not satisfied. They wanted more.