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Department of Labor preparing for Defense Base Act to be replaced by new system April 11, 2013

Posted by Aaron Walter in Uncategorized.
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Buried deep within the Department of Labor’s 2014 Budget request lies the first information publicly available on the proposed “reforms” to the Defense Base Act.

The document indicates that the DOL has requested $2 million to implement the new system called the Overseas Contractors Compensation Act (OCCA). This is the first we have heard of this name and it is a piece of legislation that apparently be proposed in the near future.

It is described as a “DOL-administered” program where injured claimant’s would be paid from a collective fund. The thought is obviously to streamline the program and make it cheaper to administer.

Under the current set up, Defense Base Act claimants are entitled to benefits under the Longshore and Harbor Workers’ Compensation Act. It appears this proposal will pull Defense Base Act claims away from the Longshore Act and into a new set of rules and procedures.

This could be a great thing for claimants. Perhaps the new system will more thoroughly compensate claimant’s for their injuries. However, there are reasons to be concerned. First, the Longshore Act has many claimant friendly elements that could be thrown away in this new legislation. Under the Longshore Act claimants have these advantages:

- an initial legal presumption that their injury entitles them to treatment and compensation that must be rebutted by the defense
- the right to an attorney who is paid by the insurance company if they win benefits
- the right to a trial before an impartial judge who does not work for either side
- the ability to settle then claim with the insurer to “move on” with their lives

The Defense Base Act adds one huge advantage as well:
- Cases covered by the Defense Base Act involve injuries in the “Zone of Special Danger.” This is a legal concept that them simplified says strange things happen in strange places and helps claimants prove “unusual” injuries like PTSD, diseases like Hepititis, and injuries or deaths that would not have happened but for the remoteness of a work location (like the middle of a desert).

If the new laws throw out these advantages then the DOL will be doing thousands of claimant’s a disservice, just to streamline the system and make it cost less. Two examples of streamlined systems where a government agency decides whether you get benefits or not are the Federal Employees Compensation Act (FECA) and Social Security Disability (SSD). Talk to someone who has filed for SSD benefits and see whether they tell you that system was a fair “streamlined” experience.

We will be keeping our eyes and ears peeled for more on the OCCA as details become public.

The Attorney Escrow Accounts and the Prohibition of Commingling Client Funds April 19, 2010

Posted by Herb Chestnut in Uncategorized.
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   Recently, an Illinois attorney who represents a number of DBA clients was arrested on charges of “ … unlawful financial exploitation of an elderly person for allegedly obtaining a check written payable to the 81-year-old victim.”   The case alleges that the attorney deposited a check made out to a client into his own account.  Bear in mind that this attorney has not been convicted of the allegations at this point and, under our laws is innocent until proven guilty.  However, the story here is a good opportunity to explain the reason attorney’s have escrow accounts and the prohibition against commingling funds. 

          Most states and the American Bar Association have rules which read something like the one here in Georgia: “A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation seperate from the lawyer’s own property.  Funds shall be kept in a separate account maintained in an approved institution as defined in Rule 1.15(III)(c)(1).”  Georgia Rules of Professional Conduct.  The account referred to is called an “escrow” or “trust” account.  Its basic purpose is to create a separate depository for funds of a client or funds which contain both client and attorney funds.

          An example of the escrow account’s use would be in a situation where and insurance company issues one check which included a client’s proceeds of a settlement and attorney fees and costs.  In that situation, since the check includes client property in addition to moneys payable to the attorney, it would have to be deposited in a separate account, an escrow account, before distributed.  After the check clears the bank and the funds are verified, the attorney will disburse the funds in separate checks, one to the client and one to himself.  When handled in this manner, it is easily determined where the fund were dispersed.

          Often, a client is confused when they have to wait an additional period of time to receive settlement proceeds.  However, even though this procedure take a few extra days, it protects the client and the attorney and creates a record of each transaction which can be easily audited or checked at a later time. 

          It is fair to say that the case referenced above involved more than simply the deposit of funds into the wrong account.  According to the article, the attorney received a check in excess of $137,000 in 2006, deposited it and, at the time of the article, had not disbursed any funds to the client. 

          Generally, any check representing funds belonging jointly to a client and an attorney will have the client’s name on it.  This requires the client to endorse the check before it is deposited into the escrow account.  It is our firm’s practice to give a copy of the check which the client endorses to the client so that there is no doubt as to the amount of the check and so that the client can have a record of the funds for their file.  At disbursement, any fees, costs or other deduction from the client’s proceeds should be disclosed and the client should be given a accounting of the individual costs being assessed.  There should be a writing in the file acknowledging the distribution of the funds with a copy of this accounting being provided to the client.  When handled in this manner, all transactions are documented and easily verified if a question arises at a later date.

          Before you agree to a settlement, it is necessary to ask several questions so that there will be no unpleasant surprises when the final distribution takes place.  First, ask your attorney if there will be separate checks representing your proceeds and the fees and costs.  If so, will it be necessary to deposit your check into an escrow account.  If that will be necessary, what additional costs/fees come out of your proceeds and how long will it take for the funds to clear.

          If all proceeds are paid in one check, ask your lawyer what the net proceeds will be; that is, what will you receive after all fees, cost, medical and other expenses are paid.  Finally, request a copy of the check deposited, front and back, and ask in what account the check will be deposited.  If the answer is not an escrow of trust account, there may be problems.

          In DBA cases, the checks are generally separate so these problems may not arise.  Also in DBA cases, the client’s check is rarely sent to the attorney and there is no need for an escrow deposit.  However, if the situation arises, there should be documentation for every deduction taken.  If you have questions of your attorney, ask them.  The great majority of lawyers follow the ethical rules and will not risk losing their licence to practice by commingling funds.  Therefore, an attorney will want you to be satisfied that you are aware of the reason for every deduction from your funds so that there will be no questions in the future.

After 1,300+ Contractor deaths, Military death toll in Iraq does not tell the whole story May 26, 2009

Posted by Aaron Walter in Uncategorized.
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In a Memorial Day Washington Post column, columnist Steven Schooner raises a point familiar to this blog. In media coverage of the wars in Iraq and Afghanistan, the more than 1,000 civilian contractors killed, and nearly 29,000 injured are generally portrayed as a footnote, a byproduct of the war like its monetary cost.

The columnist notes that contractors should not expect a vote of thanks from President Obama, rather

expect to see contractor personnel in Iraq and Afghanistan continue to be portrayed as expendable profiteers, adventure seekers or marginalized members of society who are not entitled to the same respect or value given to members of the military.

I actually blogged about Mr. Schooner’s March 2007 Houston Chronicle article on the same theme last year.

Below is the new column from May 25, 2009 by Steven Schooner:

Remember Them, Too
Don’t Contractors Count When We Calculate the Costs of War?

By Steven Schooner
Monday, May 25, 2009

 Despite the light that Memorial Day will shine, briefly, on the U.S. death tolls in Iraq and Afghanistan, don’t expect an accurate accounting of the real human cost of our military actions abroad. The numbers you’ll see — mostly likely just under 5,000 fatalities — won’t tell the whole story.

As of June 2008 (the most recent reliable numbers available publicly), more than 1,350 civilian contractor personnel had died in Iraq and Afghanistan supporting our efforts. About 29,000 contractors had been injured, more than 8,300 seriously.

But don’t expect President Obama to remember or thank the contractor personnel who died supporting our troops or diplomatic missions. Instead, expect to see contractor personnel in Iraq and Afghanistan continue to be portrayed as expendable profiteers, adventure seekers or marginalized members of society who are not entitled to the same respect or value given to members of the military.

That portrayal, of course, is neither accurate nor fair. Most contractors perform tasks that a generation ago would have been done by uniformed service members. A significant number of these contractors are former members of the military who believe they’re answering the same call they would have answered had the crisis arisen while they were on active duty.

Many of the victims are Iraqis and other foreign nationals working under U.S. government contracts. But whether or not they are U.S. citizens, the central fact remains: If our military was less dependent on contractors, these fatalities probably would have been of uniformed service members.

An honest, accurate tally is important because the public — and, for that matter, Congress — does not grasp the level of the military’s reliance on contractors in the battle area, nor the extent of these contractors’ sacrifices. Simply put, the contemporary, heavily outsourced U.S. military cannot effectively fight or sustain itself without a significant, if not unprecedented, presence of embedded contractors. In Iraq, our contractor-to-troop ratio has exceeded 1 to 1. The State Department admitted last summer that it could not remain in Iraq without heavy reliance on private security.

An accurate tally is critical to any discussion of the costs and benefits of our efforts in Iraq and Afghanistan. War proponents benefit from the massive contractor presence because it permits them to suggest that our military presence is smaller than what is actually required. And to the extent that the public cares about military fatalities, the human cost of our efforts in Iraq appears much smaller than it would if we didn’t rely so heavily on contractors.

In 2006 and 2007, the contractor death rate climbed dramatically. After much smaller numbers during the first three years of the Iraq war, at least 301 civilian contractors died in 2006. At least 353 civilian contractors died in Iraq in 2007, while 901 U.S. military personnel died there. In other words, in 2007, contractors accounted for more than one in four deaths associated with the U.S. occupation.

If anything, the number of contractor deaths is understated. Last year, for the first time, Congress began to require the Pentagon, the State Department and the Agency for International Development to keep track of how many contractors are working in Iraq and Afghanistan and how many have been killed and wounded. The Defense Department recently conceded that it is trying but is not yet up to the task.

The Labor Department generates but does not publish data quarterly on contractor deaths, but only because insurance claims are filed with its Division of Longshore and Harbor Workers Compensation. (American contractors are required to provide Defense Base Act insurance, which falls under that program.) If a contractor’s family or employer does not seek insurance compensation, that death isn’t counted. There’s no doubt that the allied death toll is significantly higher than reported and that contractors bear a far greater burden in this regard than the public appreciates.

In a representative democracy, public awareness of the human cost of our engagements abroad is critical. If we’re going to tally the human cost of our efforts, the public deserves a full accounting.

The writer, a retired Army Reserve judge advocate, is co-director of the Government Procurement Law program at George Washington University. He was a White House procurement policy official from 1996 to 1998. He published an academic article, “Why Contractor Fatalities Matter,” in the Autumn 2008 issue of the Army War College’s quarterly journal, Parameters.

Read Steven Schooner’s entire article in context at: http://www.washingtonpost.com/wp-dyn/content/article/2009/05/24/AR2009052401994.html

Current Blackwater contractors may continue to work in Iraq for Triple Canopy April 6, 2009

Posted by Aaron Walter in Uncategorized.
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In what does not entirely come as a shock, instead of hundreds of former Blackwater securtiy contractors flooding home the United States or to their home countries upon the completion of their former contracts, it looks like many will simply stay under contracts with rival contractor Triple Canopy. Blackwater recently lost most of its Iraq related security contracts with the US Government, in large part due to significant bad press in the United States stemming from several shootings of civilians in Iraq.

I first read this news in a New York Times article titled “Ex-Blackwater Workers May Return to Iraq Jobs”  The topic is newsworthy on its own, but this article contained an unusual quote from a Blackwater spokeswoman:

An unresolved question is whether Blackwater, recently renamed Xe (pronounced zee), or any affiliated company will profit from the deal. Speculation inside the industry and the Iraqi government has focused on whether Triple Canopy might hire as a subcontractor a company called the Falcon Group, identified in a lawsuit brought by Ms. Burke as a Blackwater affiliate.

A Blackwater spokeswoman, Anne Tyrell, said that Blackwater had no relationship with Falcon Group, whose Web site describes it as an Iraqi-owned company with interests in security and reconstruction. “The people who provide security services abroad are independent contractors,”Ms. Tyrell said. “When their 60- to 90-day contracts with us expire, they can seek employment with whomever they choose.”

That statement is ironic because Blackwater has defended themselves from wrongful death lawsuits by former employees arguing against their classification as independent contractors.  So publicly, these contractors are independent contractors whom Blackwater has no control over, but in court they are direct employees when it suits them to limit benefit/liabilities. Maybe this spokesperson was uninformed, but these words do mean things, and you can’t have it both ways.

Who can I choose as my doctor under the Defense Base Act? March 15, 2009

Posted by Aaron Walter in Uncategorized.
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This is a question I am not asked frequently enough. The answer is simple – under the Defense Base Act you can choose any qualified physician under the sun to treat your injuries. That is a flexibility not offered under most state workers’ compensation systems. For instance, in the State of Georgia, where our office is located, you would only have a choice from a list of doctors your employer posts at your work place. Under the Defense Base Act, depending on the type of injury you suffered, if the doctor you choose is a licensed surgeon, podiatrist, dentist, clinical psychologist, optometrist, osteopath, or chiropractor, then you have made a valid initial choice of physician.

 The reason why I am not asked this question very often, is that most injured contractors only contact an attorney AFTER something has gone wrong with their case, like that their benefits are stopped or reduced or a medical procedure is denied or delayed. One reason why this is unfortunate is that while you have amazing flexibility in choosing an initial physician, those same rules limit your ability to change doctors.

If your first choice of physician refers you to some other specialist, for instance a family doctor who refers you to a orthopedic specialist for a back problem, the insurance company must honor that referral. Also, if your doctor retires, you can choose a new one.

However, outside of those situations, you are pretty much stuck with your first choice. Once a claimant has made his initial, “free choice” of a physicians, he may change physicians only upon obtaining prior written approval of the employer, insurer, or the Department of Labor. It is likely that if you do not like your doctor or what he is telling you, the insurance company probably loves him.

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What rights does the Defense Base Act provide for those with severe bodily injuries? March 13, 2009

Posted by Aaron Walter in Uncategorized.
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The wars in Iraq and Afghanistan have introduced a new range of injuries to standard workers’ compensation – IED attacks, Al Queada rocket attacks, and other war related dangers have resulted in unthinkable internal and external damage, traumatic brain injuries, and Post Traumatic Stress Disorder (PTSD).

Most of the injuries we see coming out of Iraq and Afghanistan are actually of the same nature that we see here in employment in the states – knee injuries like torn knee ligaments or miniscus, shoulder injuries, usually torn rotator cuffs, and back injuries like herniated (slipped), or extruded (ruptured) discs. The human body is fragile and unfortunately there are a select few parts of our bodies that tend to give out under the right/wrong conditions.

Sadly, the dangers of war have introduced new kinds of physical trauma to a system typically reserved for more common problems.  It is important to note that any injured contractor is entitled to:

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