Legislatively Mandated Adr in Colorado Workers' Compensation
| Publication year | 1992 |
| Pages | 679 |
| Citation | Vol. 21 No. 4 Pg. 679 |
1992, April, Pg. 679. Legislatively Mandated ADR in Colorado Workers' Compensation
The 1991 Colorado legislature, in Senate Bill ("S.B.") 218, enacted legislation creating the first state agency alternative dispute resolution ("ADR") program of its kind in the United States. While the emphasis of this article is on mediation under S.B. 218, it also addresses the legislative history of ADR provisions in the Colorado Workers' Compensation Act(fn1) ("Act") and provides an overview on arbitration and settlement conferences. Finally, it offers some practical suggestions to workers' compensation practitioners for the most effective use of ADR to settle disputes and reduce the costs associated with litigation.
The enactment of S.B. 218(fn2) created many changes in the Act. The legislature began its reform of the Act by changing its declaration of legislative intent to that of providing for the quick and efficient delivery of disability and medical benefits to an injured worker "without the necessity of litigation."(fn3)
The many changes made to CRS § 8-43-201 et seq. (Part II of Article 43, concerning settlement and hearing procedures) carry out the legislature's intention of decreasing litigation and, thereby, decreasing the number of cases that go to administrative hearing for resolution. S.B. 218 significantly amended CRS § 8-43-205(1), dealing with mediation, and promulgated an entirely new provision, § 8-43-206.5, which provides for binding arbitration for workers' compensation disputes.
Until its amendment by S.B. 218, the mediation statute at CRS § 8-43-205 had governed only voluntary mediation for settlement of disputes under the Act. However, CRS § 8-43-205(1) now requires mandatory mediation of three designated issues (discussed under "Mandatory Mediation," below) prior to filing an application for hearing. Mandatory mediation of these issues applies to all cases involving injuries which occurred on or after July 1, 1991.
The legislature specifically encouraged voluntary mediation in its amendment of CRS § 8-43-205(1) by stating that "[n]othing in this section precludes parties from voluntarily mediating any dispute in any case."(fn4) It also added the following sanctions:
The director has authority to require any party to the claim to attend mediation conferences. Any party willfully refusing to attend or participate in a mediation conference shall be subject to the penalty provisions set forth in section 8-43-304, to the denial or vacation of a hearing date, and to the assessment of reasonable attorney fees and costs of the opposing party.(fn5)
The other major ADR provision enacted by S.B. 218 was the above-mentioned addition of CRS § 8-43-206.5, dealing with binding arbitration. Senate Conference Committee discussions suggest that this procedure is intended to be used as an alternative to administrative hearings.
The mediation rules of procedure, effective March 1, 1992, are found at Rule XV of the Workers' Compensation Rules of Procedure (at 7 C.C.R. 1101-3). Mediation is a confidential dispute resolution process in which a neutral third party acts to facilitate the settlement negotiations of the parties. Mediation is defined in the Act as
a process through which parties involved in a dispute ... meet with a mediator to discuss such matter or matters, defining and articulating the issues and their positions on such issues, with a goal of resolving such dispute or disputes.(fn6)
In mediation, as distinguished from arbitration or an administrative hearing, the parties (and not the mediator) determine the outcome of the dispute. The nature of mediation as an ADR process(fn7)...
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