Workers’ compensation cases take many forms and cover myriad workplace injuries. In this episode, guest Christopher Hug dives into one very specific area, maritime industrial accidents, injury, and compensation.
Hug specializes in maritime industrial cases, often under the Longshore and Harbor Workers’ Compensation Act and the very specific Defense Base Act, a World War II creation that covers workers on overseas assignments under contract to the military.
The Defense Base Act is especially interesting in that it covers workers in all fields on military installations, from mechanical workers to teachers or even dentists and can include both physical and emotional disability. Compensation is most often handled through private insurers.
In addition, Hug explains case timelines, representation across jurisdictions, and how lawyers are compensated for their representation.
Special thanks to our sponsors, PInow and MerusCase.
Judson Pierce: Before we get started, we’d like to take a moment to thank our sponsors, MerusCase and PInow.com.
Intro: This is Workers Comp Matters hosted by Attorney Alan S. Pierce. The only Legal Talk Network program that focuses entirely on the people and the law in workers’ compensation cases. Nationally recognized trial attorney, expert and author, Alan S. Pierce is a leader committed to making a different with Workers Comp Matters.
Judson Pierce: Hello and welcome to another edition of Workers Comp Matters. This is Judson Pierce. I’m pleased to be joined by my father and original host of this program, Alan Pierce. From Salem, Massachusetts on today’s edition of Workers Comp Matters, we are delighted to have Attorney Chris Hug as our guest. Chris is a graduate of Middlebury College as well as Suffolk University Law School. Chris has been active in representing injured employees since 1985 with a strong emphasis on the marine and maritime claims and claims under the Longshore and Harbor Workers’ Compensation Acts as well as what we’re here to talk about today, the Defense Base Act. Thank you so much for being with our audience today, Chris.
Christopher Hug: Thanks so much for having me. I appreciate it.
Alan S. Pierce: Yeah, Chris. This is Alan, good to talk with you again. I guess to really kick this off, tell us what the Defense Base Act is and how it came about and why?
Christopher Hug: Thank you, Alan. The Defense Base Act was created in 1941 as a direct result of United States’ involvement in World War II. It became a political and practical necessity for United States to establish a presence in various friendly countries, allied countries around the world more particularly for the purpose of building airbases and army bases and such in places from which we can conduct our wartime activities. And in doing so, not only did the United States send our soldiers abroad and all over the world to be in these places but they also sent civilian contractors, private individuals like you and me to go and assist with the construction, with the operation of, with the development of the infrastructure for these defense base facilities all over, especially in Europe in 1941. And as a result, as in with any type of employment, you will have people that have industrial and work-related injuries.
What the Defense Base Act was created for was to afford civilian contractors, American civilian contractors who were engaged in defense-related employment outside of the United States compensation if they became injured and disabled. And it has all the typical, the Defense Base Act has all of the — it’s a Federal Act. It has all of the bells and whistles and the basic elements of every Workers’ Compensation Act around our country today. It affords a weekly indemnity or a weekly disability check if you qualify for it. If affords you medical coverage for your injuries and for the reasonable and necessary treatment and it also affords vocational rehabilitation services and that is the essence of the Defense Base Act today.
Alan S. Pierce: All right, Chris. Those of us who handle workers’ comp in our individual states, each state has its own Workers’ Compensation Board, Industrial Board, whatever they may call it where any questions, disputes or issues surrounding the payment of compensation or the dial of compensation can be adjudicated. So what is the mechanism that was set up by Congress to create or to utilize a system to handle those type of claims and also oversee the proper equitable delivery of these benefits?
Christopher Hug: The Defense Base Act when it came into being in 1941 literally adopted in its entirety another Workers’ Compensation Act which existed and had existed since the mid-1920s and that Workers’ Compensation Act is called the Longshore and Harbor Workers’ Compensation Act, a Federal Workers’ Compensation Act. It had already been written. It had produced appellate case law and by the time 1940, 1941 came around when instead of writing a new set of laws and rules and regulations and procedures for the creation of this new Defense Base Act,
what Congress did was they literally adopted every single provision of the Longshoreman’s Act and that is 33 United States Code 901. And it is a Federal Act, the DBA is a Federal Act and all of the claims and all of the litigation and all the resolutions are conducted on a federal level, nationally-speaking, not through any local Workers’ Compensation Boards like here in Massachusetts, we have the Department of Industrial Acts and they’ll never see a case litigated under the Defense Base Act or under the Longshoreman’s Act in that particular forum. So where do we go? For instance, we go in Boston. You’d have to start going through the United States Department of Labor, Office of Workers’ Compensation Programs, Division of Longshore and Harbor Workers. That’s a lot of words but it’s a small group of people in each district. In Boston here, their home is in the JFK Building. They are the recipient of an initial claim form under the DBA. If you represent an injured person, there are certain requirements for filing. You have to have certain elements proven at the outset to initiate a claim and you file it at the Department of Labor.
And at the Department of Labor, the equivalent of an initial meeting or a conciliation occurs within about eight weeks, if you’re lucky. It moves a little bit slower than things do on our stateside here in Massachusetts. As a result of that particular informal conference, that’s what they’re called, a recommendation will issue, a written recommendation. And it is just that. It is no more than a recommendation. And good, bad or ugly, when you receive a recommendation as an employee’s counsel, you file an appeal and the next step is you get into the Office of Administrative Law Judges which you will be in front of a real, bonafide federal Administrative Law Judge. In Massachusetts, that’s going to be here in Boston at the Tip O’Neill Building and you will have a full evidentiary hearing where all the procedures and practices that all trial lawyers are familiar with are generally observed.
That Administrative Law Judge will conduct a thorough bench trial and issue a very thorough decision and order on your claim after consideration of all the evidence, you know, the good, bad and the other evidence. Those are the basics of the mechanics of bringing a DBA claim.
Alan S. Pierce: All right. Well, you mentioned Boston. Does the Boston area only cover claims of employees located in Massachusetts or does it cover the region?
Christopher Hug: It covers the region. Maine, New Hampshire, Rhode Island, Connecticut, Massachusetts for sure. I can’t think of any other states that it would cover here in Boston.
Alan S. Pierce: Similarly, around the country. I suspect there are — how many regions do you estimate there might be?
Christopher Hug: A dozen.
Alan S. Pierce: All right. Your office is south of Boston. You’re in suburb of Boston, right? Or are you downtown?
Christopher Hug: I’m downtown Boston.
Alan S. Pierce: Okay. Can you handle a case out of Oklahoma?
Christopher Hug: I could, yes. And I do have particularly Defense Base Act cases from all over the country. They are not fuzzy about bar membership who thinks like that. Wherever you are around the country, they’re very generous about it. So I see Defense Base Act cases coming from all over the place.
Alan S. Pierce: So a typical case would be the injured worker who I guess would be called the claimant or employee, then you have the employer. Is there a private insurance involved or is this government taxpayer money that pay these benefits?
Christopher Hug: No, it is private insurance and the employers are not, you don’t see very many self-insured employers. I have never seen a self-insured and I may be wrong but I don’t believe there are any. You’ll see a lot of AIG on Defense Base Act cases, a lot of Starr Insurance on Defense Base Act cases and some other insurers. There’s 100% coverage on the cases through insurance.
Alan S. Pierce: How long do these cases generally take to resolve, to go through the litigation process? Does it vary so much or is there a general average of time?
Christopher Hug: No, it doesn’t vary that much, at least here. It takes — I will say if the outset representing an injured Defense Base Act employees, it takes way too long. It’s no one’s fault. No one is dragging their feet at the Department of Labor.
They’re just challenged with the quantity of claims and the amount of work that’s involved in processing them fairly. If I represent someone or if you represent someone under the Defense Base Act who has an injury and the insurer is contesting liability or disability or nature and extent of disability or any or all of the above typical defenses and they are not voluntarily (00:10:24). You can file a claim. From the day that you file a claim, you’ll have a hearing order in a year and during that time, your client will go without compensation unless your client has other forms of income. And it’s a hard experience compared to the Massachusetts for instance, our local Massachusetts Workers’ Compensation Act, you can get from the date of the denial of benefits, you can get a shot in front of a judge within about four months right now at a comfort. It’s not that way under the DBA.
Alan S. Pierce: If you’re a grieved, can you appeal further?
Christopher Hug: You can appeal a hearing decision to the United States Court of Appeals here and whatever circuit you’re in which I’ve done. I did my first one back in 1987, I think in the first Circuit Court of Appeals and from there, you can go to the United States Supreme Court if you can convince them that you’re the case and the Supreme Court has heard a few Longshore cases and written some very interesting opinions over the years.
Alan S. Pierce: Have they heard Defense Base cases as well?
Christopher Hug: Not that I’m aware of.
Alan S. Pierce: Interesting. I would assume that the United States since World War II has been in and out of declared conflict of wars or whatever. We can look at Korea. We can look at Vietnam and then we could look I suppose at various iterations of things going on in the Middle East. Can I assume that the, probably going back to the early 90s where things really started to heat up combat-wise? There has been an uptick, a significant uptick in these type of cases.
Christopher Hug: There was a huge uptick when we started off in Iraq back during the first Bush presidency. A huge uptick when we started to establish or attempt to establish presence in Iraq and then onto Afghanistan. In the early 2000s after we planted ourselves in so many of our troops over there, for instance, I think in the early 2000s, Iraq alone had 160,000 American troops in it and something to the tune of 180,000 DBA contractor employees.
Alan S. Pierce: These people actually see in combat and equipped the way soldiers are like a private militia?
Christopher Hug: Yes, some place in between depending on your function. They all are exposed to the hazards of war. So by way of example, many of the clients I’ve represented have come down with mental and emotional and anxiety-related disabilities as a result of some of the things that they’ve seen and some of the fears they have been put through and when they see bombs going off 100 feet away from them. When they’re driving in the convoy and they see something that normally we wouldn’t see. So you see a lot of mental, emotional disability claims, you will not see DBA claims involving combat injuries typically unless there was an attack and there was an explosion or something like that that was ancillary to what they were doing. It’s not very typical. What you will see is a lot of what we see here in our practice in Massachusetts. There are carpenters, electricians, plumbers, teachers, dentists, all sorts of people from all lots of life doing very normal things in a very abnormal place.
And they are also paid extremely well for their service. Typically, a mechanic will go out there for nine months out of the year and have three months off and be paid very generously for the year’s work, $100,000 to $200,000 for nine months’ work. Unfortunately, you have to live in a country that is very, very far away from home and it has its challenges to these people.
Alan S. Pierce: So, if somebody, a high wage earner, let’s say somebody making $4,000 a week as a contractor suffers a totally disabling injury and gets his or her weekly compensation rate under the Defense Base Act based on the Longshore, is there a cap or maximum weekly rate?
Christopher Hug: Yeah, there is. Just like we have in all of our states. There’s currently the cap on Longshore, excuse me, on Defense Base Act benefits and Longshore benefits for that matter. It’s about $1,725 per week and like our state benefits, it’s not taxable.
That is current sealing, it’s tracking closely with our Massachusetts maximum workers’ compensation rates. It’s not very far apart and that’s the most that you can get right now. It goes up every year just like it’s state counterpart does.
Alan S. Pierce: And the amount of years you’re entitled to get?
Christopher Hug: There are a few different categories of disability benefits. In other words, there are a few different categories of weekly — a few different styles of weekly benefits that you can try to draw under the Defense Base Act. The first one is temporary total disability benefits that pays you, not 60% but 66.66 repeating, 66 and 2/3 percent of your average weekly wage at the time of the injury. That’s temporary total disability benefits. There are no time limits on that benefit, zero. The next available benefit is something called temporary partial disability benefits and it is — the figures for temporary partial disability benefits are determined using the same earning capacity analysis subtracted from average weekly wage times 0.6666, et cetera. That benefit is payable for a limit of five years.
Alan S. Pierce: When somebody reaches maximum medical improvement, what happens?
Christopher Hug: A lot of things and it depends on what the body part is but I want to run back quickly to make sure everybody understands that under the Defense Base Act, there is the Cadillac benefits which is permanent and total disability benefits and that is a forever benefit once you get up on it. That is where a lot of my clients end up. It depends obviously on the nature of injury, the severity of your disability and who you are as a person. There are benefits for permanent loss of function to a long list of body parts, the typical ones. Fingers, arms, legs, eyes, ears, sense of smell, things like that. And there is as laundry list of those. It’s good and it’s bad.
If you have an injury to a, it’s called a schedule. If you have an injury to a listed scheduled body parts such as an arm or a leg or a foot or a hand and you become, you reach maximum medical improvement and everyone — just pick a percentage loss of function, a judicial officer would have to. If you can’t agree on it, you have a judge make a decision as to what the loss of function number is. If you are on temporary total disability and you become permanent and partial, in other words, you reach maximum medical improvement for a scheduled body part, you are limited to recovering the amount of weeks afforded for that particular body part times, factoring in the percentage loss of function and the amount of weeks. I can give you an example.
If you complete (00:17:52) an arm amputation, you’re on workers’ compensation. You’re on temporary total disability benefits. An arm amputation will pay 312 weeks of workers’ compensation, okay? They could arguably, arguably pay you out 300 weeks of workers’ compensation without a settlement and then stop weekly temporary total disability benefits.
Alan S. Pierce: Whether or not disabled from working?
Christopher Hug: Yep. Yeah. It’s tough. There are, however, unlike our Massachusetts Workers’ Compensation Act, if you have an injury to a non-scheduled body part and here’s a significant piece of nugget for all of your listeners, the spine is a non-scheduled body part. Therefore, if you have somebody with a herniated disc or any type of spinal lesion that is work-related and that is disabled as a result, you can stay on temporary total disability benefits. You can apply for permanent total disability benefits but most importantly, you can get permanent partial disability benefits forever. Okay? We don’t have that under our State Workers’ Compensation Act. All we have is something called Section 36 which pays you out (00:19:09) of money. Huge strategic advantage under the Defense Base Act to anyone with a spine injury or other injury that is not specifically listed in that schedule.
Judson Pierce: Let’s take a moment and hear a word from our sponsors. We’ll be right back.
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And we’re back with our guest today, Chris Hug, an attorney who concentrates a lot of his practice in the Defense Base Act. We’re learning a lot about what types of benefits are afforded injured workers under the system and you were saying there is a great advantage for injured workers who might have a spinal injury, correct?
Christopher Hug: That’s correct. Yes.
Judson Pierce: Are there other types of advantages from this act than the typical State Comp Act might afford an injured worker?
Christopher Hug: Yes. Yeah, there’s an important one. The DBA was, it adopted the Longshore Act and the Longshore Act by its own terms and by a large body of appellate case law has made a point of being extremely favorable to claimants and injured employees. On balance, it’s a much better place to have your case than any State Farm that I’m aware of in this country. The benefits and the process that you experience with the Department of Labor and with federal judges is far more employee-friendly than our state workers’ compensation experiences. That doesn’t mean you win every time. I’ve lost enough cases to know close calls but you will get, under the Longshore Act and under the Defense Base Act, you the injured employee will get the benefit of the doubt on any tossup on questions of fact and that is established case law.
Alan S. Pierce: Now, in our state workers’ comp experience, attorneys are paid in a variety of ways and each jurisdiction may pay them differently but most, if not all, state workers’ comp jurisdictions do allow the parties to enter into what are known, here are known as lump sum settlements. Other maybe called release and lump sum releases or there are other terms. Can you do something similar under the Longshore Act for Defense Base cases?
Christopher Hug: No, Alan, it’s a good question and it’s important for anybody thinking about these cases to understand. The answer is that you cannot take a percentage or charge a contingency fee on any claims under the Defense Base Act. Here’s how it works. Whether you go to a decision and order or whether you, along the way or after decision and order, you achieve a lump sum, it is incumbent on claimant’s counsel to present a fee petition going back to the first meeting with the client that will be subject to opposition from defense counsel and they can sometimes be picky. In my experience, I’ve never had a battle over that and it’s a type of thing you can usually get a stipulation over if you have a good relationship with counsel. So no contingency fees allowed. Billable time is allowed and the carrier, not the employer, not the employee, the carrier has to pay the any approved fee petition and they can’t complain once it’s an approved fee petition.
Alan S. Pierce: So would this be a function of hours times an hourly rate plus expenses?
Christopher Hug: Yes. And the hourly rate will shift. For work in the first phases of the claim from the date of filing of your DBA claim to the time that you get through the United States Department of Labor, Office of Workers’ Compensation Program, Division of Longshore and Harbor Workers, once you get through that informal conference, up until that time in Boston, you can charge $350 an hour. Once you’re through the Department of Labor and you’re over into the Office of Administrative Law Judges, the rates go up to $400 plus depending on who you are, what kind of case you have, and what kind of results you get. And I’ve not ever gotten any pushback on that from any judges or any defense attorneys, at least on the rate. Sometimes they will bicker over how long it took you to write a letter requesting medical records or something like that but that’s pretty much how it works.
Alan S. Pierce: So conceivably, you could spend a lot of time getting a more limited benefit and be paid a legal fee by the insurance company more than what the injured worker might have gotten?
Christopher Hug: Absolutely, yes. And they tried to point that out in defense of the amount of your bill saying, “Your Honor, this whole case was over an unpaid MRI bill and the attorney’s fee is $30,000.” To which some good arguments can be made to push that back saying what you should (00:25:18).
Alan S. Pierce: Just pay the bill, yeah.
Judson Pierce: They’re sick of that too.
Christopher Hug: Yeah, exactly.
Judson Pierce: Maybe next time, they’ll be a little bit more.
Alan S. Pierce: Well, the term contingent fee, the contingency is winning the case so let me ask you this question that some of our listeners might have, what if you lose the case and it’s not a contingent on winning the case, are you technically able to bill your client?
Christopher Hug: No.
Alan S. Pierce: So there is a sense of contingency to this that you have to be successful to what degree.
Christopher Hug: You have to recover more than a penny. It’s like trying to get the nodes of the football across, just to touch the line of the end zone and that opens the door. It’s like pressing a button. Of course, one of the factors that a judge will look at is the result obtained. So if you have a pair of victory where you happen to be the last man standing and you ultimately didn’t do anything really seriously, meaningful beneficial to your client, the judge will take a look at that. At the same time the judges know that people like us make a living pouring our hearts and souls during these cases that we take risks and it doesn’t always work out, they know that we’re good lawyers and they tend, in my experience, to honor the attorney’s fees. I think they know also quite clearly that the defense attorneys get paid their hourly rate whether they win or lose and I think some of that mentality spills over to their at least treating me kindly over the years. You’ll also get your expenses reimbursed and things like that.
Alan S. Pierce: Like any other workers’ comp case, I assume your employees, your clients are also probably under the Social Security Administration and I take it there’s probably a similar offset of Social Security disability benefits that takes place?
Christopher Hug: Everything is the same. The 80% rule works, it applies here and in Massachusetts, under our state workers’ compensation settlements case, we make a special point of allocating funds to various things in order to avoid an offset. It’s the (00:27:23) allocation.
Alan S. Pierce: Yeah, the life expectancy.
Christopher Hug: Yeah, and I’ve been using that under the — when you submit any settlement petition which is a lengthy, lengthy document compared to our state in Massachusetts, the settlement petitions, I will put in language like that prorating the amount of the settlement over the lifetime because the judges are privy to that. They’re aware of it and they expect to see that in almost some settlements too.
Alan S. Pierce: In what ways does this act differ from say a federal, a FECA type of case? Well, or a federal employee under OWCP?
Christopher Hug: Yeah, like a post office worker?
Alan S. Pierce: Post office, veteran’s administration, a hospital worker.
Christopher Hug: Well, we all have a common friend that handles a lot of those cases. We were all together recently and those cases are tough cases if you’re the injured employee. I don’t have a great deal familiarity with them. They are nothing — you heard me complain a little bit earlier about how much time it takes to get in front of a judge under the Defense Base Act, well, the FECA claims I think are 10 times as challenging.
Alan S. Pierce: Yeah, plus you don’t have an insurance company on the other side. You really have the federal government administering their own benefits. So it’s much more cumbersome for the claimant attorney.
Christopher Hug: It is, and the claimant attorney also has to get paid by the client upfront, hourly. There’s no other way to survive as an attorney taking FECA claims unless you have clients who, as you can picture, if you are out of work, not getting workers’ compensation benefits because it’s being contested and you have to pay a lawyer the X amount of thousands of dollars to initiate your claim and then keep them going along the way.
Alan S. Pierce: Sure. In terms of if someone out there is listening and wants to handle one of these cases and they are licensed to practice only in one state, it doesn’t matter as long as you’re admitted to the bar of the U.S. District Court, right? Or the U.S. Appeals Court, you’re admitted to the bar that practice these?
Christopher Hug: All I can say is I have been allowed to do these all over the country and I’ve never had pushbacks from anybody about it. And I would take and do take referrals from out of state.
Alan S. Pierce: So you don’t have to like go through the pro hac vice process to get special clearance or?
Christopher Hug: I have never had to do that. (00:29:47).
Alan S. Pierce: By the way, in my now 47-year career as a lawyer, I handled only one Defense Base Act case.
Judson Pierce: Wow.
Alan S. Pierce: I don’t know if you’re aware of it.
Christopher Hug: Oh, I think that you did that.
Alan S. Pierce: It made history.
It’s my one and only DBA case. I won’t get into the details but it was death case. My client died from autoerotic asphyxia.
Christopher Hug: I do remember hearing about that.
Alan S. Pierce: Yeah. It had some degree of notoriety. We won it before the ALJ and then it was taken away by the Benefits Review Board very quickly and upheld by the U.S. Court of Appeals. So my widowed client never saw any money but her husband accidentally hanged himself in the course of sexual stimulation on a Defense Base Act, so.
Judson Pierce: That’s it. That’s the end of the episode, right there. What a way to finish it out, Chris, huh?
Alan S. Pierce: I figured, you know what, I could never talk the facts of that case, so why bother?
Christopher Hug: Someday we’ll have a beer.
Alan S. Pierce: We will.
Judson Pierce: Yeah.
Alan S. Pierce: Chris, if somebody wants to contact you, how do they reach out to you Chris?
Christopher Hug: You can reach me at my office. My name is Attorney Chris Hug. My last name is spelled H-U-G. We are at 1 State Street, Suite 1050 in Boston, Massachusetts right across from the Old State House at the intersection of Congress Street and Washington Street and Court Street.
Alan S. Pierce: Site of the Boston Massacre.
Christopher Hug: Yeah.
Alan S. Pierce: Right outside your building.
Christopher Hug: I walked passed it as I will this afternoon when I walk to the train. And my telephone is at area code (617) 227-0400 and I’m happy to help anyone or take questions and obviously take any cases if anybody wanted me to but most importantly, I’m happy to share information with people and do anything I can to help out.
Judson Pierce: I’d like to thank Chris Hug for joining us today. We will be back with you very soon with another new episode of Workers Comp Matters. On behalf of my father, Alan Pierce, I’m Jud Pierce and make it a day that matters.
Outro: Thanks for listening to Workers Comp Matters today on the Legal Talk Network hosted by Attorney Alan S. Pierce where we try to make a difference at workers’ comp legal cases for people injured at work. Be sure to listen to other Workers Comp Matters shows on the Legal Talk Network. Your only choice for legal talk.
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