![[95 DELEGAL
HEADING]](./95leghed.gif)
The Oregon workers' compensation insurers and self-insured
employers paid almost $27.4 million for attorney salaries and
other costs of legal services in calendar year 1995. These
costs are primarily to defend the insurer against claims or
benefits believed to be unwarranted, but also include fees paid
to represent the insurer in responsibility disputes (where the
outcome may not directly affect the claimant) and for advising
the insurer in activities outside of litigation (such as
negotiating a claim disposition agreement). These costs are
distinguished from fees paid to attorneys representing injured
workers.
Table 1 summarizes these costs. The bottom row of this table
depicts the breakdown of costs by category: 60.7 percent of all
costs were for retained counsel, compared to 62.8 percent in
1994.
![[TABLE 1]](./95legf1.gif)
The graph below depicts total defense legal costs for the past
six years, the only period for which data are available.
![[TABLE 1]](./95legf2.gif)
All insurer classifications (Table 2, column 5) contributed to
the 6.5 percent increase in 1995, as did all cost categories
except for non-attorney salaries (which showed a 1.1 percent decrease). Other in-house costs showed the largest
increase, both in terms of absolute value ($678,000) and
percentage change (30.9 percent). Since the number of claims
decreased slightly in 1995, it appears that the reason for the
overall cost increase is that each claim cost more to defend.
![[TABLE 1]](./95legf3.gif)
For each insurer classification, information on share of costs,
number of claims, in-house attorney staff, in-house costs as a
percentage of all costs, and 1994-1995 cost changes are given in
Table 2. SAIF's share of costs climbed by one percentage point
from the 25 percent of the past two years; self-insured
employers' share dropped one point (column 1). The number of
claims (column 2) indicates the number of claims that had
litigation during the year; this number has fallen each year
since 1990. The numbers of in-house attorney staff (full-time
equivalent, or FTE) and the percentages of all costs that are
composed of salaries to legal staff and other in-house costs are
given in columns 3 and 4, respectively. SAIF continued to rely
more heavily on in-house legal staff. SAIF also had the
greatest cost increase over 1994 (column 5).
A total of $21,652,000 -- 79.1 percent of all defense costs--
was paid to defense attorneys (attorney salaries + retained
counsel), up 4.9 percent from 1994. (We assume for this purpose
that billings for retained counsel are all attorney fees, but
that is not always the case.)
This report is based on data submitted by insurers and
self-insured employers as required by ORS 565.388(5). More
information is available from the Department of Consumer and
Business Services, Research & Analysis Section.
If you have questions about the information contained in
this document please contact by e-mail or phone:
Russell Reed,
Research Analyst, Research & Analysis, Information Management
Division (503) 947-7343
This document was originally published in December
1996.
Printed form: 440-2314 (12/96/IMD)
Document URL:
http://www.cbs.state.or.us/external/imd/rasums/95legal.htm
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