WORKMEN'S COMPENSATION LAW

VOLUME I

CHAPTER I.

REASONS FOR, HISTORY OF, AND OBJECTIONS TO WORKMEN'S COMPENSATION LAWS.

Sec.

1. Reasons Underlying Workmen's Compensation Legislation. 2. History of Workmen's Compensation Legislation.

3.

Objections of Opponents of Compensation Laws.

§ 1. Reasons Underlying Workmen's Compensation Legislation. Modern industrial development has in the past ten years. impressed the economist and the legislator, more than ever before, with the rightful interest of the general public in industrial accidents.

It has become obvious that our common and statutory law is not sufficiently elastic and is too unscientific and uncertain to mete out even justice to the victims of these accidents. The result is, they frequently become public charges.

Statistics show that approximately forty per cent of the industrial accidents, causing disability are due neither to the fault of the employer nor the employee. Hence, this forty per cent of such accidents and the additional thirty per cent which are due principally, though not intentionally, to the fault of the employee, have not been compensated under our statutory and common law system, for the reason that compensation or damages under that system depends entirely upon establishing the fact of fault or negligence of the employer as the proximate cause of the personal injury. This means that approximately seventy per cent of the wage loss caused by disability, due to industrial or work accidents, is borne by the workers themselves.1

1. Lumberman's Reciprocal Ass'n v. Behnken. (-Tex. Civ. App.-) 226 S. W. 154, 7 W. C. L. J. 363, places the non-compensable personal injuries suffered in industry under the common law system at eighty per-cent.

Though there seems to be no sound reason why they should bear that part of the cost of the finished product of an industry.

"The plain purpose of the compensation law is to make the risk of the accident one of the industry itself, to follow from the fact of the injury, and hence that compensation on account thereof should be treated as an element in the cost of production, added to the cost of the article and borne by the community in general."

The scheme is to charge upon the business through insurance, the losses caused by it, making the business and the ulti mate consumer of its product, and not the injured employee, bear the burden of the accidents incident to the business. The statute contemplates the protection, not only of the employee, but of the employer, at the expense of the ultimate consumer.

The establishment of the fact of fault or negligence of the employer, under our common law system through an action in damages by the injured employe has been one of the thorns of that system, in that it "involves intolerable delay and great economic waste, gives inadequate relief, operates unequally and whether viewed from the standpoint of the employer or that of the employee, it is inequitable and unsuited to the conditions of the modern industry."4

It was with the view to remedy these multifarious evils and deficiencies of our statutory and common law system, as applied

Ind. App.

2. Kenny v. Union Ry. Co., 166 App. Div. 497, 152 N. Y. Supp. 117; In re Dunc..n, (1920), 6 V. C. L. J. 148, 127 N. E. 289; Nadeau v. Caribou Light & Power Co., Me., 108 Atl. 190, 5 W. C. L. J. 238; Scotts Case, -Me.-, 104 Atl. 794, 3 W. C. L. J. 49; Employer's Liab. Assur. Ass'n v. Indus. Comm., Cal. 177 Pac. 273, 3 W. C. L. J. 407. Wangler Boiler Co. v. Indus. Comm. Ill -1 122 N. E. 366, 3 V. C. L. J. 617; Doey v. Clarence P. Howland Co., 120 N. E. 53, — N. Y. App. Div. 2 W. C. L. J. 669; In re Cox, 225 Mass. 220, 114 N. E. 281, 15 N. C. C. A. 271; Bowne v. S. W. Bowne Co., N. Y. App. Div. 116 N. E. 364, B1 W. C. L. J. 1183; Mac Donald v. Employer's Liab. Assur. Corp., Me. (1921), 112 At. 719; Devine's Case, Mass. - (1921), 129 N. E. 414.

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3. Spratt v. Sweeney & Gray Co., 168 App. Div. 403, 153 N. Y. S. 505, 9 N. C. C. A. 918.

4. Western Idemnity Co. v. Pillsbury, 170 Cal. 686, 151 Pac. 398, 10 N. C. C. A. 1.

to industrial accidents, and establish in its place a more equita-ble and economically sound system, that our workmen's compensation laws have been enacted. The result has been most satisfactory in that injured employees receive immediate relief; a fruitful source of friction between employer and employee has been eliminated, due to the fact that compensation is in most cases fixed and definite, a tremendous amount of burdensome and expensive litigation has been eliminated, and a more harmonious relation between the employers and employees exists than was possible under the old system.

§ 2. History of Workmen's Compensation Legislation.-In 1883 a sick insurance statute was enacted in Germany with a view to alleviating the conditions due to the economic loss from industrial accidents, vocational disease, non employment and old

age.

The first compensation law was enacted in Germany July 6th, 1884, and was amended from time to time and finally codified. in its act of July 6th, 1911. There had been modifications, however, of the common or civil law of the countries of continental Europe that preceded the German Legislation. These modifications tended toward the evolution of the idea that industries should pay compensation to their disabled workers, on the basis of the risks arising out of the employment. The Gladstone Act of 1880 was England's first important modification of her law of the employers' liability for damage to injured employes; though her first compensation law was not enacted until 1897. The Austrian law antedates that ten years. Practically all the countries of Europe, the provinces of Canada and Australia had enacted their compensation laws ten years or more before the first attempt was made in the United States, which was the Federal Act of 1908. This act was of limited scope. Under it compensation was paid to artisans or laborers engaged in federal government construction work. Compensation in no case continued for longer than one year, and was not paid when it was shown that the employee had been negligent.

Massachusetts was the first state to take action on the subject of workmen's compensation. Its Legislature appointed a

commission to investigate the subject in 1903, but no compensation law resulted until 1911, in which year ten states enacted workmen's compensation laws. Montana in 1909 enacted, a law applying to coal miners which was declared unconstitutional as was also the compulsory New York Act of 1910. Since the first ten states enacted their respective compensation laws in 1911, thirty-three of the other states of the union and three territories have also enacted similar laws.

The German compensation laws differ materially from the English and American laws in that the former are divided into three general divisions, sickness, accident and disability insur

ance.

The sickness fund takes care of the employee during the first thirteen weeks of disability caused by accident. This fund is collected in the proportion of one third from the employers and two thirds from the employees.

When the disability continues for more than thirteen weeks, compensation is paid out of the Accident Fund which is contributed and managed entirely by the employers. The disability insurance covers all other forms of disability, and the fund, therefor is contributed equally by employers and employees and is managed by representatives of both. There is, however, strict governmental supervision of the entire system.

The German law requires all employers to jein the Accident Insurance Fund of their respective trades as a condition precedent to engaging in business.

In Great Britain the compensation act creates a personal liability which the employers may insure or not, as they deem best, though they usually insure in privately managed stock or mutual insurance companies and these are supervised in a general way by the government, just as the American companies are supervised by the various insurance departments of the different states.

The American compensation acts contain many of the essential features and phraseology of the British and Canadian acts, so that the British and Canadian decisions interpreting their

5. Cal. Ill., Kans., Mass., Nev., N. H., N. J. Ohio, Wash. and Wis.

own acts throw considerable light on the interpretation of the American acts, and will therefore be cited frequently in the following pages of this work.

§ 3. Objections of Opponents of Compensation Laws.-It is stated by the opponents of compensation laws, that they are arbitrary of application and that the compensation of ten to twenty dollars per week for stated periods or for life, in cases of permanent total disability, is inadequate when considered in the light of the liberal judgments for damages that are frequently obtained in personal injury cases under the common law system. They overlook or disregard the fact mentioned in Section one, that under the common law system approximately seventy per cent of the victims of industrial accidents do not receive any compensation or damages, while under the compensation laws every employee who suffers an accident, arising out of and in the course of the employment, receives a fixed and definite compensation, regardless of the question of fault or negligence. They further overlook the fact of the great economic waste usually attendant on obtaining a judgment in damages, such as disrupting the working organization of a plant or factory, by repeatedly requiring employee witnesses to be taken from their work and wait in court often for days at a time to give their testimony or attend court and have the case continued time after time for one reason or another, thus involving great inconvenience and expense. Another item of great expense under the common law system, is that of attorney's fees. These personal injury cases are usually taken by attorneys on a contingent fee basis of one third to one half of the amount recovered by settlement or suit, so that by the time the alluringly large judgment reaches the hands of the injured employe, the amount is not often larger than he would receive under the compensation law, not to mention the fact that under the compensation law, he would receive the compensation at the time of his disability, when he most needs it, rather than be compelled to wait from six months to three, four or five years, as is often the case under the common law system, and then never be certain whether he will receive it at all.