Alabama Workers Comp Act Ruled Unconstitutional

A judge in Alabama has ruled that state's Workers Compensation Act to be unconstitutional.

Circuit Judge Pat Ballard found two specific provisions of the Act to be unconstitutional:  the $220 per week cap on compensation and a 15 percent cap on attorneys fees.

Ruling that two provisions of the Act are unconstitutional renders the entire Act void

The ruling came in Nora Clower vs. CVS Caremark, in Jefferson County Circuit Court.. 

The $220 per week cap on compensation had been set back in 1987, the same year this writer began Advanced Insurance Management, my consulting company that helps employers catch and correct Workers Comp insurance overcharges.

Costs of most things, including even the minimum wage, have increased a bit since then, but this cap had not been adjusted in the intervening thirty years.

Regarding the state's 15 percent cap on attorney's fees, Ballard held that it "fails to afford due process of the law." 

Needless to say, this will be an incredibly powerful ruling, impacting workers, employers, insurers, and health care providers. The legislature will have to move quickly to address the problem, as the judge has placed only a 120 day stay on the ruling, to give them time to fix the situation.

I know some folks, especially employer groups, will find this ruling upsetting, but really--a cap on compensation for injured workers that hasn't been adjusted since 1987?