Page images


As to the $24,000, again, our position is going to be that we feel there has to be a ceiling, as my statement goes into, and I will explain why, but we are not saying it has to be $24,000. Certainly it can be, if you are going to raise that there may very well have to be a proportionate raise.

Let's come to the specifics on it of these increased rates. It is primarily a factfinding function which you and your staff are going to do, and our suggestion, which I pointed out in the statement in some length, it seems to us, is that in doing this you have to look to certain criteria. We suggest to you that you can't look to the criteria such as Mrs. Peterson gave you by pointing out one certain week in San Francisco in a particular month, which if you check into you will find out will probably be the busiest week they had there. That isn't quite the way you go about it. Certainly in terms of getting average weekly earnings, the Pacific Maritime Association has been keeping

them for years, anything they have is available to you. The New York Shipping Association keeps these. I think the Gulf people keep such data, so this is reasonably, readily available to you.

Second, the chaps from the AFL-CIO that came before you in making their statements for this relied rather heavily, it seemed to me, on the Federal Employees Compensation Act. I really suggest to you that isn't quite a fair criteria to use, as I think Senator Morse and you, yourself, would recognize by reason of your 1966 amendments you raised the level of compensation, I think, up to something like over $330 for a Government worker who is making some $23,000, and it goes on down, but it is proportionately way out of anything that we know in private industry. This is not to say it is improper, but what the statements suggest to you is that the working relation, fringe benefits, and the rest of it are so dissimilar between the Federal Employees Compensation Act and the one that is now here before you, that I don't think that really can be used as criteria. What I do suggest to you can be used in part, in rather important part, will be the compensation laws of the maritime States on both States or on both coasts of the gulf or in the Great Lakes. What I try to do there is set forth in the statement a compilation that was put out by the U.S. Chamber of Commerce. It is an excellent one. It sets forth the rates in all the States of the Union. You will see the maximums, you will see the death benefits set forth. The reason that that does sound equitable, I think, is this, particularly, for instance, in our State a longshoreman works both on the shore, on the dock, and on the vessel. If he is injured, if he has some accident on the shore or on the dock, he comes under the State act, of course, and there you run into a figure that is set forth in the testimony, but it will run, oh, not more than, say, up to 70, a little better than 70 weeks. If he is hurt on the vessel then, of course, he comes under the Longshore Act and your rates.

The same thing is true in California and in Washington, and if you look at the figures set forth in the statement you will see that the $105 far exceeds any State compensation act that we have on this west coast. That is not to say ours are right and the proposed one is wrong, but it is to say that it does give you little pause in terms of relating what should be the level. In any level rating you are going to make, of course, and you have, I think this cuts across my whole statement, is that you do have to take into consideration this third party. If you are going to work out an effective solution for it, why, certainly the world is open to see that compensation benefits are more than they otherwise would be so the men can correspond in benefits.

Aside from the two rates of what you get per week or the death benefits, the third aspect of it is that this bill proposes to lift that $24,000 ceiling. We are in absolute opposition to that. I guess for one reason above all else, I say to you it is mandatory that as long as you are going to have unscheduled injuries in the scheme of this act you are going to need some type of ceiling against which to measure how much a man can get and how long it can go so insurance rates can be met, so deputy commissions in the field can make some rules, will have some definiteness or termination point to them.

I suggest to you, and I will two or three times more in my statement, that when you get to the executive session-your markup session—it might be a real help to you were you to perhaps get two or three of these highly experienced deputy commissioners. We have two on the west coast that have lived with these problems for 10 to 20 years that would talk to you about several of these provisions and how important, what effect they have on the effective administration of the act.

The real point of this, of course, is to get men compensated for an injury they sustained, see that they don't lose money and get them back to work as soon as possible, because that is what it is all about.

Now, moving on from those two, what I call gut issues, we come to the so-called new provisions in this bill. I think there are four of them that you ought to really focus on, but before I cover those four, because I think the minority counsel asked earlier, how much did these so-called provisions of $105 a week and raising the death benefits and eliminating the $24,000 what does that mean by way of a cost package to the industry? Well, we have received in the last few days, actually Mr. Vickery received it and made it available to me, a letter from the actuary for the National Council on Compensation.

This, as near as I can tell, is the main ratesetting body in the whole workmen's compensation business. Their figure is that they figure that the proposed direct ones that I have called the guts of the bill would involve a rate, insurance rate, increase of 39.3 percent. Now, all of the other provisions in the bill and the user charges, et cetera, they have said they cannot at this point put a cost figure on it by reason of the mathematical uncertainties but they are endeavoring to do so, and obviously they are going to have to work along at it. But if you look at the cost figures, and your staff will, I think, you will see they will have to come up with some figure that is going to be more than 50 percent. In other words, these unknowns, which I will treat in a moment, are certainly going to add up to another 11 percent, so that would be the answer to the question that you raised earlier, and I think it is a reasonably authoritative one, because, after all, this is the body that sends the rates out that goes into the manual for all of the companies that are quoting rates that these people have to get their insurance from.

Now turn to category No. 2, these new provisions which we have trouble, and I am only going to highlight the four real money ones that T question have any value.

I think the No. 1 one, I would have trouble with the attorney fees provision. This bill with its provision that if the carrier or the employer resists and then if an award is made or increased, why, you should then allow attorneys' fees. I would say to you as a practical working matter that that is going to add really an enormous amount of litigation or unnecessary litigation or attorneys' fees on that. I will tell you why. It is just in the manner in which these cases are handled. Almost all cases heretofore, your prior testimony has indicated this, are resolved by amicable settlements, they are worked out between a carrier and/or the employer and with the man and his attorney. But the moment you put a chance so that the attorney, and this is just human nature, can get rewarded for his efforts, then when you have a

a medical report and the medical report, for instance, will say the man is entitled to 20 percent of an arm, all that the injured man or attorney has to do is say I don't agree, I think he ought to have 30 percent. Fine, the matter goes to hearing, at that point the carrier has resisted. When the matter goes to hearing, no matter if the award is still the 20 percent that the attending doctor gave, under the language of your amendment you are going to allow an attorney's fee because the carrier has resisted, and, two, an award was made or increased, you are going to put, I think, a wholly unnecessary level of attorneys' fees on there. Now, in the act right now you have in one of the sections

provision for attorney fee, but in this instance it has been rather carefully controlled. It has been controlled in that it requires the approval of the local deputy commissioner or requires court approval. So that is one new provision that the industry certainly on the west coast thinks would be costly and objects to.

Let's take No. 2. No. 2 is the concept that you, after a scheduled injury has been closed, for instance, an arm or å leg has been the subject of a permanent partial disability award, thereafter it is possible to reopen it and put the man back on an unscheduled loss-of-earning type of compensation benefit. We have a great deal of trouble with this, and this seems to fly right in the face of the theory of the act of having. on the one hand, scheduled disabilities and, on the other, unscheduled disabilities. To us, I think Mr. Vickery in his testimony did it much more detailed, but the nub of it is that you are, in effect, it seems to us, giving a man double recovery, you paying him for the injury to the arm he has received and which is, in effect, to make up for whatever loss he has had and subsequently if he comes in and says, "I think I have got a loss of wage earning capacity," then you are going to put him onto this again and it seems to open the door again.

No. 3 would be the notion that if a man has any dependents, a wife or any dependents, he ought to get an extra eight and a third percent. Well, some other witness said this was sort of a thinly disguised way of getting 75 percent. I don't know whether it is disguised or not, Senators, but, after all, almost all of our folks are married and have one or more dependents. The theory this act has had since it was enacted would automatically work on a 1-to-3 ratio. I don't really know why at this stage you want to change that ratio. If you want to get more money it seems the way to go about it is to change the numbers on the average, the amount of temporary total average you will pay on what the permanent partial pay on rather than changing the fundamental ratio.

Now, the fourth new provision I call to you, and I think it is going to pose a lot of problems in administration, it will cause a lot of insurance problems, is the statute of limitation. You have a year in there now, I truly don't know what justifies making it longer than that. The proposal in the bill before you kind of gives an open end statute of Iimitation. It is still a year, but you really don't know when it starts. In effect, in some eyes it is when a man should have known there was some relationship between some work he did and some injury he may then discover he has. Certainly I am not trying to raise scare rabbits. I just don't practice that way, but it does kind of open your statute of limitations. Mr. Vickery has lived in this field for

years and suggests to me if this is a problem, and I really don't know it to be and I have never seen anyone come forward with figures that it is, then please extend the statute of limitation but give us something definite. That is what we need in this field, something definite, the rules, where we know the goalposts are.

Senator MORSE. Let me interrupt for a moment. You are saying that you don't see why the 1 year should be changed, but you are saying don't give us an open end unlimited time to bring action, whether it is 1 year or 2 years so long as x is reasonable. You are not making an issue about that. What you are really objecting to is no ceiling ?

Mr. LINDSAY. That is correct. What I am really saying, and I know you will get the data on it, I can't give any more than my own personal experience in Oregon, and you have deputy commissioners here that can really give you firsthand how many people have been put out of the court by this 1-year limit. They are just not known to me, honestly. I am saying if this is an unjust period of time, give us another definite period of time that you think is just. That is the industry position. What it doesn't want is an open end or unknown statute of limitation. It doesn't want, in effect, to have liability in lawsuit of the statute of limitations.

Now, if you could just quickly move on to the third category of these so-called user charges. There I think you are going to find a complete unified opposition of the industry, and it is done on grounds of theory and practicalities. You Senators are for more familiar than we are with the concept of the user charges.

In my statement I have gone into the independent appropriation bill where this all started in 1952. I have read the, oh, the budget people, their notions for justification for all this, but essentially it involved the notion that if you confer a special privilege that the people that it is being conferred on ought to pay for it, I think our position on that is that we are not aware that some special privilege is being imposed on us or put on us, but as a practical matter you are talking about putting a level that, at least I think according to the figures, it is set forth in my statement, about 3.3 million on top of this industry, just one more cost item that you listen to the operators talk about that we have to handle.

Senator Morse this morning said, "I would like to get some staff work in terms of what other governmental agencies do." I think that would be very revealing, I do. In the N.LR.B. this is not something that the industry pays for it, it is a governmental. I do CAB work, this is not something the industry pays for, all these safety investigations, this is something that the public as a whole pays for.

What we say to you in these two fields would be that I really think this is a governmental type of function, but, on the other hand, if you follow, in your wisdom you want the industry to pick it up, then I say please let us have a hand in it because just like in lumber or whatever other things, when you are asking somebody to pick up freight, they-he certainly ought to have some say whether it be by advisory or other committees, but he ought to have a hand in how the money is being spent, he ought to be heard on it in a more direct sense than he is now where he has to be heard through his duly elected representative rather than dealing directly with the governmental people handling it.

Now let's move on from that to a thing that this bill just doesn't get at, which you have heard from all the witnesses, and I will try not to cover the same ground. This is the third-party situation. I will do it in few words.

The real problem you have here, you have to appreciate it, is this, that by the Compensation Act you have a man like a stevedore paying the Compensation Act. You read the act and it says that is to be his exclusive liability. He pays medical care, he pays benefits, and theoretically he is out of it, then, bang, comes along your Supreme Court with this one, two, three cases. First, this is developing an ever-expanding doctrine as to seaworthiness so the man has a case against the ship.

Two, the doctrine of indemnity, whereas the court imposed unseaworthiness liability on a ship. Realizing how unfair that can be, because so many have nothing to do with the ship, have to turn around and dump it on somebody else, so by indemnity they put it back on the stevedore employer. So instead of having exclusive liability there he is the recipient of a damage lawsuit. And then step 3, of course, is this Yaka case where, in order to complete the symmetry, they then go ahead and say if the employer happens to be owning and operating a ship we will let the longshoremen sue the person directly. So, for instance, in our State here, Senator, the American Mail Line, rather than using independent stevedores, does its own stevedoring. As a result of thehave you read the act yourself? You think they are the direct employer, therefore, they are not subject to suit. No, under that Yaka decision you get the employee of American Mail Line being able to sue them directly. This is the one, two, three punch I am talking about.

Coming, first of all, and I think we ought to expand a little on this notion of unseaworthines because there was a dialogue between Senator Morse and Mr. Eschen that I think got away a little bit from the points that we had in mind. I think when Mr. Eschen was talking about seaworthiness this morning, he was primarily referring to what all of us think of aside from the lawsuits in terms of the seaworthiness, the availability, the availability of the vessel to float and carry goods. I think the real point about unseaworthiness the courts have developed. The real point of the doctrine doesn't relate so much to the defective gear that breaks in a ship or the missing rung, as the notion that the place for the longshoremen isn't reasonably safe to work, and that can come about because of the work, the man himself can create that unseaworthy condition. The employer, the stevedore, fellow servant negligence can do it.


« PreviousContinue »