“Take Nothings” – Are They Worth It? A Sixty-Second Seminar in Workers’ Compensation Claims Handling

“Take Nothing!” This is often a magical phrase to an employer, administrator, and defense attorney. The phrase means that an applicant has lost at trial at the appeals board and was awarded no workers’ compensation benefits. In practice, “Take Nothing” orders are very rare, to the tune that only 1 in 750 cases that go to trial result in that finding.

Some law firms boast of “Take Nothing” victories on their websites and in social media. We understand their inclination to do so in that the workers’ compensation defense industry typically regards such a disposition to be an achievement to covet. This article explores the question of whether the pursuit of a “Take Nothing” is worth it. For the reasons set forth below we suggest that before hearty congratulations are offered up, meaningful consideration is warranted.

As a preliminary observation, have you noticed that nobody seems to mention how much money was spent to obtain a “Take Nothing” finding? Probably because the legal defense costs alone may be staggering! “Take Nothing” findings require a full-blown trial and typically are contested via a subsequent appeal process afterwards. Plus, a great deal of expensive discovery is needed prior to trial. As such we suggest that these questions be asked and answered in determining the real cost of a “Take Nothing” victory:

1. How much in defense attorney fees were paid to win the case in chief?
2. How much was paid in legal fees and costs to fight the subsequent appeal?
3. How much did the employer pay for med/legal evaluations and supplemental reports; depositions of physicians and witnesses; investigation services (including surveillance); interpreters; record subpoenas; transportation/travel; witness fees; and Labor Code 5710 deposition fees?

By way of example, imagine a “Take Nothing” order that required $50,000 in expenses (not an unrealistic amount to defend a case through trial and appeal). Then ask yourself, was the case even worth $50,000 to begin with? Consistent therewith we suggest that the first question to be asked is whether the exposure of the case warrants the expenditure required to obtain a “Take Nothing.” It is a tremendous disservice for a law firm to allow its client to pay more in legal fees and costs than the exposure presented by a claim. Assuming the exposure presented by the claim was $20,000, the employer could have saved $30,000 by settling before the extensive discovery and trial that a “Take Nothing” case requires. We submit that as an alternative to the pursuit of a “Take Nothing,” an employer might want to adopt the “Pay Something” strategy. In our experience this approach typically leads to a faster and less expensive resolution.

Of course, there are always exceptions. Some cases are worth the fight and extra expense to defeat a specious claim and to communicate to the totality of an employer’s work force that the employer will not settle out bogus claims just because the employer wants to avoid legal fees and costs; however, in this claims climate the deterrent effect is not great, and the success rate of applicants at trial is significant. Take Nothing orders are seldom issued. Therefore, we must ask yet another intriguing question, namely, “How many cases did the employer, administrator and law firm lose before they finally received a ‘Take Nothing’ victory?” Again, nobody ever talks about that. One can only imagine how much employers have spent litigating all those lost claims before they bagged the “white elephant.”

In conclusion, sometimes settling with a “Pay Something” is more financially advantageous than seeking a “Take Nothing.” Be judicious in making decisions on whether to proceed to trial or settle. Lastly, keep in mind that the phrase “Take Nothing” is misleading, as the related litigation expenses can end up costing an employer a small fortune!