Newsletters
Risk Central
Digital EditionThe Litigation Myth: Why Attorneys Aren’t the Real Cost Driver
Harvey Warren has enjoyed many careers, from screenwriter to film producer to financial services professional. With a bachelor’s degree in communications from Ithaca College and a master’s degree from Syracuse University, writing has always been his passion. As the Optimized Patient he fulfills his dream to write about healing. Mr. Warren lives in Los Angeles with his wife, Wileen.
This is the fourth in a series of articles exposing what is driving the excessive recovery times and the high cost of workplace injuries.
Litigation is a difficult subject in every possible setting. By definition, litigation carries with it conflict; the process of resolving rights-based disputes through the court system. The “grand bargain” was struck to put an end to the avalanche of lawsuits in the workers’ comp system.
Yet, while lawsuits arise for a variety of reasons, many of those reasons are not as obvious as many believe. Studying the data and research around litigation in workers’ comp suggests there is a way to help minimize this very costly aspect of a workplace injury.
I think it is fair to say the commonly held belief is that there is more compensation or gain to be had if the injured worker gets a lawyer involved. But is that true? Researchers increasingly argue that litigation itself is often not the primary driver of better medical or financial outcomes.
The litigation research unpacks the causes in the litigation process this way. Injury -> Communication problems -> Perceived unfairness –> Disputes -> Attorney involvement -> Higher settlement.
This cascade matters because interventions that improve communication and perceived fairness may reduce litigation and unnecessary claim costs without reducing net medical or financial benefits for the injured worker. Some evidence suggests such intervention might even improve outcomes.
I think the two key words in the research are communication and unfairness. Consider that in the context of “perceived injustice” and the lack of recovery guidance. This is not to say that the injury treatment varies in any way.
All of the studies I looked at made sure that litigation or no litigation, the same injury treatment was delivered for the same specific injury. I’m focusing on the recovery treatment, meaning how the injured worker is supported with information during the recovery process.
The revelation for me was that although higher payments may correlate with litigation, those higher payments are not necessarily caused by attorney involvement.
There has been a lot of discussion in the media lately about the importance of differentiating correlation from causation. The truth about the dynamics around a worker’s decision to get a lawyer is one of the issues where that distinction is critical.
A 2018 CLARA Analytics review of 11 years of closed indemnity claims found litigated claims were 388% more expensive than non-litigated ones, with median values rising 739% and resolution taking 195% longer once an attorney was involved.
A more recent WCRI study of nearly a million claims across 31 states found attorney involvement increases payments by $7,700–$12,400, increases lost time by 284%, and inflates expenses by 200%, with 34% of workers out more than seven days ending up represented.
That’s the “cost” story the industry usually tells and bemoans. But WCRI’s own follow-up work asked the more useful question: “Why do workers hire attorneys in the first place?” Their answer isn’t “opportunism”, it’s largely about how the claim process itself is handled.
A JAMA-published prospective cohort study (Australian, 6-year follow-up) found that claimants report high levels of stress specifically from the process of engaging with the compensation scheme itself, and that this claims-related stress independently predicted worse long-term health outcomes — even after controlling for injury severity, psychiatric history, and age.
A related analysis of that same dataset found workers with negative/neutral experiences returned to work at 65% versus 84% for those with positive experiences, holding other factors constant.
My focus on education and engagement, meant initially to be a straightforward compassionate assistance effort, would seem to make the compensation processes less stressful. It has proven to improve recovery rates, reduce cost and help to avert litigation.
Litigation appears to correlate less with injury severity or claimant character and more with how threatened, confused, or unsupported the worker feels inside the system. That’s a process or “experience” variable.
A pilot enhanced care program in Texas that added weekly educational videos, audio content, and a recovery-guide call layered onto standard case management reported zero litigation among 25 participants — a small, non-controlled sample, but a striking directional signal.
Interestingly, this was reported in Risk and Insurance. One industry summary reports plainly that strong communication reduces attorney involvement and lowers total claim cost, while higher trust produces fewer disputes and shorter duration.
Return-to-work program literature makes the related point that RTW programs built on open communication reduce litigation. The educational literature demonstrates that the employer cares.
The RTW clock matters a lot: workers out six months or longer have a less than 50% chance of ever returning, so speed of engagement isn’t just a cost lever, it’s the difference between recovery and permanent separation from work.
Litigation cost data alone supports an “opportunistic abuse” narrative only superficially. It shows litigation is expensive; it says nothing about why workers seek attorneys.
This supports a two-track treatment model: “injury treatment” (medical care aimed at physical recovery) is necessary but insufficient.
Recovery treatment: proactive education, transparent status communication, early empathetic engagement, and structured expectation-setting, addresses the psychosocial and procedural stress that the JAMA and Australian studies show independently predict both litigation and poor long-term health outcomes.
The payoff is measurable on both sides of the ledger: lower attorney-involvement rates (avoiding the well-documented 200–700%+ cost multipliers), faster RTW (avoiding the steep drop-off in RTW likelihood after 6 months), and — per the long-term cohort data — potentially better actual health outcomes, not just better claim metrics.
Human recovery is profoundly shaped by how injury and treatment are experienced psychologically and socially.
I believe the distinction between injury treatment and recovery treatment may be the key to not only providing a better recovery experience for injured workers it may also improve outcomes for employers by averting litigation and improving return to work timeframes. More on the important distinction between injury treatment and recovery treatment in my next article. &
