Quantifying the Monetary Impacts of Changes in Burdens of Proof and Procedural Rules: A Study of Workers' Compensation, 1997-2016

Abstract

In nearly all liability settings, the probability that an accident victim will receive payments and the amount of those payments are strongly influenced by procedural rules. Yet, their impact is often difficult to measure empirically because it is difficult to measure the true liability and size of damages because those are also at issue in the proceedings. We study the impact of burden-of-proof laws on average accident payments per covered worker under workers' compensation, where fault is not at issue and damage payments are set by statute. The results show that states experienced sizeable drops in cash and medical payments per covered worker of 15 and 9 percent, respectively, after they adopted burden-of-proof laws. The laws reduced workers' compensation spending by $212.8 million per year in states that adopted the laws.

Keywords: Law and Economics; Labor Law; Legal Procedure; Workers' Compensation; Non-wage Labor Costs and Benefits