Key takeaways:

• New Illinois law creates civil cause of action after statute of limitations expires under Workers’ Compensation or Occupational Disease Acts

• Governor cites manifestation period for certain latent diseases, including asbestos-related diseases

• Could lead petitioner-plaintiffs to run out the clock on comp actions, gamble on potentially larger payout from judge and jury

Since the new year, multiple bills targeted at workers’ compensation reform have been put forth by the Illinois legislature. One bill that gained attention, particularly in employer circles, is Senate Bill 1596, signed into law by Governor J.B. Pritzker on March 20, 2019. It is now codified as Section 1.2 of the Workers’ Compensation Act (WCA) and Section 1.1 of the Occupational Diseases Act (ODA).

In its plain terms, the law creates a civil cause of action for employees after the statute of limitations expires under the WCA or ODA. Prior to the enactment of this legislation, if an employee failed to bring a cause of action within the statute of limitations period under the applicable act, then the action was barred and the employee could not pursue a civil action. Now, the WCA and ODA are arguably only the exclusive remedy for an injured worker until the statute of limitations under each expires, at which point the potential liability exposure for an employer could significantly increase, depending on the nature of the action.

This legislation is arguably most worrisome for those employers who face asbestos or other latent disease-related claims, as it appears these are the cases the law targets. Governor Pritzker justified signing the bill based on the medically recognized manifestation period for certain latent diseases, including asbestos-related diseases, exceeding the statute of limitations periods under the WCA and ODA. Under Illinois law, a claimant has 25 years from the date of the last exposure to asbestos to file an application with the Workers’ Compensation Commission. To file suit under the common law, a claimant has two years from the date of discovery, or the date a claimant knew or should have known he had an asbestos-related disease and knew or should have known the disease was caused by asbestos or asbestos-related materials. While very few latent disease cases make it to trial, those that do oftentimes see headline-worthy verdicts. Even settlements can be costly without the boundaries put in place by the various benefit caps under the WCA and ODA.

It is unlikely employers who typically face acute or repetitive injury claims will see a dramatic increase in exposure. The statute of limitations for most personal injury actions under the common law is two years from the date of the accident. Under the WCA, an employee has three years from the date of accident or two years from the date of the last payment of benefits, whichever is later, to file a case. Most civil actions would likely already be barred by the time the statute of limitations under the WCA expires.

Furthermore, injured workers are arguably far more likely to pursue compensation under the WCA than under the common law. Illinois’ workers’ compensation system is no-fault, meaning an injured worker is able to recover compensation even if he was injured due to his own negligence. Conversely, under the common law, an injured worker would need to prove his employer was negligent and their negligence somehow caused his injury. While his potential compensation could be greater because there are no limits on liability, it could also be reduced or eliminated entirely depending on his degree of fault.

There is no doubt the interpretation and application of the newly revised statute will be swiftly reviewed by the courts. For instance, the law is vague as to whether it applies to all injuries on or after the effective date or if it will have retroactive application. Courts generally disfavor retroactive application and the text of the legislation does not specifically give it retroactive effect. However, it is likely injured workers and their attorneys will attempt to pursue claims that may still be barred, even under the new law. The law may also conflict with the statute of limitations periods under the common law.

There is also a question of whether this new statutory provision undermines the spirit of the WCA and ODA. The WCA and ODA were intended to balance employee and employer interests by providing injured workers with a less-burdensome path to obtain compensation and providing employers with the security of limited liability. This new law could now lead potential petitioner-plaintiffs to run out the clock on a workers’ compensation action in favor of taking their chances before a judge and jury for a potentially larger payout.

Only time will tell where this amendment will lead, but for now, employers are encouraged to work with their risk managers, brokers, and counsel to develop strategies to pre-empt potential claims. We will continue to closely monitor the impact of this legislation. For more information on this decision and how it might affect you or your employees, please contact:

• Natasa Timotijevic
• Jennifer B. Santoro
• Damon M. Gruber
• Sean J. McKinley