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Proposed AZ House bill would ban workers' comp lawsuits

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PHOENIX (CBS5) -

A bill that would ban lawsuits against insurance companies for denying workers' compensation claims in bad faith is making its way through Arizona's House of Representatives.

On Tuesday, the House Committee on Insurance and Retirement voted 4-3 to advance HB 2455 to the Rules Committee.

It's a bill that, if passed by the House, would impact every worker in the state.

"If someone had just listened to me initially, when I said I had problems and pain and they would've let me seek medical attention, this would not have happened," said Shawntelle Allen.

One year ago, a 600-pound refrigerator fell on Allen while she was working at St. Vincent de Paul – breaking her lower leg.

Workers' comp denied her claims when she said her injury wasn't healing right, and now she has a permanent bone infection.

"I definitely want to pursue that bad faith," Allen said. "I don't think that it's fair that they (insurance companies) have that much power."

If signed into law, HB 2455, sponsored by Rep. Eddie Farnsworth, would bar her from legal action.

It would give the Industrial Commission of Arizona exclusive jurisdiction over bad-faith claims regarding workers' compensation.

"Our suit is a civil RICO suit and it carries a lot of weight, and I think that's every reason why they brought this bill," said Mike Colletto with Professional Firefighters of Arizona.

Last year, a group of Phoenix firefighters sued the company that handles the city's workers' compensation program.

They said their medical claims were wrongly delayed or denied, which resulted in financial hardship.

"That was disappointing to see the firefighters here, because our amendment in the bill made clear that firefighters are not affected by this legislation at all," said Garrick Taylor with the Arizona Chamber of Commerce, which supports the bill.

Taylor said HB 2455 deals with workers' compensation in the private sector.

"The best place to settle bad-faith claims and workers' compensation cases is at the Industrial Commission, not in a trial court," he said.

Whether or not public employees are exempt from the bill, which constitutional attorney Richard Langerman doesn't believe, he said employees who've been wronged by insurance companies should have legal recourse to recoup their losses.

"If they delay your payments and you lose your home, they don't have to pay for the economic harm they caused you," Langerman said about how HB 2455 would affect workers.

If the bill passes, and the Industrial Commission determines an insurance company wrongly denied or delayed a claim – they'd face a maximum penalty of $10,000 payable to the state and a maximum penalty of $5,000 payable to the injured worker.

Allen said that's a drop in the bucket compared to the $30,000 she's lost since being injured on the job.

"I think that me being a small, little insignificant person - not having any kind of power - I need someone's help," said about having the option of filing a lawsuit. "I need someone to help me fight for what's fair for me and my family."

During Tuesday's hearing, a representative from the Industrial Commission said they are not staffed to handle all of the additional work associated with the bill.

Copyright 2014 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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