Alternative Dispute Resolution

 “The Ombudsperson’s role is that of a neutral who represents no party or interest and has no stake in the case.”

Carve-Outs-Alternative Dispute Resolution (ADR) in Workers' Comp under California Labor Code Section 3201.5 and 3201.7

More and more labor management agreements are incorporating alternative dispute resolution programs or 'Carve-Outs' as a means to settle disputes in workers’ compensation to avoid delays in medical treatment, compensation and return-to-work. The ADR System replaces the traditional judicial system and consists of three steps:

  • Ombudsman/Ombudsperson
  • Mediation
  • Arbitration


ADR is often faster than the traditional workers’ comp system and can provide both the employer and employee with a better forum to express their side of the issue. ADR has many forms and often uses a proactive third party neutral experienced in workers' compensation, medical and/or case management issues to serve as Ombudsman/Ombudsperson.

Linda J. Stutzman has over ten years of Ombudsman/Ombudsperson experience under Labor Code § 3201.5, Alternative Dispute Resolution within the construction industry. She developed, coordinated and administered the Contra Costa Water District’s Los Vaqueros Dam and Reservoir Project’s Alternative Dispute Resolution Program serving as this carve-out’s third-party neutral representative and facilitator for medical and claim disputes between all parties. Utilizing a proactive approach by incorporating education, safety and prevention, early intervention, case management and return-to-work concepts helped all parties reach satisfying resolutions in this carve-out.

DMI Carve-Out Consulting Services:

  • ADR Program development and implementation, including contract development, policies and procedures.
  • Ombudsman services—neutral third party jointly selected by labor and management.
  • Ombudsman selection and training.
  • Ongoing program administration.
  • Voluntary Mediation strategies under the traditional workers’ comp system.

“The Ombudsperson’s role is that of a neutral who represents no party or interest and has no stake in the case. The Ombudsperson offers important advantages to the process: (1) cases are handled quickly and professionally, (2) the injured worker knows that his welfare and recovery are of the utmost importance, (3) costs of litigation are reduced, (4) communication is improved between all parties of the case, (5) parties are allowed to continue their working relationships on the best terms possible by doing everything they can to settle their dispute quickly , and (6) all parties of the claim have their needs met.”

CARVE-OUTS: An Opportunity For Occupational Disability Management
Copyright CWCE Magazine February 2000
By Linda J. Stutzman, RN, COHN/CM, CPDM, LNC


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About DMI

Blending the insight from experience with innovative thinking, DMI provides customized consulting and best practice solutions. Our consulting services support transitional work and the interactive process by working closely with medical providers to provide work limitations which enable employers to develop/provide reasonable accommodations for return to work.
Disability Management Insights, Inc. (DMI) is an independent legal nurse consulting practice that offers clients individualized strategies that support collaboration in the workers’ compensation claims and medical/legal process to improve return-to-work objectives for all parties - Employees, Employers, Legal, Claim Supervisors and Adjusters.



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