Friday, November 13, 2009

What does Workers’ Compensation owe Francois Bareme?

Every workers’ compensation system has some way of deciding what payment a worker should receive for permanent disability. Some systems are based on impairment or non-economic loss while others are based on disability with its implied economic loss calculated in some manner or other. Still others are based on a combination of the two concepts. Commonly in workers’ compensation, schedules of disability exist that relate impairment or disability to some standard. In Canada, we might refer to these as Disability Schedules. In several European sources, I noted that these schedules were called “Baremas” . I wondered about the origin of the word and was fascinated by what I found.

In medieval times, Germanic law related the loss of an arm or an eye to the ‘wergeld’ or ‘manngeld’, the compensation that was to be paid to the family for the killing of a free man. Even pirates had schedules in the articles that governed their enlistment. In Under the Black Flag: Exploits of the most notorious pirates, Don Carlos Seitz lists the articles from a 1723 voyage under Captin John Phillips; one article reads:

If any Man shall lose a Joint in time of Engagement, shall have 400 Pieces of
Eight; if a Limb, 800.

Enter the French mathematician, Francois Bareme [or Barreme] (1638?-1703). He created and published many mathematical tables for ease of use and consistency in commerce. The French word for a ready-reckoner, barême or barrême, is a reference to him. Bareme took the sums that were commonly used for the loss of body parts and restated them as a percentage of the compensation that would be granted for compensation for the death of a free man. Subsequently, such listings of body parts and percentages in many personal injury compensation schemes became known as Baremas. Today, the most complex Barema would be the AMA Guides. In Spain, the Baremo, as it is known, is a mechanism that allows users to consistently evaluate bodily injury and assess compensation for victims of motor vehicle incidents (for permanent disability systems, it uses a point system to calculate a rating from 0 to 100 that determines the compensation).

The scale and method of calculating compensation varies with the barema used and the jurisdiction. I recently wanted to know how various systems might rate the loss of an eye. Since some jurisdictions are not limited to just workers’ compensation, these may not be strictly comparable but I thought the variation was interesting. In WorkSafeBC’s Permanent Disability Evaluation Schedule, and industrially blind eye is evaluated as a 16% disability, enuculeation at 18%. In Belgium, total loss of vision in one eye is rated at 30% disability. The English Barema uses 40% while the French use 25% and in Iceland, the loss of vision in one eye is rated at 20%. There is even a wide variation in Scandinavia with the loss of vision of one eye rated at 20% in Denmark and Norway and 14% in Sweden while the actual loss of one eye is rated at 20% disability in Denmark but 25% and 17% in Norway and Sweden respectively.

Of course, the final result for the injured worker will be based on more than a percentage of disability. A low percentage of a high wage rate may provide a greater benefit than in a system where the maximum wage rate is pegged at a low level.

There is no one right percentage of disability to apply in this example. What is right for one jurisdiction is not necessarily right for another. The impact of the loss of an eye in one society (and its related economy) may be quite different than in another. That said, the equity is critical. Bareme’s intent in creating tables was to standardize and eliminate error—a goal that still applies today.

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