In Defense of the Increased-Risk

Doctrine in Workers’ Compensation

Matt Hlinak, Ellis University/Northwestern University

ABSTRACT

Thirty-five years ago, the late Arthur Larson of Duke University, the pre-eminent
workers’ compensation scholar in the United States, argued that states should adopt a
new compensability regime. In place of the widely-adopted increased-risk doctrine,
Larson lobbied for the positional-risk doctrine, under which virtually all injuries
occurring “in the course of” the employment are deemed compensable. Despite Larson’s
stature and eloquence, however, states have not heeded his call for change, and with
good reason. First, the positional-risk doctrine ignores the “arising out of” component
of the statutory language. Additionally, the positional-risk doctrine inefficiently allocates
liability for industrial accidents. Finally, the exceptions to the increased risk doctrine are
not significant enough to warrant a new rule. Courts should recognize that newer is not
always better and continue to apply the increased-risk doctrine.

Keywords: workers’ compensation; employment law; law and economics

I. INTRODUCTION

Workers’ compensation is a unique branch of the law. People unfamiliar with workers’
compensation are often confused by its seemingly similarity to other areas, such as tort or insurance law.1
An attorney hoping to win a workers’ compensation case by relying on tort or insurance principles will be
confronted by the singularity of workers’ compensation law. Unlike in tort, for example, fault of the
employer is largely immaterial;2 similarly, a job is not an insurance policy guaranteeing compensation for
any injury that an employee might sustain.3

That being said, however, it is equally unwise to view workers’ compensation as being completely
divorced from other areas of law, particularly tort law. Although contributory negligence is not a defense to
a workers’ compensation claim,4 accidents resulting from “personal risks” (such as congenital health
problems or dangerous items imported into the work area by the employee) are typically not compensable.5
The real issue is not fault, but work connection.6 The question becomes: Is the connection to the
employment sufficient to justify compensation? Note that the proper test is not: Was the injury
“proximately caused by the employment”?7 Larson frames the issue as “not a matter of assessing blame, but

1
See 1 ARTHUR LARSON & LEX K. LARSON, LARSON’S WORKERS’ COMPENSATION LAW §
1.02, at 1—3 (2008) [hereinafter LARSON].
2
1 id. § 1.03(1).
3
“The Workers’ Compensation Act was not intended to insure employees against all injuries.” Patrick M.
Keefe, What Is an Accident? Arising Out of, in ILL. WORKERS’ COMPENSATION PRAC. 3—1, 3—3
(Ill. Inst. For CLE, 2006), citing Quarant v. Indus. Comm’n, 231 N.E.2d 397 (Ill. 1967).
4
1 LARSON, supra note 1, § 1.03(1).
5
1 id.§ 4.02, See also MARK A. ROTHSTEIN ET AL., EMPLOYMENT LAW § 7.20, at 644 (3d ed.
2004).
6
1 LARSON, supra note 1, § 1.03(1)
7
1 id. § 1.02, at 1—4 (footnote omitted). But see Robbins v. Nicholson, 188 S.E.2d 350 (N.C. 1972); Hill
v. St. Paul Fire & Marine Ins. Co., 512 S.W. 2d 560 (Tenn. 1974); Sinclair Trucking v. Bailey, 848 P.2d
1349 (Wyo. 1993).

1
of marking out boundaries.”8 Considerable controversy exists concerning where those boundaries should be
drawn.

There are three types of risks facing an employee: employment risks, personal risks, and neutral
risks.9 Employment risks concern “all the obvious kinds of injury that one thinks of at once as industrial
injury,” such as injuries caused by “machinery breaking, objects falling, explosives exploding, tractors
tipping, fingers getting caught in gears, excavations caving in, and so on.”10 Injuries caused by employment
risks are compensable in all jurisdictions.11

Personal risks involve injuries where “the origins of harm [are] so clearly personal that, even if
they take effect while the employee is on the job, they could not possibly be attributed to the
employment.”12 These include “medical disorders that coincidentally manifest themselves at work,”13
including heart attacks,14 and risks imported to the workplace by the injured employee.15 Injuries from
purely personal risks are typically not compensable, absent some connection to the employment.16

Finally, neutral risks are risks “neither of distinctly employment nor distinctly personal
character.”17 This gray area between employment and personal risks is, not surprisingly, the subject of
much litigation. Larson has succinctly described the problem posed by neutral risks: “There are…three
categories of risk; but unfortunately, there are only two places where the loss may fall—on the industry or
on the employee.”18 The focus of this paper will be on the proper allocation of liability for injuries caused
by neutral risks.

I will begin by discussing the increased-risk doctrine, the compensability regime currently in
effect in the majority of jurisdictions.19 I will then describe the positional-risk doctrine, a test adopted by

8
1 LARSON, supra note 1, § 1.03(1), at 1—5.
9
1 id. §§ 4.01-4.03. See also ROTHSTEIN, supra note 5, § 7.15, at 636. Note that Larson also describes a
category of risks he calls “mixed risks,” but this category is irrelevant to the discussion here. See LARSON,
supra note 1, § 4.04.
10
1 LARSON, supra note 1, § 4.01, at 4—1-2.
11
1 id. At 4—2.
12
Id.
13
ROTHSTEIN, supra note 5, § 7.15, at 636.
14
See e.g., Vesco Ventilation Equip. Sales v. Indus. Comm’n, 523 N.E.2d 111, 115 (Ill. App. 1988)(“The
mere fact that an employee is at work when the heart attack occurs is insufficient to justify an award”).
Note, however, that where work duties aggravate a pre-existing condition, the risk is deemed an
employment risk. See, e.g., Sears, Roebuck & Co. v. Indus. Comm’n, 402 N.E.2d 231 (Ill. 1980).
15
In one case, an employee brought a bomb to work and it went off. Bogavich v. Westinghouse Elec. &
Mfg. Co., 57 A.2d 598 (Pa. Super. 1948). In another case, a woman was murdered at work by a co-worker
from a previous job because she had refused to go on a date with him. Kendrick v. Peel, Eddy & Gibbons
Law Firm, 795. S.W.2d 365 (Ark. App. 1990).
16
ROTHSTEIN, supra note 5, § 7.20, at 644.
17
1 LARSON, supra note 1, § 4.03, at 4—2.
18
1 id. 4.03, at 4—3.
19
1 id. 3.03, at 3—4.

2
“[a]n important and growing number of courts”20 and endorsed by Professor Larson.21 Finally, I will argue
that states should apply the increased-risk doctrine because the positional-risk doctrine ignores the “arising
out of” component of the compensability formula, inefficiently allocates liability, and because the
exceptions to the increased-risk doctrine are not significant enough to warrant a new rule.22

II. THE INCREASED-RISK DOCTRINE

The typical workers’ compensation statute awards benefits to an employee who suffers “a personal
injury by accident arising out of and in the course of employment.”23 The “arising out of” portion of this
formula refer[s] to causal origin,” while “in the course of” refers to the “time, place and circumstances of
the accident in relation to the employment.”24 This formula can also be thought of like this:

if the employee is clearly working for his employer at the time of the accident, the question as to
whether the accident is caused by the work he was doing and is a risk peculiar to that work
concerns the issue of “arising out of” the employment. When the employee’s injury clearly results
from what he is doing but there is some doubt as to whether the work he is doing is his own, the
question arises as to whether the accident occurred “in the course of” the employment.25

The focus of this paper will be on the “arising out of” element of the compensability formula.

Under the increased-risk doctrine, benefits are awarded “where there has been evidence that the
conditions or nature of employment increased the risk of injury beyond that to which the general public was

20
1 id. § 3.05, at 3—5. These are California, Colorado, Hawaii, Idaho, Kentucky, Louisiana,
Massachusetts, New Jersey, New York, South Dakota, Texas, and the District of Columbia. LEX K.
LARSON & ARTHUR LARSON, WORKERS’ COMPENSATION LAW: CASES, MATERIALS, AND
TEXT § 3.06(4), AT 50 (3rd ed. 2000) [hereinafter LEX K. LARSON]. Note that Larson also lists
Oklahoma as a positional-risk doctrine state, id., but this is incorrect. See Workers’ Compensation Act,
OKLA. STAT. tit. 85, § 3(12)(a)(2008)(“Only injuries having as their source a risk not purely personal but
one that is reasonably connected with the conditions of employment shall be deemed to arise out of
employment”); American Mgmt. Sys., Inc. v. Burns, 903 P.2d 288, 291 (Okla. 1988)(the positional-risk test
is now “unavailable for proving an injury’s causal nexus to employment”). Additionally, there are states
where “acceptance of the positional-risk approach is marginal or inconclusive,” including North Dakota,
New Mexico, Pennsylvania, Connecticut, Florida, Georgia, North Caroline, and Pennsylvania. LEX K.
LARSON, supra note 20, § 3.06(4), at 50-51. Other jurisdictions have specifically considered the
positional-risk doctrine and declined to adopt it. See e.g., Workers’ Compensation Act, OKLA. STAT. tit.
85, § 3(12)(a)(2008)(the legislature amended the statute to preclude application of the positional-risk
doctrine in response to the Oklahoma Supreme Court’s decision in Fox v. National Carrier, 709 P.2d 1050
(Okla. 1985)); Brady v. Louis Ruffolo & Sons Constr. Co., 578 N.E.2d 921 (Ill. 1991); Lathrop v. Tobin-
Hamilton Shoe Mfg. Co., 402 S.W.2d 16 (Mo. App. 1966).
21
See Arthur Larson, The Positional-Risk Doctrine in Workmen’s Compensation, 1973 DUKE L.J. 761.
22
Note that there are two other risk doctrines. The actual-risk doctrine a sort of an increased-risk and
peculiar-risk hybrid. 1 LARSON, supra note 1, § 3.04. Because this doctrine often overlaps with the
increased-risk and positional-risk doctrines in specific situations, discussion here will be limited to the
other two regimes. Additionally, some states apply the proximate cause doctrine, which will not be
discussed here because it is widely considered an “aberration.” 1 id. § 3.02, at 3—4. For a discussion of the
proximate cause doctrine, see 1 id. § 3.06.
23
1 LARSON, supra note 1, § 1.01, at 1—2. This language is taken from the original British Workmen’s
Compensation Act, 1897, 60 & 61 Vict., c. 37 (Eng.).
24
3 LARSON, supra note 1, § 3.01, at 3—3.
25
Frank J. Wiedner & Michael F. Dorries, What Is an Accident? In the Course of, in ILL. WORKERS’
COMPENSATION PRAC. 4—1, 4—3 (Ill. Inst. For CLE, 2006). It is important to note that “arising out
of” and “in the course of” are not independent elements. “[T]he basic concept of compensation coverage is
unitary, not dual, and is best expressed in the term work connection.” 1 LARSON, supra note 1, § 3.01, at 3
—3.

3
exposed.”26 The increased-risk doctrine supplanted the earlier peculiar-risk doctrine, which “gradually
achieved a well-deserved oblivion.”27 Under the peculiar-risk doctrine, the test is whether “the source of
harm was in its nature peculiar to [the claimant’s] occupation.”28 The harshness of this doctrine is revealed
in cases of exposure to the elements. An illustrative case (in fact, the one Larson uses to explain this
regime29) is a Massachusetts case30 where an employee hired to clean the town square suffered severe
frostbite that led to the amputation of his right leg. The court denied compensation because “there is
nothing to show that the employee was exposed to any greater risk of freezing his foot than the ordinary
person engaged in outdoor work in cold weather.”31 Because this type of risk was the same as that faced by
the general public, the employee failed to meet the peculiar-risk standard. The flaw in this doctrine is that
employment often (as in the above case) exposes an employee to such a general risk at a greater level than
the general public faces.32

Under the increased-risk doctrine, an injury is compensable even if it resulted from a risk common
to the general public as long as the quantity of exposure to the risk exceeded the quantity faced by the
general public.33 In a factually similar exposure case to the Massachusetts case described in the preceding
paragraph, the Illinois Supreme Court awarded compensation because:

The average man, free of obligations of any particular employment, does not stay outdoors for 9 ½
hours when the average temperature is 6 degrees below zero. The ordinary person is not engaged
in outside work in cold weather and experience teaches us to stay inside when necessary to avoid
the risk of frostbite. Petitioner, unfortunately, did not have the choice of staying inside or not.34

The increased-risk doctrine is not only distinguishable from the peculiar-risk doctrine in exposure
cases. In another Illinois case,35 a woman received benefits after being involved in an automobile accident
with a semi-truck in the employer’s parking lot. Although being struck by a semi was not a risk peculiar to
her employment, the fact that the claimant was on the employer’s premises and that trucks frequently
crossed the lot as part of the employer’s business created an increased risk.36 In an Arizona case,37 an
employee received compensation for a knee injury sustained stepping off a one-foot platform. The court
recognized that there was nothing about the action of stepping down that was peculiar to the employment,
but concluded that repetitive stepping while wearing work boots created an increased risk.38

It’s important to note that in cases where the exact mechanism of injury appears rather
commonplace, the circumstances surrounding the accident may support a finding of increased risk. In
Eastern State Hospital v. Swinehart,39 a nurse tripped over a curb on her employer’s premises while on her
lunch break. On these facts alone, compensation may well have denied unless there was something
particularly unsafe about this curb.40 However, at the time of the fall, the claimant was distracted because
she was attempting to lure a patient out of a restricted area, an action she believed to be work-related.41 She
also had concerns that the patient might try to harm her and wanted to keep him away from her car.42 The

26
Campbell 66 Exp., Inc. v. Indus. Comm’n, 415 N.E.2d 1043, 1044 (Ill. 1980)(citation omitted).
27
1 LARSON, supra note 1, § 3.03, at 3—4 (citation omitted).
28
1 id. 3.02, at 3—4.
29
See id.
30
Robinson’s Case, 198 N.E. 760 (1935).
31
Id. at 761.
32
1 LARSON, supra note 1, § 3.02.
33
1 id. § 3.03.
34
American Freight Forwarding Corp. Yale Transp. Div. v. Indus. Comm’n, 201 N.E.2d 399, 401 (1964).
35
Hammel v. Indus. Comm’n, 626 N.E.2d 234 (Ill. App. 1993).
36
Id. at 237.
37
Industrial Indem. Co. v. Indus. Comm’n, 784 P.2d 209 (Ariz. App. 1989).
38
Id. at 38.
39
996 P.2d 479 (Okla. Civ. App. Div. 1999).
40
See e.g., Caterpillar Tractor Co. v. Indus. Comm’n, 524 N.E.2d 250 (Ill. App. 1988).
41
Eastern State Hosp., 996 P.2d at 481.
42
Id.

4
court did not cite the latter factor in support of its holding, but it probably could have found that the patient
himself presented a risk, and that injuries sustained in ensuring the claimant’s safety would be
compensable.

III. THE POSITIONAL-RISK DOCTRINE

Under the positional-risk doctrine, “[a]n injury arises out of the employment if it would not have
occurred but for the fact that the conditions and obligations of the employment placed the claimant in the
position where he was injured.”43 According to Larson,44 the first application of this principle was the 1927
case of Aetna Life Insurance Co. v. Industrial Commission.45 In Aetna, a farmhand died after being struck
by lighting while driving a team of horses. The court found “a causal relationship between the employment
and the accident” on the grounds that the decedent’s “employment caused him to be where the lightning
struck him” without finding any increased risk.46

Under the increased-risk doctrine, lightning strikes are not compensable unless some aspect of the
employment increased the risk for injuries caused by lightning.47 In an increased-risk case cited by the
Aetna court,48 a welder’s dependents received compensation after he was killed by a lightning strike while
working on a steel bridge over a river. The court based its award on a finding by the Industrial Commission
that “the steel in the bridge and the water underneath caused an attraction for lightning.”49 Similarly, in
Bauer’s Case,50 benefits were awarded because “a person in wet clothes, standing close to an iron bed and
near an electric light and electric wiring, in a building on the top of an exposed hill, was in a position of
unusual danger from lightning.”51

It is rather curious that Larson relies so heavily on lightning cases to argue that the positional-risk
doctrine should supplant the increased-risk doctrine.52 Lightning cases are so frequently compensable under
the increased-risk doctrine that Larson devotes more than three full pages of his treatise to citations to such
cases.53 Since lightning strikes are so frequently compensable under the increased-risk doctrine, the threat
of uncompensated lightning injuries is not a compelling justification for abandoning that regime.

A major difference between the increased-risk and positional-risk doctrines is their respective
treatments of fluke accidents. Larson’s poster-child for the positional-risk doctrine is one such case,
Gargiulo v. Gargiulo.54 This case involves a butcher’s assistant who was hit in the eye by an errant arrow
fired by a neighborhood boy.55 The claimant was returning to the shop after burning garbage when the boy
tragically missed a shot aimed at a tree on the employer’s property. The court awarded compensation
because the claimant’s work duties “brought him unwittingly into the line of fire of the arrow.”56 Under the
increased-risk doctrine, a court would have denied compensation because there was no showing that the
claimant’s work duties put him at an increased risk for being struck by stray arrows.57

43
1 LARSON, supra note 1, § 3.05, at 3—5-6.
44
Larson, supra note 21, at 761 n.3.
45
254 P. 995 (Colo. 1927).
46
Id. at 997.
47
1 LARSON, supra note 1, § 3.03.
48
Hassell Iron Works Co. v. Indus. Comm’n, 201 P. 894 (Colo. 1921).
49
Id. at 895.
50
49 N.E. 2d 118 (Mass. 1943).
51
Id. at 120.
52
See Larson, supra note 21, at 765-67.
53
See 1 LARSON, supra note 1, at D5—3-6. But see Fuqua v. Dept. of Hwys., 168 S.W.2d 39 (Ky. 1943);
Their v. Widdifield, 178 N.W. 16 (Mich. 1920), overruled by Whetro v. Awkerman, 174 N.W.2d 783
(Mich.1970); Schmidt v. Adams & Sons Grocer Co., 377 S.W.2d 564 (Mo. Ct. App. 1964); Lucas v. Fed’l
Express Corp., 583 S.E.2d 56 (2003); 1 LARSON, supra note 1, § 4.01[3], at 5—3.
54
97 A.2d 593 (N.J. 1953), discussed in Larson, supra note 21, at 761.
55
Gargiulo, 97A.2d at 594.
56
Id. at 596.

5
 Under the increased-risk doctrine, compensation was also denied when an unknown assailant shot
a grocery store clerk.58 The court found no evidence that the store was located in a dangerous neighborhood
and also noted that the store had not been robbed nor had other employees been attached. These factors led
to a conclusion of no increased risk.59

A contrary result was reached under the increased-risk doctrine in Arnestad v. McNicholas.60
While clearing trees to break a new road, the claimant was accidentally shot by “the all-too-common deer
hunter to whom anything that moves looks like a deer.”61 The Michigan Supreme Court held that the risk of
being inadvertently shot by a hunter “was a special hazard incident to [the claimant’s] employment in such
a locality.”62

IV. CRITICISM OF THE POSITIONAL-RISK DOCTRINE

A. The positional-risk doctrine ignores the “arising out of” element.

One problem with the positional-risk doctrine is that it largely ignores the “arising out of” element
of the compensability calculus.63 The “but for” test employed in positional-risk analysis focuses only on
time and location, but completely ignores whether the injury was actually the result of the employment. An
employee merely has to prove an injury occurred “in the course of” the employment and get over the
modest personal risk hurdle. The problem with this is that workers’ compensation law is a creature of
statute, and the vast majority of statutes64 contain the “arising out of” element. When courts disregard this
element, they are re-writing the law.

Larson himself notes that it is improper to “assum[e] that the right to compensation resembles the
right to proceeds of a personal insurance policy.”65 However, this is the exact mistake made by states
applying the positional-risk doctrine—they are treating a job as an insurance policy. As Chief Justice
Brennan of the Michigan Supreme Court points out, “[t]he workman’s compensation law is not a utopian
attempt to put a price tag on all human suffering and incorporate it into the cost of living.”66 Brennan’s
statement accurately reflects the relatively modest goals of workers’ compensation statutes. Indeed, it has
been noted that “[w]orkers’ compensation was a much smaller step toward social welfare programs than
unemployment insurance or social security would have been.”67 By eliminating “arising out of,” courts are
fundamentally changing workers’ compensation.

57
This might be the case, for example, if the claimant were a counselor at children’s summer camp or a
physical education teacher.
58
Heath v. Indus. Comm’n, 628 N.E.2d 335 (Ill. App. 1993).
59
Id. at 340.
60
194 N.W. 514 (Mich. 1923).
61
1 LARSON, supra note 20, § 70.1(3), at 7—9 (citation omitted).
62
Arnestad, 194 N.W. at 515.
63
See Brady v. Louis Ruffolo & Sons Const. Co., 578 N.E.2d 921, 925-26 (Ill. 1991)(the positional-risk
doctrine “would not be consistent with requirements expressed by the legislature in the Act.”)(citations
omitted).
64
See 1 LARSON, supra note 1, § 3.01.
65
1 id. § 1.02, at 1—3. Larson further endorses this premise by arguing against compensability for
accidents resulting from personal risks. 1 id. § 4.02.
66
Whetro v. Awkerman, 174 N.W.2d 783, 787 (1970)(dissenting). Larson is correct in noting that
Brennan’s opinion inappropriately questions the “basis of moral responsibility” upon which an award rests.
Larson, supra note 21, at 769-70, citing Whetro, 174 N.W.2d at 787. The concept of moral responsibility is
not applicable in a no-fault system like workers’ compensation.
67
PRICE V. FISHBACK & SHAWN EVERETT KANTOR, A PRELUDE TO THE WELFARE STATE:
THE ORIGINS OF WORKERS’ COMPENSATION 3 (2000).

6
 It is important to note that workers’ compensation statutes are the product of compromise between
labor and management (among other interests).68 Nearly all of the deals struck in the states included a
causation element.69 Courts are modifying the agreement by eliminating this element.

The problem of disregarding the “arising out of” component is illustrated in Carroll v. W.C.A.B.70
According to Larson, the court in Carroll “adopt[ed] what amounts to a positional-risk stance without
actually employing the term.”71 The claimant sustained an eye injury while attempting to suppress a sneeze
at a meeting with co-workers, which astoundingly left him blind in one eye.72 The court awarded benefits
because the claimant was “injured while actually engaged in furtherance of the employer’s business or
affairs.”73 The problem with the court’s analysis is that it only focuses on the “in the course of” element
without finding the employment to be a causative factor. The fact that the claimant was on duty at the time
of the accident does not change the fact that suppressing a sneeze was the actual mechanism of injury, to
which the court never demonstrates a connection to the employment.74 Under the court’s analysis, it is
difficult to imagine an injury the claimant could have sustained at that meeting table that would not have
ruled compensable.

B. The positional-risk doctrine inefficiently allocates liability.

An important goal of workers’ compensation should be accident prevention. Before workers’

compensation, employers had little incentive to prevent employee accidents.75 Injured employees were only
entitled to compensation if they could demonstrate negligence on behalf of the employer. Furthermore,
employers could raise the common law defenses known alternatively as the “unholy trinity” or “three
wicked sisters”—contributory negligence, the fellow servant rule, and assumption of the risk.76 As Prosser
has noted, “[t]he effect of these defenses was to relieve the employer of responsibility even though he, or
his servants, had failed in respect of the specific obligations for the protection of the servant.”77

It would be incorrect to say, though, that the employer under the common law had no incentive to
prevent industrial accidents. Under the economic theory of compensating wage differentials, workers in
more dangers vocations commanded higher wages.78 Thus, employers had an incentive to prevent worker
accidents in order to keep wages down, as long as the cost of preventing the accidents was lower than the
wage premium.79 Similarly, the common law system provided a slight incentive for employers to take
incentives as they feared large jury awards, which would include both actual financial losses (lost wages

68
See id. at 120-47.
69
1 LARSON, supra note 1, § 3.01, at 3—2.
70
750 A.2d 938 (Pa. Commw. Ct. 2000).
71
1 LARSON, supra note 1, § 3.05, at 3—6.
72
Carroll, 750 A. 2d at 939-40. An Ohio appellate court also awarded compensation for a claimant who
dislocated a shoulder while sneezing. Grimes v. Mayfield, 564 N.E.2d 732 (Ohio App. 1989).
73
Carroll, 750 A.2d at 941, quoting Workers’ Compensation Act, 77 PA. CONS. STAT. § 411(1)(2000)
(emphasis omitted).
74
There are situations where such a sneezing accident might be compensable under the increased-risk
doctrine. For example, if the workplace contained some agent, such as mold or dust, that caused the
claimant to sneeze, the injury would be compensable. Similarly, if the claimant’s supervisor had an
irrational fear of germs and reprimanded employees for sneezing, this would be compensable because the
supervisor’s rule made stifling the sneeze an employment duty.
75
FISHBACK & KANTOR, supra note 67, at 11.
76
W. PAGE KEETON, GEN. ED., PROSSER AND KEETON ON THE LAW OF TORTS § 80, at 569-72
(5th ed. 1984)[hereinafter PROSSER & KEETON].
77
Id. at 569. See also LINDA DARLING-HAMMOND & THOMAS KNIESNER, THE LAW AND
ECONOMICS OF WORKERS’ COMPENSATION 7-8 (1980).
78
FISHBACK & KANTOR, supra note 67, at 15. See also WILLIAM M. LANDES & RICHARD A.
POSNER, THE ECONOMIC STRUCTURE OF TORT LAW 309-11 (1987); Price V. Fishback & Shawn
Everett Kantor, “Square Deal” or Raw Deal? Market Compensation for Workplace Diseminities, 1884-
1903, 52 J. ECON. HIST. 826 (1992).
79
FISHBACK & KANTOR, supra note 67, at 16.

7
and medical expenses), and pain and suffering awards. 80 This threat of liability was of course tempered by
the existence of the common law defenses, which ensured “the great majority” of injured employees
received no compensation at all.81 Finally, in the case of skilled employees, the cost of training a
replacement provided incentive for the employer to prevent industrial accidents.

That being said, however, the passage of workers’ compensation statutes clearly increased the
incentive for employers to prevent accidents.82 This was accompanied by a corresponding decrease in
incentives for employees to prevent accidents,83 although workers were not completely devoid of such
incentives. The first, and most obvious, incentive a worker possessed was a natural aversion to the physical
pain of industrial injuries.84 Second, benefits were typically limited by statute to two-thirds of the
employee’s average weekly wage to reduce the moral hazard problem.85 Third, by denying compensation
for injuries resulting from personal risks, workers’ compensation statutes provide incentives for a worker to
exercise caution in personal activities unrelated to the employment. Finally, because workers’
compensation benefits are largely offset by lower wages,86 an employee has an incentive to keep insurance
premiums down in order to keep wages up.

Thus, with the passage of workers’ compensation statutes, both employers and employees had
incentives to prevent industrial accidents. A bilateral precaution regime, one in which both parties have
incentives to exercise care, is more efficient than a unilateral precaution regime.87 The impact of workers’
compensation statutes on accident rates is worth examining. In terms of nonfatal accidents, the rates
increased or decreased after the passage of workers’ compensation statutes based on the increase in
employer incentives relative to the decrease in employee incentives, with some variance based on the
industry and locality.88 It may be safe to conclude that workers’ compensation had slight impact on nonfatal
industrial accident rates taken as a whole because incentives merely transferred from employees to
employers.89

80
Id. at 28-30.
81
PROSSER & KEETON, supra note 76, § 80, at 569.
82
FISHBACK & KANTOR, supra note 67, at 77-78. In the manufacturing industry, employers increased
supervision of employees and installed safety devices to prevent injuries. Id at 81.
83
Id. See also Roger J. Butler, et al., More than Cost Shifting: Moral Hazard Lowers Productivity, 65:4 J.
RISK & INS. 671 (1998).
84
As Mark Twain wryly observed, the monetary compensation awarded as a result of an accident is often
poor consolation:

I have had people come to me on crutches, with tears in their eyes, to bless this beneficent
institution. In all my experiences of life, I have seen nothing so seraphic as the look that comes
into a freshly mutilated man’s face when he feels in his vest pocket with his remaining hand and
finds his accident ticket all right.

Mark Twain, Speech to Allyn House, Hartford, Conn. (Oct. 12, 1874), available at
www.twainquotes.com/insurance.html.
85
FISHBACK & KANTOR, supra note 67, at 8. This is reinforced by findings that the number of accidents
reported and duration of time off tend to increase as workers’ compensation benefits increase. Richard J.
Butler, Economic Determinant’s of Workers’ Compensation Trends, 65:4 J. RISK & INS. 383 (1994);
Michael J. Moore & W. Kip Viscusi, Have Increases in Workers’ Compensation Benefits Paid for
Themselves?, in BENEFITS, COSTS, AND CYCLES IN WORKERS’ COMPENSATION 18-19 (1990).
The impact of the statutory benefit cap is mitigated by the fact that workers’ compensation benefits are not
taxable. Internal Revenue Code of 1986, as amended, 26 U.S.C. § 104(a)(1)(2008).
86
FISHBACK & KANTOR, supra note 67, at 69. See also Moore & Viscusi, supra note 85, at 1. Note that
the wage offset for union workers was “substantially smaller” than the offset for nonunion workers.
FISHBACK & KANTOR, supra note 67, at 69-70.
87
ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 304 (3d ed. 2000).
88
FISHBACK & KANTOR, supra note 67, at 78, 79-82.
89
Id. at 78.

8
 Fatal industrial accidents, on the other hand, were reduced by the implementation of workers’
compensation systems.90 Fishback and Kantor propose a couple of theories to explain the differences
between the accident rates in fatal and nonfatal cases. First, employers have a greater incentive to prevent
fatal accidents than nonfatal ones because such accidents are more expensive to them.91 The second theory
is that the moral hazard problem is greatly diminished for fatal accidents because a dead worker does not
enjoy the benefits of compensation.92 Both theories are based on the same idea—because the stakes are
higher for fatal accidents, there is a greater incentive for safety for both employers and employees.

Because safety incentives can impact the accident rate, it is important to apply such incentives
efficiently to keep down the cost of doing business and, more importantly, to keep workers healthy. It is
most efficient to hold employers liable for accidents over which they exercise some control. The nature of
the employment relationship is such that the employer should properly be viewed as exercising control over
a wider sphere than is assumed in typical liability allocation analysis. For example, because employers have
the ability to prevent negligence by employees through training, supervision, and safety rules, there is no
problem assigning liability to employers when employees’ injuries are the result of their own negligence.

The problem occurs when courts assign liability to the employer for situations in which it is
impractical or impossible for the employer to exercise any control. In such cases, the employee moral
hazard problem discussed above cannot be offset by increased precaution on the part of the employer.
Higher accident rates are therefore likely.

The significance of employer control is demonstrated in Odyssey/Americare of Oklahoma v.

Worden.93 The Oklahoma Supreme Court in Odyssey/Americare made note of the fact that it had adopted
the positional-risk doctrine in a previous case,94 but that the legislature subsequently amended the statute to
reinstate the increased-risk doctrine.95 The claimant in this case slipped on wet grass in her own yard while
leaving home to go to a work-related appointment.96 The court noted that “[b]ut for the employment, [the
claimant] would not have left the house”97—indicating this would have been compensable under the
positional-risk doctrine. Applying the increased-risk test, though, the court denied compensation.98 The
Oklahoma Supreme Court properly allocated liability in this case. The claimant was in a much better
position to prevent the accident than her employer. The employer exercised no control over the claimant’s
lawn or her method of traveling from her house to her car, so it would be inefficient to allocate liability for
such accidents to the employer.

C. The exceptions to the increased-risk doctrine are not significant enough to warrant a new rule.

90
EDWIN J. FAULKNER, ACCIDENT-AND-HEALTH INSURANCE 27 (1940)(finding a decrease of
over 55% from 1913 to 1938). See also FISHBACK & KANTOR, supra note 67, at 78. Fatalities actually
increased in the coal mining industry after the passage of workers’ compensation statutes; this is likely
explained by the difficulties employers in the coal industry had relative to manufacturing employers in
taking affirmative steps, such as increasing supervising or installing safety equipment, to reduce accidents
at low cost. PRICE V. FISHBACK, SOFT COAL, HARD CHOICES: THE ECONOMIC WELFARE OF
BITUMINOUS COAL MINDERS, 1890-1930, 116-26 (19922); FISHBACK & KANTOR, supra note 67,
at 81.
91
FISHBACK & KANTOR, supra note 67, at 78.
92
Id. They also raise a third theory, that employees began reporting more of their accidents once they could
actually benefit from doing so. Id. 78-79.
93
948 P.2d 309 (Okla. 1997).
94
Fox v. Nat’l Carrier, 709 P.2d 1050 (Okla. 1985).
95
Odyssey/Americare, 948 P.2d at 312. See Workers’ Compensation Act, OKLA. STAT. tit. 85, § 3(12)(a)
(2008)(“Only injuries having as their source a risk not purely personal but one that is reasonably connected
with the conditions of employment shall be deemed to arise out of employment”).
96
Odyssey/Americare, 948 P.2d at 311.
97
Id.
98
Id. at 313.

9
 Another argument in favor of adopting the positional-risk doctrine is that the exceptions to the
increased-risk doctrine merit abandoning that rule. One such exception is the street-risk doctrine, which
covers street or highway injuries.99 Justice Pound of the New York Court of Appeals provides a
justification for the street-risk doctrine as well as describing street risks, by “paint[ing] this Hogarthian
picture of the city street and its perils”100:

The street becomes a dangerous place when street brawlers, highwaymen, escaping criminals, or
violent madmen are afoot therein as they sometimes are. The danger of being struck by them by
accident is a street risk because it is incident to passing though or being on the street when
dangerous characters are abroad.

Particularly on the crowded streets of a great city, not only do vehicles collide, pavements become
out of repair, and crowds jostle, but mad or biting dogs run wild, gunmen may discharge their
weapons, police officers may shoot fugitives fleeing from justice, or other things may happen
from which accidental injuries result to people on the streets which are peculiar to the use of the
streets and do not commonly happen indoors.101

There are currently two versions of this rule applied by increased-risk states. The increased-street-
risk test awards compensation for street injuries sustained by “certain classes of employees whose duties
carried them into the street more often than ordinary people,” such as “delivery workers, collectors,
traveling employees, salesmen, teamsters, inspectors, journeymen electricians, insurance workers, icemen,
chauffeurs, news carriers, and messengers.”102 These cases do not offend the increased-risk doctrine
because such employees, while exposed to the same kind of risks common to the public, are exposed to
these risks to a greater degree.103

The actual-street-risk test holds that “if the employment occasions the employee’s use of the
street, the risks of the street are the risks of the employment” even if the job does not require frequent
exposure to the dangers of the street.104 This test is the majority rule, which Larson deems significant
because it is the only area where the increased-risk doctrine has been supplanted by another rule.105 This is
not so radical a departure as Larson indicates, though, and fits conceptually much better with the increased-
risk doctrine than the positional-risk doctrine.

Under the increased-risk doctrine, an employee injured by some dangerous element of the
workplace will generally receive compensation. The actual-street-risk test simply extends such coverage in
cases where the workplace happens to be somewhere other than a building maintained by the employer.
This remains consistent with the goal of efficient liability allocation as well, because the employer retains
control. The employer can reduce the likelihood of accidents due to street risks through training (e.g.,
driver safety), safety rules (e.g., required seatbelt use), and by exercising control over the route and

99
1 LARSON, supra note 1, § 6.00, at 6—1.
100
1 id. § 6.05, at 6—7.
101
Katz v. A. Kadans & Co., 134 N.E. 330, 331 (N.Y. 1922). Other risks covered by this doctrine include:

stray bullets, a bomb dropped on Wall Street, or even placed in a plane, potions of roofs or
buildings falling in a windstorm, trees falling on the highway, a shot by a sentry whose challenge
was not heard by a taxi driver, a brick or an apple thrown by a small boy, a stabbing by a lunatic, a
toy torpedo thrown by a child, or footballs and baseballs flying into the streets.

1 LARSON, supra note 1, § 6.05, at 6—7-8 (citations omitted).

102
1 LARSON, supra note 1, § 6.01, at 6—2, § 6.03, at 6—3 (citations omitted).
103
1 id., § 6.01, at 6—2. “[A] court that has gone this far has neither abandoned the common-to-the-public
test nor assumed any advanced or exceptional position.” 1 id., § 6.01, at 6—3. But see United Serv. Ins. Co.
v. Donaldson, 48 So. 2d 3 (1950) (applying the increased-street-risk test for street risks after finding it to be
an exception to the increased-risk doctrine).
104
1 LARSON, supra note 1, § 6.04, at 6—4.
105
Id.

10
itinerary (e.g., instruct the employee to avoid dangerous neighborhoods or to avoid travelling at night). The
street-risk doctrine is thus perfectly consistent with the increased-risk doctrine and not cause for abrogating
that rule.

Another common exception to the increased-risk doctrine involves unexplained accident cases.
Most significant among these are unexplained death cases. The majority of “courts will indulge a
presumption or inference that the death arose out of the employment.”106 The practical justification of such
a rule is that where “the death itself has removed the only possible witness who could prove causal
connection, fairness to the dependents suggests some softening of the rule requiring claimant to provide
affirmative proof of each requisite element of compensability.”107 The exception for unexplained deaths in
increased-risk jurisdictions is really more of an issue of evidence than a philosophical shift.

Nonfatal unexplained fall cases are another matter. In an early English case,108 an employer
received compensation for a fall on a railway platform despite a lack of evidence of slipperiness or defects
in the platform. Awarding compensation for unexplained falls has attained majority rule status,109 even in a
number of increased-risk states.110

It is important to distinguish unexplained falls from idiopathic falls. Idiopathic falls are caused by
internal or inherent problems unrelated to the employment,111 such as heart attack,112 epilepsy,113 seizure,114
knee derangement,115 and a malfunctioning leg brace.116 Injuries resulting from idiopathic falls are not
compensable unless “the employment makes a contribution to the ultimate injury by having placed the
claimant on a height, or by putting in claimant’s way some object which claimant strikes in falling.”117 In
these cases, the cause of the fall is known to be a risk personal to the claimant. Unexplained falls may or
may not be the result of personal risks.

The problem with extending compensability to nonfatal unexplained falls cases is that it is
unnecessary. The claimant is available to testify and few cases are really unexplained. Even if the exact
mechanism of injury is not known, inferences can be drawn from the circumstances to suggest whether the
accident was related to the employment. There is also a real danger of perjury; in questionable cases, an
employee can simply “forget” how the fall occurred.118 For these reasons, the unexplained fall exception is
poor justification for abrogating the increased-risk doctrine.

V. CONCLUSION

The increased-risk doctrine has been the majority rule for most of the history of workers’
compensation law, while the positional-risk doctrine remains a minority rule thirty-five years after Larson’s
call for a new regime, and with good reason. The positional-risk doctrine ignores the “arising out of”
component of the statutory language. Additionally, the positional-risk doctrine inefficiently allocates

106
1 id. § 7.04(2), at 7—22. See 1 id. § 7.04D(2).
107
1 id. § 7.04(2), at 7—22. See also California State Polytech. Univ./Pomona v. Workers’ Comp. App.
Bd., 179 Cal. Rptr. 605, 607 (1982). Massachusetts extends this exception to any case where the claimant
“is physically or mentally unable to testify, and such testimonial incapacity is causally related to the
injury.” Workers’ Compensation Act, MASS. GEN. LAWS ch. 152, § 7A (2008).
108
Upton v. Great Cent. Ry., 1924 A.C. 302.
109
1 LARSON, supra note 1 § 7.04(1)(a), at 7—15. But see 1 id. § 7.04D(1)(a), at D7—11-13.
110
See, e.g., Williams G. Ceas & Co. v. Indus. Comm’n, 633 N.E.2d 994 (Ill. App. 1994); Burroughs
Adding Mach. Co. v. Dehn, 39 N.E.2d 499 (Ind. App. 1942).
111
Keefe, supra note 3, § 3.10, at 3—28. See also 1 LARSON, supra note 1, § 9.01.
112
Protectu Awning Shutter Co. v. Cline, 16 So.2d 342 (Fla. 1944).
113
1 LARSON, supra note 1, § 7.04(1)(b).
114
Prince v. Indus. Comm’n, 155 N.E.2d 552 (Ill. 1959).
115
Stapleton v. Indus. Comm’n, 668 N.E.2d 15 (Ill. App. 1996).
116
Leon County Sch. Bd. V. Grimes, 548 So.2d 205 (Fla. 1989).
117
1 LARSON, supra note 1 § 7.04(1)(b), at 7—18. See also 1 id. § 9.01.
118
Professor Bruce Bonds, Lecture at the University of Illinois College of Law (Jan. 29, 2002).

11
liability for industrial accidents. Finally, the exceptions to the increased risk doctrine are not significant
enough to warrant a new rule. Courts should recognize that newer is not always better and continue to
apply the increased-risk doctrine.

12