Attorneys for injured workers are challenging new amendments to California’s permanent disability compensation law that Governor Arnold Schwarzenegger has forced into law.

At the centre of the case is the assertion that the new permanent disability rating schedule will provide benefit levels well below those guaranteed in the California constitution.

The Schwarzenegger schedule uses standard criteria from American Medical Association guidelines and data from empirical studies to ascertain work-related disabilities and calculate benefits. It came into effect on January 1 as part of a package introduced last April to overhaul what had become a highly expensive system. The reforms have highlighted the clash of interests between insurers and injured workers.

Industry observers are pleased with the effect – the cost of workers’ comp insurance has fallen drastically and claims have decreased. But a study by the University of California has predicted negative effects for workers, including a disability rating 28% lower than before.