In reaching a settlement it is imperative that an injured worker understands the type of settlement he or she has entered into, and the effects of that settlement. Knowing the difference between these options as well as the associated risks will help an injured worker make an informed decision and avoid surprises.
Workers' compensation settlement amounts will vary based on the type of injury suffered and the severity of any permanent impairment. With that being said, studies have found that most settlement amounts total between $2,000 and $20,000.
According to a 2015 study on workers' compensation settlements and awards:
12% of workers received less than $2,000
55% of workers received between $2,000 and $20,000
13% of workers received between $2,001 and $40,000
12% of workers received between $40,001 and $60,000
8% of workers received between $60,000 and $100,000
Other factors which can influence the amount of a settlement include the quality of legal representation, whether or not negotiations are conducted, and whether or not a worker chooses to file an appeal to seek more benefits.
Below are the settlements and outcomes common in Workers Compensation.
1) Settlement by Stipulation with Request for Reward
With this type of settlement, you will receive up to a maximum of $290 per week until your settlement amount has been reached. The advantage of this type of settlement is that you will keep your right for future medical treatment paid for by the insurance carrier for the rest of your life. Keep in mind that the insurance carrier may fight your future treatment. In other words, this is not like free health insurance for you and your family, just insurance for your injury from this claim. If you are receiving Social Security Disability or Medicare benefits, your benefits may be reduced due to this settlement. Once this type of settlement has been approved by a judge, the insurance company has 30 days to start payments.
2) Settlement by Compromise and Release
With this type of settlement, you would receive the amount you would get in the first choice, but you would also get additional money on top of this amount in exchange for paying for all future medical treatment out of your own pocket. The advantage of this type of settlement is that you would receive the entire amount in one lump sum.
However, you would be responsible for the cost of all future medical treatment because of your injury. You also would not be able to reopen your claim for further benefits if your disability worsens. By giving you extra money, the insurance company has "bought" the right to not provide any further benefits to you. Once a judge has approved this type of settlement, the insurance company has 30 days to make payment.
3) Trial. In the event there is no settlement either the injured worker or the defense have the right to take the matter to trial.
There are many issues to consider when demanding a trial.
a. No guarantees
First and foremost, there are no guarantees at trial. Once your trial begins, you will likely not be able to settle your case as the defense may have already decided not to settle. While it is possible the trial judge may give you the maximum level of disability described by the medical reports, it is possible that you may get no disability and no future medical treatment if the judge does not believe you were injured at work. In some instance s a doctor has found evidence of injury however it may not be clear whether the injury actually occurred as the injured workers contends. This is a factual issue for a judge to decide, no a doctor. In some cases, our clients can be ordered to even pay back money to the defendants or lien claimants.
b. Extreme delay
The trial judge has up to 60 days to make a decision and the defendants have approximately 30 days to appeal. Even if the appeals board agrees with the trial judge, the defendants have approximately 30 days to appeal that decision. If the defendants lose all of their appeals, you may not start getting any payments until as much as four or five months after the trial date. If they win their appeals, it is possible you may get nothing or that we are ordered to have a new trial.
c. No lump sum
Even if the judge gives you an award of a percentage of disability and future medical treatment, you cannot get the money in a lump sum. Instead, the judge’s award will be almost identical as a Stipulation with Request for Award.
4) Other Aspects-
No money is deducted for taxes from a settlement or award. In certain situations the defense may be entitled to a credit for disability overpayments. If an injured worker has received State Disability payments some of those payments may need to be paid back in the event the injured worker was no longer Temporarily Disabled, yet continued received such payments. (Those payments are typically deducted from and settlement or award). Additionally the defense would be entitled to a credit for any Permanent Disability advances, as allowed by law.
The defense may withdraw any offers and proceed to Trial rather than attempt further negotiations. This has occurred on several occasions with the injured worker regretting not accepting an offer. This usually results when an injured worker “prices him or herself out of negotiations” by demanding an exorbitant amount.
Many times an injured worker believes, incorrectly, they are entitled to more money because of the length of time they were employed or because of “unfair treatment”. It is important for injured workers to understand that unlike car accidents, there is no pain and suffering available in Workers’ Compensation.
Case Study
I recently “attended” a court hearing on one of my Workers Compensation cases. I qualify the word “appeared” as it was a telephone court appearance. The Coronavirus situation resulted in the courts having to conduct hearing by way of group teleconferences.
On the day in question I was one of over 20 people on a group call while the judge called her calendar. The first case called involved a “pro per” litigant representing himself. This individual was an inured worker who previously settled a portion of his case but and was unhappy with his choice. It was either a case of not fully understanding the nature of his settlement or “buyers remorse”.
A heated exchange between the individual in question and the judge ensued. During this exchange the individual became increasing belligerent complained his previous attorney represented he would be getting a large settlement and that the insurance company was denying him medical treatment. He also demanded the court force the defense make good on an alleged settlement. In venting his anger he let it be known he had made complaints to the State Department of Fair Housing and Employment and a US Senator. He also expressed a disregard for the other attorneys on the conference call waiting for their cases to be heard insisting the judge order the defense to pay him money he thought he was owed.
The judge, after running out of patience, set the matter for another hearing most likely to placate him. Clearly this individual either did not understand or want to understand the nature of his settlement. I suspect this individual will still not be happy with the end result of any further hearings.
As an injured worker, you must take the time to fully understand the nature of any settlement you enter into. Once the judge approves the settlement it is usually too late to change your mind.
