Settlement of a Workers Compensation Claim
Over the years, in representing our clients, we have heard the questions over and over again-Why Should I settle my case? When should I settle? How do I know how much is fair?
As we approach our discussions with our clients, we find it helpful to go through, step by step, the factors that go into a potential settlement of an injured worker’s case.
This article is lifted from portions of my book, The North Carolina Workers Compensation Guide to Settlements: Should I, When to, and How Much? which is available for free download right now on this website.
The book is based on my knowledge and research of the law and participation in numerous successful NC Workers Compensation Settlements over the years, and the types of discussions I have had, and continue to have, with injured North Carolina workers in connection with those settlements.
We have also taken into account and attempted to anticipate the likely effect of recent changes in the law that will unfortunately have a mostly negative impact on the rights of injured workers in North Carolina.
This book is essentially the answers to the questions our clients or other people who call our office often have about settlement of a North Carolina Workers Compensation Case.
My goal in writing this Guide was to create a set of guidelines and structure to help injured workers in North Carolina answer the big three questions:
HOW do I get my case settled?
WHEN, if ever, do I consider trying to settle my case?
HOW MUCH do I get?
But before we even get to those questions, there is really, a more preliminary question that needs to be answered—
WHY would I even consider settling my case?
After all, if you have an attorney, aren’t they supposed to be aggressive? We’re talking about settling a case, before we even talk about preparing a case to go to trial. What about my day in Court?
YOU ARE NOT BEING A ‘WIMP’–YOUR POWER IN COMP CASES IS LIMITED
I mean, doesn’t it seem to be sort of a ‘wimpy’ move to be talking about settlements?
First, to be sure, there is some truth to that statement in some instances. You need to know that not all cases are ‘ripe’ for settlement.
For instance, if you have a DENIED case, where the compensation carrier has denied they are responsible to pay you any benefits, or have denied an important portion of your case such as certain types of medical treatment, etc, then it may not make sense to go ‘groveling’ to them by asking for, or agreeing to, a settlement.
The best way to resolve those issues may, in fact, be a hearing before the North Carolina Industrial Commission. That is something that you will have to decide with your attorney.
The goal at a hearing is to arrive at a posture in your case that is essentially an accepted case, meaning, the comp carrier must pay you your comp checks each week and cover all your related medical bills, in some cases, for the remainder of your life.
But those many situations where part, or all of the claim are denied are too intricate and varied to break down into any general discussion of settlements.
For our purposes here, we are going to ASSUME that you have an accepted claim, or a mostly accepted claim, meaning, the comp carrier is paying all your benefits, or you have already successfully brought your case to a posture where this is taking place through a hearing. There may be some minor disputes remaining here and there, but you have been getting your medical bills paid for by the comp carrier and you have been getting your comp checks while out of work.
We are also going to assume that you have essentially completed your medical treatment, and that your doctor has released you from care, and that you have reached maximum medical improvement (MMI). Even if you do have some ongoing treatment, you have at least reached a “plateau” in your treatment. By “plateau” we mean that although there may be some future treatment recommended by your doctors, there is no major treatment, such as surgery, that is currently scheduled or imminent. (See further discussion below as to ‘when you should never settle your case’).
So again, though, we have to get back to our question and examine– why would you want to settle as opposed to go to a hearing in an accepted claim? Can’t you get more money at a hearing?
Insurance company’s choice to participate is voluntary. Here’s the deal. Because workers compensation is a “pay-as-you-go” system, meaning the comp carrier only has to pay you 2/3rds of your average weekly wage each week, one week at a time, plus pay for medical bills, any lump sum settlement is completely voluntary on the part of the insurance company. That means there is really no legal way to “force” the insurance company to enter into a settlement with you.
You may say, well what about going to “trial”? Can’t I get a big verdict against my employer for my future damages, medical bills, and all the pain and suffering my injury has caused me and is likely to cause me in the future?
Of course, if you had a right to a jury trial in your workers comp case, that would a very reasonable question to ask.
But, unfortunately you do not have the right to a jury trial in a workers compensation case. Nor is ‘pain and suffering’ a component of anything that you are entitled to in a North Carolina Workers Compensation case.
You do have the right to a hearing before the North Carolina Industrial Commission, but in most instances, if you go to a hearing in front of the Industrial Commission, on an accepted case, unless there is a substantial amount owed to you in arrearage of TTD, (temporary total disability payments) all that the Industrial Commission is empowered to do is to decide if you are entitled to continue to receive your weekly check and medical benefits— or not.
In other words, unless there is something to argue about like a whole bunch of comp checks the employer didn’t pay you when they should have, the Commission has no power to Order the comp carrier and employer to pay you a pile of money. All they can decide is whether or not you should continue to receive your benefits.
And if you have an accepted claim, meaning, they are paying you, why would you risk that if there was nothing to gain? Of course, the answer is, you would not.
WHY WOULD THE INSURANCE COMPANY AND EMPLOYER EVER WANT TO SETTLE?
Why then, would an insurance company want to enter into a settlement with you— meaning, pay a lump sum of money to you to settle your case, if all they have to do is pay a few hundred dollars each week for your weekly comp check, and also in ‘dribs and drabs’ for your medical care?
Why wouldn’t they merely sustain the status quo by continuing to simply pay out your weekly checks and pay for ongoing medical treatment?
The answer to that question is going to be somewhat different, depending on the kind of case that you have.
Very simply, the answer for all cases is, if the workers comp insurance carrier believes that it would actually be in their best interests to resolve your claim for a lump sum of money now, i.e., “clincher” your claim, rather than pay out your checks and pay for your medical treatment on a weekly basis for possibly years into the future, then they are going to want to settle. Generally, this is going to depend on the level of RISK to the insurance company.
Because you must remember, on an accepted claim, under the law, the insurance company is going to be obligated to continue to pay you a compensation check each and every week for so long as you are totally disabled (with some new limitations for cases arising on or after June 24, 2011), as well as any and all medical care related to your work injuries for the remainder of your life.).
NOTE: Under the new rules, if you are only partially disabled, i.e. under ‘light duty’ restrictions, you are limited to a maximum of 500 weeks of compensation.
Once you settle, you will release your employer and comp carrier from that long-term obligation. In other words, once you settle, they are permanently OFF THE HOOK as far as your benefits are concerned. That means a settlement or ‘clincher’ as it is called in North Carolina, is basically an exchange between the injured worker and the employer/comp carrier. You exchange your right to benefits, in some cases, lifelong benefits, for a sum of money.
That means, that at the end of the day, it’s a cold numbers game.
From the insurance company’s perspective, they are essentially paying you to eliminate any further risk to them. For example, they are going to be looking at the risk that they will be stuck with having to pay huge medical bills in the future with any potential future surgery, or even multiple surgeries. Once the claim is settled, the insurance company has eliminated that risk completely, because they are no longer responsible for any of those things, ever again.
If it appears there is little risk of additional treatment in the future, depending on some other factors in your case, the insurance company and their ‘number crunchers’ may determine it makes more sense to simply pay your comp check each week, as opposed to offering a lump sum settlement.
In other portions of my upcoming book, and in some upcoming excerpts, we will be discussing situations where you should NEVER consider settlement, and we also get into the specifics of the various kinds of Workers Comp Settlements in North Carolina, and how the new reform laws, which went into effect on June 24, 2011, are likely to change how we think about settlements of comp cases in North Carolina.
If you have suffered a work injury or occupational disease, we invite you to visit our website at www.joemillerinjurylaw.com , email me at firstname.lastname@example.org, and/or call our office toll free at 888–694-1671 to discuss whether or not your case is in the proper posture to undergo potential settlement or mediation in the near future, or what steps we can take to move your case in that direction.
Thank You for reading, and stay healthy,
Joe Miller, Esq.