In this video, we’re going to address the question we receive a lot: whether or not workers’ compensation will offer a settlement of their claim. My name is Matt Eason. I’ve been practicing workers’ compensation and personal injury law for over 25 years. We’re regularly asked a variation of whether or not workers’ compensation will offer a settlement of the claim.
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Workers’ compensation cases are typically settled, or, I should say, resolved, in two different ways. One is through what is known as a stipulation and award, and the other through a compromise and release.
A stipulation and award in a workers’ compensation case isn’t a settlement. Instead, it’s an agreement—a stipulation as to what the judge would award if you were to go to trial. So, the parties may enter into settlement negotiations for a stipulation as to what the judge would award, and then the judge issues that award. While it’s not technically a settlement of your claim, it is an agreement as to what your claim value is and payment according to the claim’s value.
Suppose the case still needs to be resolved through a stipulation award. In that case, it’s usually voluntarily resolved through a settlement agreement, commonly known as a compromise and release in the workers’ compensation arena. A compromise and release agreement takes all of your potential claims, past and future, wraps them into one specific settlement, and wipes the slate clean for everybody. That’s what’s traditionally referred to as a settlement, as opposed to a stipulation and award.
We have a backdrop between the two ways cases voluntarily settle in workers’ compensation. Statistically, most cases are resolved through a stipulation and award, and there is never a compromise and release.
In situations where you continue to be employed by the same employer, it’s rare that your case will be resolved with a compromise and release. The way the workers’ compensation system is set up to reopen claims or to file a new claim could lend itself better to a compromise and release if you remain employed by the same employer. The purpose of a compromise and release is they will wipe their hands of any future liability. But if you’re still working there, that never really happens. There’s always the risk of future liability.
In contrast, if you’ve left your employer and no longer work for that same employer, or in some cases, you may be with the employer. If they have changed workers’ compensation insurance carriers, you may find yourself in a situation where you can settle your case for compromise and release. Those cases lend themselves more to compromise and release because the carrier who is funding wants to rid themselves of the claim, and they can effectively do so because you no longer work for an employer they insure.
So, to answer whether you’re likely to receive a settlement offer in your workers’ compensation case depends on how you define a settlement offer. Suppose you’re defining it in the limited sense of a compromise and release where everybody wipes their hands of it. Then, it depends on whether or not you are still working for an employer insured by the same insurance company. In contrast, if you’re defining a settlement agreement to include a settlement of the claims by a stipulation and award. Well, then, yes. Statistically, it is overwhelming that you’ll receive a settlement offer for some amount in your workers’ compensation case.
If you’ve been presented with a “settlement offer” or compromising and release or a proposed stipulation and award and you got questions about whether you should accept that or not, I hope you consider reaching out to one of our workers compensation lawyers in Sacramento here at Eason & Tambornini.
