The Workers’ Compensation system is a limited benefits system that can extend for months, or even years, before any discussions of settlement occur. Before settlement discussions, a doctor must determine that an “applicant” is permanent and stationary, meaning he or she is not expected to get better or worse within the next year. An applicant is the party that opens a case at the local Workers’ Compensation Appeals Board by filling out an application for adjudication of claim after they suffer a work-related injury. Once an applicant is permanent and stationary, a large percentage of Workers’ Compensation claims are settled by Stipulations with Request for Award or by a Compromise and Release.
Stipulations with Request for Award
Stipulations with Request for Award is a settlement that occurs when the parties agree to all the issues, resulting in an award of permanent disability and future medical care. An award for future medical care is appealing to many applicants because it is a way of avoiding having to pay ongoing, out-of-pocket medical expenses for a work-related injury. Settling by way of Stipulations with Request for Award is also beneficial in that an applicant may petition to reopen their Workers’ Compensation claim within five years from the date of injury in case of a new or further disability or an increase in the disability of the original injury.
When drafting a Stipulation with Request for Award, certain information is required, including the date of the accident, the nature and extent of the applicant’s disability, the amount paid or due on account of compensation, and the duration of any further payment. A settlement award must also account for any lien claimants. Any third party that may have provided benefits to an applicant that should have been provided by the Workers’ Compensation system has a right to a lien on a settlement award.
Once the stipulations settlement is drafted, the parties will meet with a Workers’ Compensation judge in a walk-through process to finalize the process of getting the settlement agreement approved. If the settlement terms are found to be consistent with medical records and evidence, a Workers’ Compensation judge will approve the stipulation, making the agreement binding on the parties. A Workers’ Compensation judge will also review a settlement to ensure that the defendants are given credit against a settlement award if disability compensation was advanced to the applicant.
Compromise and Release
A Compromise and Release is a settlement that terminates an employer’s liability for a work-related injury in exchange for a lump sum paid to the applicant. Unlike a Stipulation with Request for Award, a Compromise and Release usually does not provide future medical benefits. However, both types of settlements have virtually the same filing and format requirements and both must be accompanied by the same information regarding adequacy of award and proof of service on any and all lien claimants. (See LC §5003).
The terms of a Compromise and Release are listed in the settlement. The agreement must be witnessed by two disinterested witnesses or by a notary public. A Compromise and Release must also be signed by all attorneys prior to being presented to a Workers’ Compensation judge for approval. A signed Compromise and Release is then presented to a Workers’ Compensation judge for review of adequacy of benefits being awarded to the applicant. (See LC §5001).
Signing away the right to future medical benefits is a serious decision, so a Workers’ Compensation judge will want to ensure that an applicant understands that they will bear the costs to treat their injury once the settlement is approved. When an applicant has representation, he or she is protected by their attorney who will ensure that an informed decision is made and ensure that the settlement is adequate for purposes of a Workers’ Compensation judge’s approval. An unrepresented applicant has no such advocate therefore their settlements typically receive greater scrutiny by the judge, which can cause settlement proceedings to be delayed. However, a Workers’ Compensation judge will generally find a Compromise and Release adequate and order approval if the settlement amount is supported by medical reports and other evidence.
Of course, each individual case will have its own set of facts, which will dictate what options an applicant may have. The above explanation is a broad overlook of what the two main types of settlements look like under the Workers’ Compensation system but the information is not exhaustive.
The Workers’ Compensation system can be confusing and an applicant may not understand his or her rights after they are injured on the job. A beneficial solution to getting questions answered is to obtain a Workers’ Compensation attorney. A Workers’ Compensation attorney knows the labor code and can help navigate through the Workers’ Compensation system and explain in plain terms what the process is for settling a worker’s compensation claim.
Mastagni Holstedt, A.P.C. is the largest firm in Northern California that represents applicants and offers a complimentary consultation to those seeking representation. If you have been injured at work and want to discuss your case and the possibility of representation, please call our office at 916-446-4692 to set up an appointment with a Workers’ Compensation attorney.
