Settlement of Claim

The decision to settle your workers compensation case, the mechanism of how to settle, and or the decision to go to trial is not a decision that should be taken lightly. There are generally four ways that a California workers’ compensation case comes to a conclusion: the employee recovers completely and returns to work with no dispute over benefits not being paid or owing; the parties entered into a voluntary stipulation and award; the parties enter into a voluntary compromise and release; or the case goes to trial and the Workers’ Compensation Appeals Board judge makes a finding of the rights and responsibilities of the various parties. In this article, we will cover how permanent disability is calculated and what happens if you do not settle. We will also discuss the differences between a Compromise and Release compared to a Stipulation with Request for Award. Lastly, we discuss if you can change your mind after entering into a settlement. If you are at the stage of potentially settling your California workers’ compensation case, we highly recommend you contact one of our Sacramento Workers’ Compensation Attorneys. 

CA WC Case Settlement of Claim
How is the amount of permanent disability calculated? 

The amount of permanent disability for a California workers’ compensation claim is not at all similar to a personal injury case. In a personal injury case, the judge and jury get to hear the facts and can apply their own discretion as to what it thinks is a reasonable amount to compensate you.  

Instead, a workers’ compensation judge will use their discretion to determine the amount of your disability award, and a formula is used to calculate the amount. There are, however, discretionary portions of the formula that a good Sacramento Workers’ Compensation Attorney can assist you in maximizing your disability.  

The primary factor in the amount of disability award is the level of your physical impairment. A rating usually determines the physical impairment by either your treating physician or a qualified medical evaluator. The physician or medical evaluator is required to assess your limitations using the American Medical Association Guides. A good Sacramento Workers’ Compensation Attorney can review the findings to make sure they are consistent with those guidelines, and that the various injuries and body parts impacted have been appropriately included within the calculation. Ultimately the impairment level is expressed as a percentage.

Once you have determined the impairment percentage, the percentage of disability is then placed into a mandated formula based on the date of injury, on your age and occupation. Unfortunately, if you were injured after January 1, 2013, your reduced earning capacity is not a component of the formula.  

Unfortunately, you cannot recover more than the result of the formula provided, even if it does not seem fair or if it is not enough to support you. That is why it is critical to hire a workers’ compensation attorney to make sure that the factors going into the formula, and in particular, your level of impairment, are adequately characterized. Representing yourself in the process of the workers’ compensation case is extremely complicated, and as such, you should retain a workers’ compensation attorney to assist.

What happens if we do not agree to settle?

The decision to settle is a voluntary one. You should never allow a claims adjuster to pressure you into a settlement. Likewise, you should only settle your case after your workers’ compensation attorney has fully explained to you how your disability was calculated as well as the pros and cons of challenging that disability rating before a workers’ compensation judge. 

If you do not agree to settle, a workers’ compensation judge will review the reports from the Qualified Medical Evaluation and other relevant evidence of your impairment. Then the judge will issue a formal ruling on what they believe the impairment to be and will express that ruling in terms of a percentage. The judge will then utilize the formula above to determine the amount of your permanent disability award. The judge cannot legally increase or decrease that amount even if it does not seem sufficient.

What is the difference between a Compromise and Release compared to a Stipulation with Request for Award?

Our clients regularly ask the workers’ compensation attorneys in our office what the difference is between a Compromise and Release and a Stipulation with Request for Award. There is a HUGE difference between the two. Consequently, you should never sign one or the other without being aware of what it means to sign one and what you’re giving up.

A Compromise and Release and a Stipulation with Request for Award are unique, so reading this article can only give you a general understanding of what they accomplish, and should not be relied upon for making such an important decision as to sign or now.  However, from a big picture, to understand a Compromise and Release focus on the word “Release.”  If you sign that document, you are typically releasing the insurance company and the employer from everything identified in that release! Most releases have extremely broad language that effectively releases any and all present or potential future claims against the insurance company and employer. In other words, they pay you the amount in that claim, and you cannot go back against them for anything released, you can’t reopen your case, and traditionally have waived rights to future medical care and treatment. 

In contrast to a Compromise and Release, you may be asked to sign a Stipulation with Request for Award to avoid trial. A Stipulation with Request for Award is effectively a document where you and the other side issue into factual stipulations, usually about the level of impairment and the rights of the benefits. That stipulation is presented to the workers’ compensation judge, who then adopts those stipulations as if they had held a trial, and issues an award thereon.  Like a Compromise and Release, the terms of the Stipulation with Request for Award can vary dramatically from case to case. Still, most stipulations leave open the rights to seek future medical care for the injuries, as well as leave open the rights to timely reopen your case should facts change.

Can I change my mind after I enter into a workers’ compensation settlement agreement?

If the settlement agreement is a Compromise and Release and has been signed by all of the parties, you generally cannot get out of it especially if it has been funded. Similarly, once a Stipulation with Request for Award has been entered and the award signed by the judge, you cannot generally get out of it as well. However with a Stipulation with Request for Award, if your injury gets worse or  there are other circumstances in which a petition to reopen would be granted, you may have the ability to reopen if you do so timely.    

The choice you make when deciding to settle your case could impact your rights to future medical care, employment, and compensation for your injuries. If you are at that stage in which you are ready to settle your claim, we highly recommend you contact one of our Sacramento Workers’ Compensation Attorneys to make sure the settlement amount is fair and reasonable, and that you are signing documents that accomplish the goals you intend.