When I talk with clients about the idea of settlement of a workers’ compensation claim, there are several things I always need to address. First, an injured worker does not have to settle his or her workers’ compensation claim and the employer and their workers’ compensation insurance carrier cannot make the injure worker settle your workers’ compensation claim.
In workers’ compensation claims, neither party can ever be forced to settle the claim. What I mean by this is if a case goes to hearing before the N.C. Industrial Commission, the Deputy Commissioner presiding over the hearing can not order a settlement. At the hearing, the Deputy Commissioner can address the issues of payment for any past owed medical bills, payment of any past owed disability compensation, whether further medical treatment is needed due to the injury at work in which case the medical providers will be paid as the injured worker receives the treatment from the medical provider and whether weekly disability checks are owed based on the injured workers’ inability to work or ability to only work at reduced wages. However, the Deputy Commission can never order a settle be paid based on the facts of the case.
The only time a settle occurs in the context of a workers’ compensation claim is if 2 things occur:
1. Both parties are interested in exploring settlement options.If an employer or workers’ compensation insurance carrier for the employer approaches an injured worker about settlement and the injured worker is not interested in exploring settlement, then it goes no further. The same also holds true if an injured worker approaches an employer or workers’ compensation insurance carrier for the employer about settlement and they have no interest in settlement.Therefore, in order to have a settlement for a workers’ compensation claim, both parties must be interested in exploring a possible settlement for the workers’ compensation claim.
2. Both parties agree to the terms of settlement.
In this situation, both parties agree to a certain amount the employer or workers’ compensation insurance carrier is willing to pay and a certain amount the injured worker is willing to accept in order to agree to settle the worker’s compensation claim.
What I always tell clients is the same way that a client would never just have me go to the other side right off the bat and just give them our lowest number in order to settle the claim, the other side will not just come forward right off the bat and provide us with their top number to settle the claim. The only way the parties are able to determine whether or not they can agree to terms of settlement is via negotiations.
The way these negotiations occur is that the injured worker will provide a settlement demand in order to begin the settlement negotiations. This initial settlement demand will be a figure which is higher than the injured workers’ bottom line number and a figure which is higher than what the other side is willing to pay to settle the claim. This done because the first figure from the other side is inevitably a low-ball offer. This creates a situation where all these first two figures from the parties tell us is we know a number the other side will not pay and they now know a number we will not accept to settle the claim.
Whether or not that case settles really depends on what occurs with the further negotiations between the parties. Each round of the further settlement negotiations, in order to keep this process moving forward we have to lower our settlement demand and in order to keep this process moving forward the other side has to increase their settlement offer. With each round of settlement negotiations the gap between the respective parties settlement demands and settlement offers gets smaller and smaller and these figure are getting closer and closer together.
Ultimately, every time you attempt to negotiate settlement of a claim you will reach a point where one side of the other stops. Sometimes it is us noting we do not want to go below a certain figure in order to settle the claim. Other times it is the other side indicating that they are not willing to pay more than their current figure to settle the claim. At that point in the negotiations there will still be a gap between the figures from the respective parties. It is not so much of an issue that there is a gap between the figures, the main issue is how much of a gap is there between the figures. In an instance where there is a small gap between the respective figures from the parties, sometime a little bit of compromise between the parties allow them to bridge the gap and agree to terms of settlement. However, when there is a significant gap between the respective figures from the parties this often highlights that there is no amount of compromise that allows the parties to bridge the gap between the figures and results in a case the case may not be able to settle at that point in time.
Any time there may be a potential settlement for a workers’ compensation claim I advise the injured worker to consult an attorney in order to understand what benefits they are waiving as part of the settlement and understands what benefits they can seek as part of the settlement. If there are ever in questions about the issue of settlement in your case, please feel to contact Cardinal Law Partners and speak with one of our board certified workers’ compensation specialists.