Over the years, it has become increasingly beneficial, at least in some circumstances, for employers to settle contentious Workers’ Compensation claims. Just a few short years ago, settlement of Workers’ Compensation claims was extremely rare because the parties could not settle the claimant’s right to receive further medical treatment. Medical costs are often more significant and have more impact upon the employer’s insurance premium than the indemnity benefits that the claimant may receive. Thus, without being able to settle the claimant’s right to medical benefits, the parties to a Workers’ Compensation claim in West Virginia rarely even attempted to negotiate settlements.
Over time, this has changed. In 2003, the Legislature enacted sweeping Workers’ Compensation reforms, one of which was to permit full and final settlement of claims, including medical benefits. [1] This made settlement considerably more attractive to employers, since they could avoid the costs of litigation and could add a degree of predictability and control over the costs of a given claim or claims.
Even at that time, however, settlements, once reached, had to be reviewed and approved by an administrative law judge. This process was time consuming, required an expenditure of legal fees, and was somewhat unpredictable, as judges were charged with ensuring that the agreement was fair to the claimant…a subjective endeavor to say the least.
Under our newest law and procedure, settlements are no longer reviewed or approved by the Office of Judges. The parties are free to negotiate and enter into any settlement, so long as it is not fundamentally unfair to a claimant who is not represented by counsel. This gives the parties great flexibility in establishing a mutually acceptable compromise of any claim or claims.
Furthermore, at least in the context of litigated claims, wherein the settlement will be negotiated and the agreement prepared by the counsel retained by BrickStreet to represent your business in the claim, you will not incur any legal fees in reaching and finalizing the settlement. These and other changes have greatly increased the number of claims being settled as compared to pre-2003.
Settlement, of course, is not always a good option. The claimant may demand more to settle the case than the claim is actually worth. In addition, you cannot settle an employee’s right to file future claims, and as a result, many employers are wary of settling claims when the claimant is still employed and the claimant could suffer or allege additional injuries, leading to another claim or claims in the future.
Naturally, for insured businesses, the ultimate decision regarding whether or not a claim or claims will be settled rests with the insurance company, subject to the policy’s terms and conditions. Employers, however, are often in a very good position to identify an opportunity for an economical and mutually beneficial settlement. Employers are usually in touch with their employees on a frequent basis and in a good position to understand the claimant’s unique circumstances, and thus employers can help identify when a claim might be a good candidate for settlement. If you have a claim or claims that you feel might present a good opportunity for a beneficial settlement, you should consider bringing this to the attention of the claims adjuster and/or your counsel.
If you have any questions about the claims settlement process, or any other issues you may have with regard to Workers’ Compensation, please do not hesitate to contact us.
[1] The parties still may not settle the claimant’s right to medical benefits in non-orthopedic occupational disease claims, such as claims for occupational pneumoconiosis.
