We probably all know someone who was hurt on the job, filed a workers’ compensation claim and eventually received a settlement. In the 28 years that I have been handling work comp claims, I have come to learn that most people assume a “settlement” is a standard, guaranteed and inevitable result in a Minnesota work comp claim. It isn’t.
What, no settlement?
Let me explain. In the majority of cases where a lawyer is involved or there are disputes, there will eventually be a settlement – but not always. There is no guarantee or entitlement to a “settlement” in a Minnesota workers’ compensation claim. Instead, settlements occur at some point in a claim because the parties mutually agree to settle their disputes in exchange for a certain amount of money. In that regard, it’s no different than any other type of legal action where the parties agree to compromise and end their dispute.
Many claims just run their natural course and will end, without any type of “settlement”. For example, let’s assume that you injured your shoulder at work, had successful arthroscopic surgery and missed 3 months of work. The work comp insurance company voluntarily paid your wage loss benefits and all medical and vocational rehabilitation expenses. You return to your previous job at your previous wage. Your surgeon then gives you a 6% Permanent Partial disability (PPD) disability rating and the insurance company pays that. The claim would end at that point without any additional payment of benefits and no “settlement”. If you need additional medical care or lose more time from work at some point down the road, your claim could be reopened and additional benefits paid at that time.
When, how and why do work comp settlements happen?
To understand why a case might end with a settlement, you’ll need at least a basic understanding of the benefits available in a Minnesota work comp claim. As I explain to my clients during our first meeting, there are only four basic types of monetary benefits that you might receive under Minnesota workers’ compensation laws (these are very brief descriptions, you can find more details in some of our other blog posts or here).
Temporary Total Disability benefits (TTD). These are benefits paid to someone who is off work completely because of a work injury. (I won’t go into more detail about TTD benefits for the purposes of this article – this topic will be a separate future post).
Temporary Partial Disability benefits (TPD). These are partial wage loss benefits paid to someone who is working after an injury, with physical restrictions, but earning less than his or her pre-injury wage.
Permanent Total Disability (TTD). These are benefits paid to someone who is off work completely because of a work injury and is permanently unemployable. (See this previous post for details)
Permanent Partial Disability (PPD). This is compensation paid if you have suffered a permanent impairment which can be rated (as a percentage) under the workers’ compensation disability schedules.
Every case and every injury is different, so some or all of the available types of benefits might be payable in any given case. There are limits on the number of weeks you may receive TTD and TPD benefits and there are also triggering factors and events which might allow the insurance company to discontinue wage loss benefits. (That’s also the subject for another post.)
In addition to these monetary benefits, an injured worker can also be reimbursed for certain travel expenses related to medical treatment or vocational rehabilitation and job search, including retraining. There is no payment or compensation for pain and suffering in a Minnesota workers’ compensation claim. The benefits mentioned above are set by law and strictly limited. So, with that basic benefit explanation, here are some situations where settlements frequently occur:
Shortly before a workers’ compensation hearing
In my experience, this is the most common time for a case to settle. If there is a hearing scheduled before a compensation judge, it means that there are disputed issues. The disputes might involve compensation benefits, medical issues, vocational rehabilitation issues or a combination of many issues. If a judge decides the case, someone will win and someone will lose. In a work comp case, because the available benefits are clearly defined, the value of most claims can be relatively easy to calculate. Therefore, both the employee’s attorney and the insurance company attorney will usually have a pretty good idea as to what the “best case” and “worst case” outcomes might be. Obviously, everyone likes to win and nobody wants to lose. A compromise settlement at that point often makes sense for both parties.
At a settlement conference or mediation
If there are disputed issues and the case is proceeding toward a hearing, the Office of Administrative Hearings will usually schedule a settlement conference. A settlement conference involves the attorneys, the employee and a workers’ compensation settlement judge. The conference may be held in person or by telephone, depending upon where the parties and attorneys reside. Participation is voluntary and the settlement judge will assist and encourage the parties to reach a settlement of the disputed claims. If they are able to do so, the claim (or at least the claim in dispute at that point) is settled.
A mediation is simply a different format for attempting to resolve disputed claims. The parties will usually select an experienced workers’ compensation attorney to serve as a mediator. A meeting is held, typically at the mediator’s office, and the parties exchange settlement proposals and offers back and forth through the mediator. Again, if the parties can agree to reasonable terms, the case is settled.
While an appeal is pending
Sometimes the parties are unable to resolve the disputed claims and the case proceeds to a hearing. After a compensation judge issues his or her decision, the losing party might file an appeal to the Worker’s Compensation Court of Appeals. Cases are sometimes settled while the appeal is pending but before a decision is made by the Court of Appeals.
After an injured employee has returned to work
Many cases are settled after the injured worker has completed medical care and treatment and returned to work. At that point, the parties may be able to project the potential future and ongoing wage loss benefits that might be payable to the employee. If the employee has returned to work, with physical restrictions, but at a job which pays less than he was earning when injured, the insurance company may have to pay partial wage loss benefits into the future. In this situation, the insurance company is often interested in paying a lump sum to settle out potential future benefits.
These are only some of the many situations where a settlement might be reached in a workers’ compensation claim. Every settlement will have its unique terms and conditions, depending upon what the issues are and what claims are in dispute. There are also many factors which affect the amount and terms of a settlement, including:
- The employee’s average weekly wage on the date of injury
- How many weeks of benefits have been paid and how many weeks are potentially remaining?
- How strong or weak are the insurance company’s defenses?
- How strong or weak is the medical or vocational evidence?
- How old is the employee and what are his or her employment plans?
- And many other factors and circumstances specific to an individual case
This post was not intended to discuss how much your claim might be worth or whether you should settle it. As mentioned above, every case must be evaluated based on its particular facts. An experienced attorney would need to evaluate the medical evidence, the history of the claim, the nature of any disputed issues, your credibility and a number of other factors before coming up with a fair settlement value.
If you have been offered a settlement of your work comp claim, I would strongly recommend that you contact an experienced attorney before you ever agree to settle. A claims adjuster or insurance company attorney is far more knowledgeable than you are about the value of a workers’ compensation claim. Even though any settlement has to be approved by a work comp judge, you should always consult with an attorney regarding the possible settlement of any portion of your claim.
If you have questions about a settlement or any other aspect of your northern Minnesota work comp claim, please feel free to contact me at Bradt Law Offices with any questions. I am happy to speak with you anytime about your claim or make an appointment for a free consultation in our Grand Rapids office or wherever it would be convenient for you.
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