Frequent questions I'm asked:
“Can I settle my workers' compensation case?” and
“Should I settle my workers' compensation case?”
The short answers are almost always “Yes you can settle” and "Whether you should settle depends."
The long answer is that being able to settle your workers' compensation case and whether you should settle your workers' compensation if usually much more complicated that “Yes” and “It depends”.
If you're considering settling any part of your workers' compensation case, please contact me or another workers' compensation lawyer because it can be complicated.
Basic information about New Mexico's workers' compensation system you need to know when deciding on settling your case.
There are two types of workers' compensation benefits for injured workers: money benefits (also known as indemnity benefits or partial lost wage benefits) and “lifetime” medical benefits to treat work injuries. Click here for a definition of “lifetime” medical benefits.
There are other things included in the New Mexico Workers' Compensation Act, but in most cases only money and medical benefits are available to an injured worker.
There are generally two ways to settle a workers' compensation case.
Keeping the workers' compensation case open
The first way to settle a workers' compensation case is to keep the workers' compensation benefits open. This type of settlement may require negotiations to resolve an injured worker's claim for past money and medical benefits. It may also require negotiations to determine the weekly amount of the injured worker's future money benefit and the scope of future medical benefits, including the injured worker's authorized treating doctor or healthcare providers. If an injured worker is going to need future medical treatment, this is probably the best way to resolve a workers' compensation case because the worker will be able to have at least some future medical treatment for his or her work injuries.
Closing all or part of the workers' compensation case
The second way to settle a workers' compensation case is to negotiate a one-time payment from the workers' compensation insurer that “closes” the worker's claim for past and future money and medical benefits. A variation is to either close only the money benefits or only the medical benefits. Most of the time, money benefits are closed and lifetime medical benefits are left open.
The process to approve a settlement of a workers' compensation case
In either case, once a workers' compensation judge approves the settlement and the workers' compensation insurer pays the settlement money to the worker, the insurer does not have to provide the worker with any more benefits that were closed or settled even if the worker's condition worsens after the settlement.
It is important that the worker, the employer, and the workers' compensation insurer have to agree to this settlement. A worker or a workers' compensation judge cannot force the employer and insurer to agree to such a settlement.
A workers' compensation judge must have a hearing to approve the settlement. At the hearing the parties' attorneys will describe the settlement to the judge. The worker will be sworn in and asked questions regarding his understanding of the settlement. Specifically, the worker will be asked questions to confirm that he or she knows the following: what her right are under the New Mexico Workers' Compensation Act, what the terms of the settlement are (including the amount of money to paid), and that her or she are giving up the rights afforded under the New Mexico Workers' Compensation Act in exchange for payment of the money. The worker also has to confirm he or she agrees to her attorney's fee. There are other questions, but these are the most important.
This hearing is very important because the settlement terminates all or part of the worker's workers' compensation benefits forever.
Should you settle your workers' compensation case?
Deciding to settle a workers' compensation case usually depends on the facts of the injured worker's case. It may also depends on what the injured worker and his or her family need at the time, especially financial needs. Below are some things to consider when deciding to try and settle a workers' compensation case.
Will you need future medical treatment for your work injuries?
If an injured worker is going to need future medical treatment for his or her work injuries, then settling or closing medical benefits is usually a bad idea.
The only exception is when the injured worker is confident that he or she will be able to pay for future medical treatment some other way. Most often an injured worker plans to use other medical insurance to pay for future medical treatment. The problem is that another medical insurer may deny treatment if it finds out the injury was caused at work. If an injured worker is asked how he or she was injured, the injured worker must tell the truth. Lying could result in a claim of insurance fraud.
If another medical insurer discovers it has paid to treat a work injury, the other medical insurer may try to get repayment from the injured worker.
You should never use Medicare to pay for future medical treatment of a work injury after settling or closing workers' compensation medical benefits. An explanation is here.
If an injured worker is not very confident that he or she can pay for future medical treatment of a work injury, then the injured worker should not settle or close future medical benefits.
If an injured worker has made a good recovery and is very confident he or she will not need any future medical treatment or will need only minor future medical treatment, then settling or closing medical benefits may be in the worker's best interest.
Do you or your family need money?
Often, an injured worker wants to settle a workers' compensation case because he or she needs money.
If a worker is trying to avoid foreclosure or eviction, then settling a workers' compensation case MAY be a good decision. However, there may be better options than closing all or part of a workers' compensation claim to pay debts. It's possible that a workers' compensation judge may approve a lump sum advance or payment ahead of time of future money benefits to pay off debt that was created after the work injury.
Once again, before you decide to close any part of your workers' compensation case, contact me.
What if it looks like you will lose your workers' compensation case?
Sometimes workers' compensation cases are weak or worse. In those instances, it's usually better to get some money rather than nothing.
Once again, if you think this is the case, then please call me to get an evaluation of your case.
Sometimes, I see things that an injured worker does not that will improve the case.
Is it better to try and settle a workers' compensation case at the beginning?
The short answer is it depends on the facts of the case and the needs of the injured worker.
Before trying to settle, an injured worker should know, if possible, as much about the case as possible. This includes knowing what all of his or her work injuries are, what medical treatment is needed, and whether the medical evidence support the claim for workers' compensation benefits. There are certainly other considerations.
In most cases, a workers' lawyer must litigate the case to find out this information which will take time.
In any type of negotiation, including a negotiation to settle all or part of a workers' compensation case, the more information you have the better you can negotiate. I can help you get that information.
Litigation can also be used to increase the value of a workers' compensation case. Medical evidence and doctors' deposition that support the worker's claim for money and medical benefits will usually increase the value of a workers' compensation case whether you keep the case open or close all or part of the case.
However, litigation can take 6 to twelve months or longer to complete. Also, there is the risk that litigation will support the employer and insurer's defenses undercutting the value of the case.
Unless an injured worker is going to lose his or house, there is usually no reason to rush to settle a workers' compensation case. The employer and insurer are usually willing to try and settle case throughout a workers' compensation case. And, please remember a settlement early in the case almost always benefits the employer and insurer.
Deciding whether to try and settle or litigate a workers' compensation case is a complicated decision. Because it is complicated, a worker must consult and retain, if possible, an experienced workers' compensation lawyer to make the best decision.
If you are considering settling your workers' compensation case, please contact me before you make a decision.