I discuss settlement with our workers’ compensation clients every day of the week. Even people we don’t represent call on a regular basis to pick my brain about settlement. Each case has its own unique set of variables. No blueprint is available to provide answers.
Some basic principles do apply in every Florida workers’ compensation case. It is important for them to be understood.
- Neither the employer/carrier (e/c) nor the injured worker/claimant can be forced to settle a Florida workers’ compensation case. If there is going to be a settlement, it must come by agreement of the parties.
- No judge or jury can order the e/c to pay a lump sum amount for future benefits. While workers’ compensation judges can order the e/c to provide some future benefits, the payout only comes as the benefit accrues. For example, the judge can make an e/c responsible for attendant care, but the e/c only pays as the service is provided. Lump sum verdicts are the remedy in civil cases, not in workers’ compensation cases.
- There are no juries in workers’ compensation cases, only workers’ compensation judges appointed by the Governor of the state. Juries render verdicts in civil cases.
- Injured workers never receive compensation for pain and suffering in Florida workers’ compensation cases. Compensation for pain and suffering is exclusive to civil liability cases. While an employer can sometimes be sued for civil damages, it is a rare exception. It is not uncommon, however, for a third party to be sued in civil court for causing the employee’s job-related accident. For example, our office is currently prosecuting a civil action for a woman who slipped in wet paint as she was leaving work. The case is against her employer’s landlord. We settled the workers’ compensation case against her employer (and its insurance company) six months ago.
Settlement value is based on exposure. How much a case is worth at any given moment in time depends on how much the case can reasonably be expected to cost e/c in the future if it does not settle. Since the e/c is not in the business of giving gifts to injured workers, it will never settle a case for more than what it projects as its long term exposure. In fact, the e/c won’t even settle for an amount equal to its projected exposure. If a deal is to be made, it will have to be for a fraction of e/c’s worst case scenario analysis. The main reason for this is because the e/c earns money on its money. Rather than pay the full amount today, the e/c is better off investing the money and paying it off over time. Another reason why less than full exposure is paid today is because workers’ compensation claims die with the claimant. The e/c’s obligation to pay benefits ends when the claimant dies. Whatever money e/c has in reserve to meet is future obligations becomes its money with the passing of the claimant.
Factors to be considered in determining exposure include:
- The nature and extent of the work-related injuries
- Claimant’s age, education, and work experience
- Average weekly wage (AWW)
- The value of past benefits in dispute
- Date of maximum medical improvement (MMI) — see 440.02(10)
- Life expectancy
- Anticipated future medical needs
- The availability of work, including from the employer
- Receipt of other disability benefits (e.g., from SSD or private insurance)
While exposure can be the main driving force in determining settlement value, other practical considerations can have equal importance:
- The players. Each employer, carrier, adjuster and lawyer handles claims differently. Some are friendlier, more generous and cooperative, than others. Some, like many governmental agencies, have tight budgets and require the approval of expenditures at many different levels.
- The workers’ compensation judge. Some are more “conservative” than others, meaning they favor business over the individual.
- Is the employer self-insured or insured privately. Self-insured employers tend to be tighter with the money and otherwise more difficult to deal with than employers who leave claim handling up to private carriers.
Overriding all else are the workers’ compensation laws themselves. Thanks to a string of Republican governors, since 1998, and Republican-dominated legislatures, it is fair to say that Florida has one of the least worker friendly workers’ compensation systems in the nation. (Jeb Bush was far and away the most damaging of all.) To get a flavor of just how bad our laws are, read this appellate opinion: Westphal v. City of St. Petersburg.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.
While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.