Do All Workers’ Comp Cases End in a Settlement?

Government and private employees file roughly 4.9 million workers’ compensation claims yearly, averaging around $41,000 [1]. While approximately $31.8 billion in cash payments are made annually for workers’ compensation settlements, this large number doesn’t mean all cases end in a settlement.

The outcome of each claim can vary widely based on individual circumstances. An experienced workers’ comp attorney can help improve your chances of receiving a fair settlement offer and assist you in navigating the legal system.

What is a Workers’ Comp Settlement?

Workers’ comp settlements are legally binding agreements between injured workers and an employer’s insurance company. These settlements provide a fixed sum to cover medical expenses and lost wages. It usually does not consider non-economic damages like pain and suffering.

Most companies must offer workers’ compensation benefits to their employees, which provide them with funds to cover a work-related injury. When an employee makes a workers’ comp claim, the insurance company may agree to resolve the claim through a workers’ comp settlement offer.

The workers’ compensation settlement may be offered as a lump sum settlement, in which the worker receives all the funds upfront, or a structured settlement, in which the funds are paid out in regular installments over months or years.

Not All Workers’ Compensation Cases End in Settlement

Settlements are common in a workers’ compensation case. Insurance companies may offer an early settlement to resolve the matter quickly, and workers may accept it to pay for their immediate medical needs after a workplace injury.

Though workers’ compensation settlements work well for some instances, not every workers’ comp claim will end in a settlement. There are other options, particularly for those who have ongoing medical expenses due to a complicated injury.

Pros and Cons of Settlements

Choosing a settlement in a workers’ comp case can have positive and negative effects, so it’s important to consult an experienced workers’ compensation attorney before signing any paperwork.

Some of the pros of settlements include:

• Faster Resolution – Accepting a workers’ comp offer can satisfy immediate needs after a workplace injury prohibits the individual from working. It is useful for helping injured workers pay for everyday household expenses.
• Financial Certainty – Settlement agreements offer a clear-cut resolution that shows the injured worker exactly how much they can expect to receive. They can also choose between a lump sum or structured settlement for their workers’ comp benefits, enabling them to find a solution that fits their needs.

However, there are downsides to accepting a settlement offer as well, including:

• Legally Binding – The workers’ comp settlement process concludes in a legally binding offer, which means that the worker cannot renegotiate for further compensation. Those who have suffered a permanent disability that requires ongoing medical treatment may run out of money.
• Potential for Lower Compensation – Many workers’ comp cases that end in a settlement may receive less than those negotiated differently, which may not cover future medical expenses.

Those considering a workers’ comp settlement offer should consult with an experienced attorney before signing a settlement agreement to ensure they receive fair compensation.

Factors Affecting the Likelihood of Workers’ Compensation Claim Settlement

While a workers’ comp settlement is not always guaranteed, certain circumstances can make it more likely.

Severity and Permanency of the Injury

Insurance companies may be more likely to offer a settlement if the workplace injury leads to serious injury or permanent disability, often resulting in future medical costs or lost wages.

Because a settlement cannot be renegotiated, the insurance company would not have to pay ongoing benefits beyond what is included in the original structured settlements or lump sum.

A workers’ comp lawyer will often encourage you to wait until you have reached maximum medical improvement (MMI) so that the full extent of your injuries is known and your medical bills can be more accurately assessed. This strategy ensures that your workers’ comp offer considers all of the facets of the accident and that you receive a fair settlement.

Clarity of Liability

Liability also affects the likelihood of a workers’ comp settlement. If it’s clear that the employer is at fault, the insurance company will be more willing to settle, as this releases them from liability for future medical bills and other needs. Workers’ compensation cases where multiple parties are at fault may lead to litigation.

Insurance Company’s Approach

An insurance company willing to negotiate may be more willing to offer a workers’ compensation settlement. Additionally, if the worker has a strong case, the insurance provider may wish to approve a settlement amount, as they recognize they may be more likely to pay more medical benefits otherwise.

Jurisdictional Laws and Regulations

State-specific laws can impact the procedures in a workers’ comp case. It is crucial to work with an experienced lawyer familiar with the laws in your given jurisdiction, as this ensures you receive all the benefits you are entitled to.

Alternatives to Workers’ Compensation Settlements

Though a workers’ comp settlement is the most common and well-known way to seek compensation after a work-related injury, other options exist. These include mediation, arbitration, or a trial before a workers’ compensation judge.

Mediation

Mediation in a workers’ compensation claim means that the insurance company and the injured worker present their case before a neutral third party, who will assist them in coming to a mutually agreeable sum. The mediator ensures that all parties understand one another; they do not pass down a judgment or provide legal advice.

Mediation allows all sides to be considered. Trained mediators help reframe issues and can be helpful when strong emotions are involved so neither party makes unfair accusations.

When mediation is successful, all parties will sign a contract agreeing to the terms and conditions outlined, which is considered legally binding. The mediator does not decide the amount and only facilitates successful negotiation between the involved parties. Your lawyer is encouraged to be at mediation to offer you legal counsel.

Arbitration

With arbitration, a neutral party will make a binding decision on your case. The arbitrator is typically a private third party with legal experience, such as a retired attorney or judge, who both parties approve.

The process works similarly to a court case but is faster and more informal. The arbitrator will hear arguments from both sides, review all the available evidence, and then render their opinion, which is called an award of arbitration. This award will then be confirmed by the appropriate court of the jurisdiction and rendered as a legal judgment.

An award of arbitration cannot be renegotiated or disputed, potentially resulting in you receiving less compensation than you are entitled to. You will not typically have the right to appeal the decision, and it is not subject to oversight by a jury of your peers.

Trial Before a Workers’ Compensation Judge

If the insurance company refuses to approve a fair settlement, your workers’ compensation lawyer may file a lawsuit and take the case to trial. This step involves presenting the evidence of the workers’ compensation claim before a judge, who then decides how much you should receive.

There are both benefits and drawbacks to this approach. Sometimes, you may receive more money than you would in a settlement, especially as the judge will consider future medical needs and additional costs like physical therapy.

However, if the judge decides against you, you may receive nothing and have spent significant time waiting for your workers’ comp benefits. An experienced lawyer will help you determine whether filing a lawsuit is a good option in your case.

How a Workers’ Compensation Attorney Can Help You

Legal representation ensures you receive a fair workers’ comp offer. Lawyers have the knowledge and experience necessary to successfully navigate the settlement process in accordance with the employment law in your area.

Evaluating Settlement Offers

When insurance companies offer a settlement, it can seem like fair compensation, but a Chicago workers’ comp attorney will understand how much is typical in cases like yours. They will also consider all facets of your injury, including the full extent of your potential medical treatment, your time off work, and your future needs.

Additionally, a workers’ compensation attorney will consult with professionals who will accurately assess your potential medical improvement and what issues you may face in the future so that these can be considered in your overall offer.

Negotiating with Insurance Companies

Insurance companies do not want to offer a settlement that fairly represents your needs, as this cuts into their bottom line and forces them to raise premiums. They may push you to settle quickly or provide a significantly lower offer than is acceptable based on your injuries.

Additionally, they may drag out the process for as long as possible, making you feel pressured to accept anything to pay your delinquent bills.

By securing help from a personal injury lawyer, you will gain access to their negotiating skills and benefit from their familiarity with insurance companies’ tactics.

An attorney will negotiate with the insurance provider on your behalf, helping to secure a settlement amount based on the specifics of your case. Not only does this spare you stress while recovering, but it also ensures you have the best possible chance of being offered an amount that considers all your current and future needs.

Representing Clients in Court

While many workers’ compensation cases end in a settlement, it is not always guaranteed. Complicated cases with significant money on the line or those without clear-cut liability may require mediation, arbitration, or trial.

An attorney will advise you on whether the settlement offer is fair and your options if the insurance provider isn’t willing to follow through. They will advocate for your rights and interests throughout the process, presenting your case to third parties.

Most importantly, they will ensure that all legal paperwork is filed properly so your case is not dismissed on a technical basis. Lawyers protect you from these hazards because every jurisdiction has slightly different procedures.

Reach Out to a Workers’ Compensation Lawyer Today!

Every workers’ compensation claim is different, which is why it is crucial to consult with an attorney before agreeing to a settlement. At Rosenfeld Injury Lawyers, we protect workers’ rights and represent their interests throughout the settlement process.

We have recovered millions in damages for injured workers nationwide, forcing insurance companies to pay their fair share. To schedule a free consultation about your case, call us at (888) 424-5757 or fill out our contact form.

References: [1] Simply Insurance

All content undergoes thorough legal review by experienced attorneys, including Jonathan Rosenfeld. With 25 years of experience in personal injury law and over 100 years of combined legal expertise within our team, we ensure that every article is legally accurate, compliant, and reflects current legal standards.