Guide to Workers Compensation Settlements
This guide will provide an overview of the two main types of settlements parties can enter into in workers' compensation cases. The first type of settlement is a Compromise and Release. The second type of settlement is a Stipulated Findings and Award.
Compromise and ReleaseA Compromise and Release (often referred to as a C&R) is a settlement that permanently resolves issues that arise in a workers' compensation case in exchange for a lump sum payment. Typically, a C&R completely resolves all aspects of a workers' compensation claim, but that is not necessarily true in all cases.
All C&Rs must be on the prescribed DWC-CA form 10214(c). Only issues specifically agreed upon by the parties in the form are resolved. Form 10214(c) allows parties to resolve the following issues: 1. earnings; 2 temporary disability; 3. jurisdiction; 4. apportionment; 5 employment; 6. injury AOE/COE; 7. serious and willful misconduct; 8 discrimination (Labor Code sec. 132a); 8. statute of limitations; 9. future medical treatment; 10. other; 11. permanent disability; 12. self-procured medical treatment; 13. vocational rehabillitation benefits/supplemental job displacement benefits.
Most often, parties use a C&R as a final settlement document. Once the settlement document is approved by a workers' compensation judge, the case between the injured worker and the defendant is closed. The case may remain open if there are unpaid medical bills and/or liens.
Injured workers typically choose to settle a case pursuant to a compromise and release to receive a lump sum payment, including a buy-out of future medical costs. It provides injured workers control over their medical treatment and how the money is spent.
Insurance companies often want to settle a case pursuant to a compromise and release because it ensures that case is closed, allowing them to cap potential future liabilities.
Stipulated Findings and AwardA Stipulated Findings and Award is a type of settlement where the parties enter into an agreement over the material facts of the case, agree to weekly indemnity payments, and to whether the injured worker is entitled to future medical treatment. Unlike a Compromise and Release, a Stipulated Findings and Award does not completely resolve a case. Typically, there is an award for future medical treatment for an indefinite time. Also, a Stipulated Findings and Award is not paid out in a lump sum, but the agreed upon disability payments are issued on a weekly, or bi-weekly basis. Finally, an injured worker may petition to re-open a case for new and further disability within five years of the date of injury.
Injured workers often choose to settle by way of a Stipulated Award if they want a lifetime of medical treatment for industrial body parts/medical condition agreed upon in the settlement document.