Lump Sum Settlement in a Workers Compensation Case –
What does it mean to take a lump sum settlement in a workers compensation case? Well, the answer will vary depending on the circumstances of the claimant. However, in overall, it means that the entire case is closed with the workers compensation insurance company in exchange for cash Unlike closing a case via stipulation and award or judgment and award, where permanent disability payment is paid and medical treatment provided in accordance with the terms of the final medical report, a cash payment ends things forever, and is known as a compromise and release (C&R).
Voluntary Resignation and Lump Sum C& Settlements Explained
Generally, a C&R is only available when an employee no longer works for the company that caused the industrial injury. This means that the employee is already terminated, laid off, or will submit to voluntary resignation. There is a reason for this. The reason is that continued employment will lead to the potential for the filing of another claim of injury to the same body parts in the present claim as part of a future claim.
Since workers comp is a no-fault system, the potential for future liability to the same employer and insurance carrier is possible unless employment ends. The point of a C&R is to remove the liability of a particular employee from the books permanently. Since future allegation of injury would be possible if the employment relationship continues, a compromise and release, in general, is only had where the employment relationship ends forever. So what does taking a workers compensation lump sum payment mean? Let’s talk about it:
What A Lump Sum Settlement In Workers Compensation Means
A lump sum settlement in workers’ compensation means that an injured worker agrees to accept a one-time cash payment instead of ongoing benefits for their work-related injury. By accepting this payment, the worker typically gives up their rights to future compensation under the law.
How does a lump sum settlement differ from personal injury law?
Different negotiation process
The negotiation process for a lump sum settlement in workers’ compensation is different from personal injury law. In personal injury cases, a judgment often results in an award of a lump sum of money. However, in workers’ compensation cases, a judgment typically leads to a determination of the employee’s entitlement to specific permanent disability payments and medical benefits, rather than a lump cash payment.
Example of a personal injury negotiation
For example, in a personal injury case, a person might sue a negligent driver after a car accident and receive a lump sum payment for their injuries. The amount awarded is usually based on factors like medical expenses, lost wages, and pain and suffering.
How does the negotiation work in workers’ compensation?
Disparity in bargaining power
In workers’ compensation cases, the negotiation is often based more on what the insurance carrier is willing to pay to close the case rather than what the case is worth in dollars to the employee. This can create a disparity in bargaining power, giving the adjuster an advantage at the negotiating table because going to trial will not necessarily result in a higher cash value.
Example of a workers’ compensation negotiation
For instance, an injured worker might negotiate a lump sum settlement with the insurance carrier. The carrier may offer a lower amount than the worker believes their case is worth because they know that a trial will not result in a lump sum cash award. The worker may have to decide whether to accept the lower offer or risk going to trial and potentially receive only disability payments and medical benefits.
Trial Presents the risk of a hollow victory
A trial in a workers’ compensation case can sometimes result in a hollow victory for the applicant. This means that even if the injured worker wins their case, they may only receive disability payments and medical benefits, rather than a lump sum cash payment. This outcome may not provide the financial relief the worker was hoping for and can make the negotiation process more challenging.
In conclusion, a lump sum settlement in workers’ compensation means that the injured worker agrees to accept a one-time cash payment in exchange for giving up their rights to future benefits. The negotiation process is different from personal injury law and may result in a disparity in bargaining power, with the insurance carrier holding an advantage. Injured workers should be aware of these differences and consider their options carefully before agreeing to a lump sum settlement.
What You Should Do With Your Insurance Claim
If you are wondering what you should do, do not rely on the advice of friends or coworkers. Instead, seek counsel with an experienced California workers compensation lawyer who can guide you through the decision-making process. Once you know your options, consult with close family or friends based upon the reality of your lawsuit instead of on hopes and dreams or what happened in someone else’s case.
Here at our workmans comp law attorney office, we counsel our clients on the best course of action in addition to providing strong advocacy in the litigation process. This makes it possible for them to intelligently weight their options so that they can accurately choose the best settlement option. If you are facing a sum of money for your rights, always make sure to speak to a knowledgeable lawyer about what your options are before accepting. Otherwise, you might be shortchanging yourself!
Call California injury lawyer, right now! He will provide you with a free initial consultation. Just call him at 844-584-8444 or submit the form found at calinjurylawyer.com to request that he call you! It is that simple. Speak to a lawyer right now, one on one.