Settlement of the workers’ compensation case

Achieving a favorable or desired outcome for the client, is the ultimate goal of our office. This overwhelmingly takes place by settlement. Unfortunately, the issues and potential claims that have to be dealt with have been complicated in recent years by various entities and new laws. The process of settlement in Missouri and Kansas is quite different.

In Missouri, it is done through a written signed Stipulation for Compromise Settlement, signed by the claimant (who also initials one of two boxes indicating whether they showed up in person at the Division or not), attorney(s), and Administrative Law Judge. A Missouri settlement must be approved by an administrative law judge and said judge shall not approve "any settlement which is not in accordance with the rights of the parties."

Compromise settlement must be in "the best interests of the parties", "and in addition to the requirements of section 287.390, RSMo, shall be accompanied by - (A) A statement or stipulation agreed to by the parties which would contain the facts upon which they are in agreement; (B) The claims, facts or findings, or both, which are in dispute between the parties; ( C) The latest medical reports in the possession of the parties bearing on the case; (D) A written statement showing whether or not the employee has returned to work and, if so, when; (E) A separate statement signed by the employee, or dependents in death cases, in which the employee would state under oath that he/she understands that by agreeing to the settlement that s/he is forever closing out this present claim under the Missouri Workers' Compensation Law; that s/he will receive no further compensation or medical aid by reason of this accident (unless it is agreed that future medical treatment shall remain open); that s/he understands that s/he has a right to prosecute his/her claim before the commission to a final determination; and that the award of the commission might allow him/her to more or less money than is provided by the proposed settlement and that s/he requests the commission to approve the settlement.

One specific issue of note in a Missouri settlement is a situation where the claimant has scarring on the face, neck, hand or arm as a result of the work injury or the resulting surgery. In this scenario, the law requires that the Administrative Law Judge examine the claimant and personally assess the weeks to be paid for the scarring. The maximum allowable is 40 weeks. No legal fee is allowed out of these proceeds. Section 287.140.8 is also noteworthy in that it allows a claim to be reactivated after settlement for "good cause" in cases involving the need for prosthetic devices or "medical procedures involving life-threatening surgical procedures." The standard stipulation contains language that the employee is forever closing out their claim under the Missouri Workers' Compensation Law except as provided by this section.

In Kansas, the settlement process takes place at a settlement conference in which the claimant is required to be present at the Division of Workers' Compensation, and is sworn and asked various questions by the Division while a court reporter records the event. Typically, the judge will ask the claimant about the nature of their accident and injuries, the treatment received, whether they have returned to work, whether he/she was satisfied with the legal representation, and essentially makes sure they understand their rights and realize what they are giving up by accepting the settlement. Typically, the attorney representing the employer/insurer comes with the settlement check in hand and there is an acceptance of it by the claimant. The insurance defense attorney also comes prepared with a written statement of the terms of the settlement which they read into the record and present to claimant's counsel before the conference. However, there is nothing signed by the claimant nor the claimant's attorney.

The Missouri Stipulation for Compromise Settlement

In Missouri, there is always a settlement agreement to fill out and sign. This is known as the Stipulation For Compromise Settlement. Many times, errors are committed in doing this, if one is not careful. Typically, the Division will insist on one stipulation for each case, as opposed to lumping them all on one stipulation. There are many errors committed even on stipulations that the Division approves. The following are some things to keep in mind:

  1. Make sure you have indicated that the claim against the Second Injury Fund has been left open, if that is what you intend.
  2. Make sure the claimant has initialed the correct box indicating they either showed up at the Division or did not.
  3. If the injury involves an extremity injury, make sure you properly indicate whether it was the left arm or leg, and make sure you have the correct side of the body.
  4. Make sure the Injury Number is the correct one, especially in a situation where you represent the party on multiple cases, which is common.
  5. Make sure the figures for comp. rates, amount of medical paid, and amount of TTD paid are correct (at least to the extent you can verify these).
  6. Make sure the body parts listed correspond with what you have a disability rating on.
  7. Make sure to attach addendums where applicable (especially in social security disability situation). This can be a situation where an injured worker needs the service of a workers' compensation attorney.

Social Security Disability Offset

In the event the claimant/injured worker is receiving social security disability or may soon receive it in the future, it is crucial to make sure the settlement agreement language is done in such a way as to avoid the so-called social security offset problem. SSDI benefits are paid out monthly for the remainder of the life of the person. The total amount of Social Security Disability benefits plus the monthly workers' compensation benefits cannot exceed 80% of the claimant's average earnings before disability (any excess is deducted from the SSD benefit). The settlement needs to be broken down in the settlement documents to show what the monthly benefit would be if paid on a monthly basis over the expected lifetime of the claimant. This essentially is done by referencing the future life expectancy of the claimant, and the amount they are to receive per month if the lump sum settlement was paid over the remainder of their life after deduction of fee and expenses.

If this is not done and not done correctly, the injured worker may end up not receiving social security for a significant amount of time, and thus lose money that they are entitled to under the law. This is a crucially important area and one where our office can help you.