Pros and cons of settling or fighting your workers’ comp case in court
In Arizona, the purpose of workers’ compensation is to provide injured and sick workers with financial support while they recover from a work-related injury or occupational illness and aren’t able to work. After filing a claim, you may reach a point at which you need to decide whether you should accept a settlement offer or fight for your claim by bringing it before a hearing with the Industrial Commission of Arizona (ICA).
First off, you should know that there are advantages and disadvantages to both options, which we’ll explore in detail below.
It’s common for workers’ compensation disputes to take quite some time—months and possibly years to reach a resolution. Given this long timeline, it’s understandable when folks feel anxious and compelled to accept a settlement when it’s offered, even if the amount is lower than they think they deserve. In the event that you have already returned to work or reached the cap on your benefits, you may be even more compelled to accept a settlement.
But is settling right now really in your best interest?
Pros of accepting a settlement offer
There are a few advantages to accepting a settlement offer.
1. Faster resolution and compensation
One of the biggest advantages of settlements is that a claim is resolved faster. Rather than waiting for your hearing or appeal, you can instead accept a settlement offer that puts money in your pocket sooner—money you might desperately need to pay bills and make ends meet. A settlement also allows you to eliminate the risk associated with going to a hearing or a trial, where you might potentially lose your case.
2. More control over how you spend your settlement proceeds
After accepting a settlement, you will have complete control over what you choose to do with the proceeds of your settlement award. For instance, you could choose to invest your award or you might opt to launch your own small business. Another option would be to return to school and further your education or invest in the education of your children.
In general, settlements allow you more freedom and flexibility in how you choose to spend the money; whereas awards from a hearing may have stipulations and limits on how the funds can be used.
3. Settlement proceeds can continue after your death
In the event of your death, any monthly payments you have received up to that point will come to an end. With a settlement, however, your estate will be able to retain the proceeds of your settlement.
Cons of accepting a settlement
There are also some cons to accepting a workers’ comp settlement.
1. You give up future legal rights
One of the most important things to keep in mind is that when you accept a workers’ compensation settlement check, it comes at a cost. In this case, you are typically giving up your rights to pursue any future legal action related to your claim.
In other words, you wouldn’t be able to request any additional benefits for your injury down the road, even if you later discover that your injury was worse than you originally thought.
2. Negotiating a settlement can take time
Agreeing on a settlement could take some time on its own. In fact, you and your attorney may need to go through several rounds of negotiation and mediation, perhaps because the first offer made by an insurance company is typically quite low.
Remember, the goal of the insurance company is to get by with the smallest offer possible. The insurance company is hoping that you will be so anxious to get things over with quickly that you will be willing to accept a smaller offer.
3. You may use up the settlement proceeds faster than you think
Accepting a lump sum payment may seem attractive at first, but you also run the risk of not having enough money to cover future medical expenses. Consider whether you will be able to cover the full cost of your medical care with the proceeds from your settlement offer.
What would happen if your medical situation worsens in the future?
If you are considering accepting a settlement offer, consider speaking to your attorney about a structured settlement, rather than a lump sum.
You should also note that permanent workers’ compensation awards don’t allow for cost of living increases. Consequently, over time, the value of your monthly payments would actually decrease as a result of inflation.
Settle or fight: which is best for you?
The question of whether or not you should accept an offer depends on each individual case. Nobody can honestly and ethically tell you what’s right for you until they know more about your case. When considering this offer, consult with your attorney and take a variety of factors into consideration.
Among those factors is the average workers’ compensation settlement. For instance, you will need to be sure that the deal offered to you is fair when compared to what similar cases have settled for. An experienced attorney can provide you with invaluable insight into whether or not this is true in your case.
Keep in mind that you will be in the best position to receive a fair settlement offer or successfully handle your case at the trial level if you have skilled representation. Unfortunately, some people try to handle their workers’ compensation cases on their own. This often leads to a complete denial of the claim since insurers see that the injured worker isn’t receiving legal counsel.
Ultimately, your attorney will be able to provide you with professional legal advice regarding whether you are making the right decision by accepting a settlement offer or whether you should continue to fight. Consulting with an attorney is the best way to protect your rights.
