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.
How long can I receive workers’ comp benefits in Arizona?
In Arizona, workers who are unable to return to work for more than 7 calendar days due to an on-the-job injury or illness may be eligible for temporary total disability (TTD) benefits, which cover two-thirds of a worker’s average monthly wage.
Unlike some states, Arizona doesn’t set a limit on the duration of TTD benefits. A worker can continue to receive these benefits until their physician determines they can return to work. Those with permanent injuries, like a severe spinal cord injury, could be eligible for benefits for lost wages and medical care for life.
How long does it take to get a workers’ comp settlement check?
After you file your workers’ compensation claim in Arizona, it’s processed through the Industrial Commission of Arizona (ICA). This agency will notify your employer’s workers’ comp insurance company, which will either approve or deny your claim within 21 days.
Following approval of your claim, you should receive a check within 3 to 5 days in most cases.
If you ultimately decide to accept a full and final settlement, payments should be issued within 15 days of the award being approved and finalized.
What is a “full and final” settlement in Arizona, and how does it affect my workers’ comp claim?
Arizona Senate Bill 1332, which went into effect in 2017, allows for a “full and final” settlement of workers’ compensation claims. According to Arizona law, the payment amount must include an estimate of future medical expenses and maintenance costs. The carrier must also estimate future indemnity benefits based on the claimant’s age and life expectancy.
If you opt for a full and final settlement, you’ll get your money upfront, but you’ll give up your right to reopen your claim at a later date. This means that if you later discover that your medical care is going to be more expensive than you originally realized, you won’t be able to request more compensation.
Because the stakes are so high, it’s wise to consult an experienced work injury attorney before accepting a full and final settlement offer.
What should I consider before accepting a workers’ comp settlement?
How will you know if a settlement offer is fair? There are many factors to consider, but these are some tips that can help guide your decision:
- Understand the full extent of your injuries. Make sure you have a clear picture of your current medical condition, future medical needs, and how your injuries may affect your ability to work in the long term.
- Review the settlement offer carefully. Analyze the details of the settlement offer, including how it addresses medical expenses, ongoing care, lost wages and other relevant issues. Make sure you know whether the settlement covers all of your current and future medical expenses related to the injury.
- Consider future medical needs. If your injury requires ongoing medical care, make sure that the settlement takes into account future medical expenses. Remember that if you agree to a full and final settlement, you won’t be able to request additional funds later for unforeseen medical needs related to the injury.
- Evaluate the impact on other benefits. Understand how the settlement might affect other benefits you may be receiving, such as Social Security Disability Insurance or Medicare. A settlement often has implications for these and other government benefits.
- Consider vocational rehabilitation. If your injury affects your ability to return to your previous job, consider whether the settlement includes provisions for vocational rehabilitation or training to help you transition to a new career.
- Assess the long-term financial impact. Consider how the settlement will affect your long-term financial stability. Will it provide enough support if you cannot return to work or if you face reduced earning capacity? Consider consulting with a financial planner to understand the long-term financial implications.
In sum, accepting a workers’ compensation settlement requires careful consideration of your medical, financial, and legal circumstances. Professional guidance from both lawyers and medical experts is invaluable in helping you make the best decision for your unique situation.
What is the highest-paid workers’ comp settlement?
In 2022, California ironworker Rafael Pineda received a $13.2 million settlement after suffering a serious accident while traveling to work, in which he sustained spinal cord and brain injuries that rendered him disabled for life.
Pineda’s workers’ compensation claim was initially denied by his company’s insurer because of a rule known as the “coming and going rule,” which excludes injuries while commuting to and from work from workers’ compensation coverage.
He was later offered $10,000 to settle but instead decided to proceed to trial. At trial, the insurer was eventually ordered to pay $13.2 million in compensation.
While a settlement like this is rare, it does show that in some situations, it’s better to go to trial than blindly accept what the insurance company is offering.
How long does it take to negotiate a workers’ comp settlement?
The settlement process for a workers’ compensation claim, from filing to receiving the money, generally takes between 12 and 18 months, depending on the specifics of the case and whether or not legal representation is involved.
For those without a lawyer or a permanent disability who choose not to negotiate a settlement, the process can take as little as 12 months. If you have a lawyer who negotiates your settlement, the process can take up to 18 months (and, in rare cases, more), but the tradeoff is that you’ll likely end up with a much higher settlement.
What happens if my workers’ comp case goes to trial?
The ICA has several statewide locations where hearings are held. An Administrative Law Judge (ALJ) oversees these hearings much like a judge would in a regular courtroom. During your hearing, you or your attorney will have the opportunity to present evidence and call witnesses.
A workers’ comp hearing could last anywhere from 30 minutes to several hours. Most cases are decided after a single hearing, but there are times when multiple sessions are needed. In those cases, you’ll be required to attend each session.
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.