5 Important Factors in the Settlement of Your Workers’ Compensation Case

March 27, 2023
David F. Stern
Settlementt with gavel - Stern & Cohen Workers Comp Lawyers
When the appropriate time has come to settle your case, the credibility of your workers’ compensation lawyer is very important. Your best interests must be the sole focus of your lawyer. If they are thinking about their own financial needs, you will be led down the wrong path. If they fear risk for selfish reasons, your case will be settled short. This does not mean your lawyer should be oblivious of risk, but they should never allow it to paralyze them. Fear of losing out-of-pocket case costs invested in your file (when the odds of an unfavorable outcome are low), can make for bad decision making on your behalf.
Having settled thousands of cases on behalf of injured clients, the lawyers at Stern & Cohen know precisely how to navigate a potential settlement of your case. One comment that we often hear from clients is something along the lines of: “but my friend down the street got X dollars and his injury was only…”  First, usually said friend has embellished his or her settlement. Second, and the focus of this blog, many factors go into a settlement and no two cases are the same. The following are five items that play a huge role in what your settlement will be:

1. Your Workers’ Compensation Benefit Rate

Pennsylvania workers’ compensation cases are “wage loss cases.” You cannot get pain and suffering, nor punitive damages. Your cash recovery is limited to the recovery of your lost earnings. Those earnings are determined by your workers’ compensation rate. If your workers’ compensation benefits are $600 per week, that means the insurance company will pay you $31,200 per year ($600 * 52 weeks).  That number is very important and will largely determine what the insurance company will be willing to pay to settle your individual case. For example, if the insurance company perceives a risk of paying benefits for three years, they will likely be willing to settle for $90,000 – $100,000. Of course, if everything else is equal, and your workers’ compensation rate is $1200 per week, the same case might yield a settlement of $180,000 – $200,000 (as this is 3 years at $1200).

2. Is Your Case in Litigation?  Know Your Risks!

Although risk does not have to garner fear, it is clearly worthy of consideration.  If your case is in court, and there is any risk of potentially losing your benefits, this might be a reason to consider slightly less in your settlement than perhaps your original expectations. Of course, if your case is not in court, you may wish to be a little bolder. It is always good to know if litigation may be lurking around the corner too. An experienced workers’ compensation lawyer, like the team at Stern & Cohen, can guide you on this and help you understand what litigation means for your settlement expectations.

3. The Judge

This factor would seem obvious, but truly requires a good deal of knowledge on your lawyer’s part. Has your attorney tried cases all the way to a decision with your judge? Do they know His or Her tendencies? If not, how are you getting sound advice on your chances of winning versus losing? Knowing what your judge might do is critical in helping you make an informed decision about a resolution of your case. If your chances of winning with your judge are high, bend less in negotiations. If your chances of losing with your judge are higher than with others, be ready to have more flexibility in your negotiations. Your attorney must be well-versed in your judge’s tendencies and philosophies.

4. The Truth About Your Earning Capacity

As workers’ compensation cases are wage loss cases, understanding your future earning capacity is very important for helping you to decide whether to settle and for how much.  First, if you are confident that you can eventually move on from your injuries and secure new employment, be mindful of this when considering what you might be willing to accept.  If you feel that you may be able to work again within a year and you are getting an offer of four years’ of pay to settle, this may be a very good result for you.  However, if your prospects of ever becoming employed again are dim, then the same offer may not be wise for you.  This conversation with your lawyer is “privileged” and will never be shared.  It is good to have that honest discussion to level expectations.  Second, it is good to know what the employer/insurance company might have up their sleeves to try and prove a future earning capacity.  Is your employer the type of place that may be able to offer you a very easy, light duty job to try and get your benefits stopped?  Having a complete understanding of how the employer may be able to prove your earning capacity (or their inability to prove this) is invaluable.  This is clearly an item that warrants consideration in determining a settlement.

5. What Are Your Goals?

This is an important one.  This is when your lawyer needs to be able to take off his or her “attorney hat” and speak with you on a different level.  We often say to our clients:  “What do you want to do from here?”  Sometimes we have a client that tells us they want to open their own business.  We have had clients tell us about their financial needs for a child attending college.  It is incredibly meaningful to understand these items.  Your lawyer can tell you what your case is worth and try and approximate how long it will take to get it settled near that figure, but if you have other timelines that need to be met, that is important.  Maybe you have to take less to settle your case to make a tuition payment in a timely fashion.  This can often lead to the most rewarding discussions.  A peek into your life can lead to a solid bond with your attorney and help them understand what your motivation is.  Holding out for a little more money and losing out on a great employment opportunity could prove to be a misstep.  These global discussions of your whole life picture play an important role in your settlement.

Obviously, there are many items that warrant consideration in the settlement of your case.  This is just a look at five important factors in our view.  If settling your workers’ compensation case is something that you want to review, call us at Stern & Cohen.  The consultation is always free.