This is one of the most common questions that we get from clients. To be frank, it is a very fair question. You have just been injured at work and, in many circumstances, your life has been turned upside down and perhaps changed forever. You certainly have every right to know how you will be compensated for your losses. However, the answer to this question is a complicated one. In many states, settlements are determined by a permanency rating and you simply look at a chart and it is fairly simple to determine a case value. However, Pennsylvania is a lost wage system. Case value is determined by a number of factors.
Being very transparent, what your case ultimately settles for may largely be driven by who your attorney is. The workers’ compensation Bar is not a huge group of lawyers. It is relatively small and reputations are well-known. The lawyers representing employers and workers’ compensation insurance carriers know if the injured worker’s attorney will settle for less than what the case is worth. Those lawyers know if the injured worker’s attorney is willing to spend money and go the distance to the Judge’s Decision. They know who will compete and who will cave. They know who will hold out for top dollar and who will settle just to move on to the next file. This is a stark reality. Therefore, the path to getting a fair settlement in your case truly starts with hiring the right lawyer. At Stern & Cohen, we have years of experience of achieving high-value settlements. We will decline settlement offers over and over again until we get the right number. We know all the strategies and tools to maximize a case value. We are willing to spend whatever it takes to properly litigate a case and position it to potentially resolve for the highest number possible. Along the same lines, we recognize that not every case will settle right away. With our competitive spirit, we will fervently litigate a case to a Judge’s Decision if we believe the client’s best interests would be served in doing so.
So, once you have the right lawyer, what goes into determining what a case is worth? There are a number of answers to this, but we will focus on the most significant. The nature of the injury is clearly very important. Obviously, a shoulder sprain and a torn rotator cuff in the shoulder are two different types of injuries with different recovery times. However, the type of injury must also be taken in context with the line of work. Identical injuries to a receptionist and a union bricklayer will also result in differing case values. The same could be said for age. A 24-year-old and a 58-year-old with similar injuries are going to have different case values (this is simple science – generally speaking, the younger you are, the faster you recover). Ultimately, the question is how much lost wages is the type of injury going to cause. The longer the period of time that someone will be receiving workers’ compensation lost wages, the more the case is worth. Hence, viewing the above examples, the more significant the medical diagnosis, the more impactful the injury is on one’s job/trade, and the ability to return to the workforce relative to someone’s age/place in life, will all impact one’s future wage loss. In summary, based on the nature of the injury, the longer the insurance company may be exposed to paying your lost wages, the more they are going to be willing to pay to settle.
Average weekly wage is a very important factor in determining what your case is worth. How much you made at work is a critical factor in what your case is worth. If you made $900 per week, then your workers’ compensation pay rate is $600 (remember, workers’ compensation is tax-free – as are settlements). So, for every year for someone earning $600 weekly in workers’ compensation checks, the insurance company is paying $31,200 ($600 * 52 weeks). However, if the rate is $300, then the company is paying $15,600 yearly. So, one can see the cost difference to the insurance company. The analysis then becomes – for how long will workers’ compensation have to pay these weekly benefits. A workers’ compensation lawyer with a good reputation and a lot of experience will be able to do that measurement. This is not a calculation of how many workers’ compensation checks you will receive until you would have otherwise retired. Instead, it is based on how long the insurance company will pay you – and understanding this requires knowing all the different ways the insurance company could possibly stop payment. Using your wages/benefit rate to understand what the insurance company may face in the future goes a long way toward determining a fair settlement. Your lawyer must be adept and aggressive with this calculus.
Medical bills are another relevant item for determining how much your case is worth. Medical treatment can be costly. Surgery, pharmacy bills, extended physical therapy needs – all of these bills can add up over time. Therefore, in determining what the insurance company may have to pay moving forward in your case, your attorney should have a strong understanding of the potential cost of these services. At Stern & Cohen, with many years of experience, we have full knowledge of how much the insurance company will be avoiding in medical bills by settling your case. It is very important to factor this into the value of the case. Some attorneys that represent injured workers let the insurance company off the hook for the future cost of medical bills when determining a fair settlement for their clients.
Clearly, the nature of the injury, the compensation rate, and medical bills are the biggest factors in determining how much your workers’ compensation case is worth. However, there are a handful of other smaller items that can help the value of your case. Understanding the employer, insurance company, defense counsel is critical in providing an injured worker advice on what the case may be worth. If the case is in litigation, knowing the Judge’s tendencies is essential in being able to determine the case worth. Some Judges place great value in a worker’s length of employment, others look favorably upon a worker’s attempt to try and work following an injury, while others pay very close attention to the qualifications of the parties’ medical experts. Judges are human beings and all view certain variables in a case differently. It takes trying thousands of cases in Court to really get to know these honorable women and men that sit on the Bench. This type of experience is invaluable in determining what your case is worth. The lawyers at Stern & Cohen have gone to Court on thousands of cases and possess this important knowledge.
Any meaningful discussion concerning what your case is worth absolutely MUST include a risk/reward analysis. At Stern & Cohen, we engage in this conversation with our clients every time we review a potential settlement. There is no way a client can make an informed decision about whether to settle their case without understanding the risks/rewards of accepting an offer versus the risks/rewards of declining it. If your lawyer is not laying this out for you in some fashion, then you are not being fully informed. Rewards of accepting a settlement include moving on with life, the financial benefit of a lump sum and avoiding the complexities and pitfalls of litigation. Risks include taking the insurance company off the hook for lost wages and medical expenses. Often an injured worker will be left with a “now what?” moment and that can be risky for some. On the flip side, rewards of declining an offer usually include an anticipated higher counteroffer in the future. However, a risk of declining an offer is, of course, no additional offers and the risks that come with litigation. This should be an in-depth conversation and a two-way street. You should have all your questions and concerns addressed.
Finally, at Stern & Cohen, we understand that no two people are the same. Two injured workers with comparable workers’ compensation cases may make entirely different decisions for a host of reasons. Maybe there is a child in college and a financial decision must be made on that basis. Perhaps there is another career opportunity or schooling that someone wants to pursue and they need the immediate economic means to do so. There could be a financial advantage in accepting a settlement that may be slightly less than what we were hoping for if it results in an increase of your Social Security Disability benefits or perhaps allows you to take a fully vested pension. A good workers’ compensation lawyer cannot look at the case in a vacuum. Every client is different and understanding all the nuances of their life situation is of the utmost importance. We have this conversation with our clients often.