When litigation comes around, the first thought may be to try and settle the claim as soon as possible. After all, for every day that goes by with a claim in litigation, wages owed accrue and legal costs add up. Depending on the claim, if it is higher exposure with a higher wage earner, it is worthwhile to try and defend the claim should it be deemed not work related or if there is another dispute. On the other end of the spectrum, if the claim is of smaller exposure then it is probably better to wrap it up before the costs to defend the claim outweigh the costs to dispute and the file. It may also be the other way around, which proves that there is no blueprint to handling a litigated claim.
Below we discuss a few factors on why to not settle a claim.
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The claim was denied from the very beginning
The worker is no longer an employee of the company
The claimant has unrealistic demands for settlement
Sometimes the injured worker feels a sense of entitlement and turns to their employer as the responsible party. If you were able to deny or suspend a claim, that means there should be enough evidence to defend it. Even when trying to be realistic with a fair settlement offer, this may not be what the injured worker is looking for in the long run. If this person is offered $10,000 and the counter demand is $100,000, then consider that a significant gap in negotiations. It is doubtful that this will resolve itself on its own, so it is best to involve litigation and let the Judge figure out what is fair. Rarely, if ever, should an unjustified settlement go forward. In extreme cases like this, even plaintiff attorneys’ can do little to talk reason into the claimant. Let the Judge help in the defense of the claim.
The case has little to no value due to wage coordination through Pension or Social Security payments or near-future payments.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
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