Most New York workers' comp claims are resolved through settlement. Workers decide to settle their claims for many reasons. For example, a lump sum settlement can help you pay off your mounting bills. Or, it might be worth compromising if there's a significant chance of losing at your workers' comp hearing.
Settlements often close out your workers' comp case for good, though. For this reason, make sure you understand your claim's value and what rights you are giving up. It's also a good idea to consult with a lawyer before signing any settlement agreement.
In New York, there are two types of settlements: stipulation agreements and Section 32 settlements.
Sometimes, you and the insurance company will agree on the degree of your disability and how much you're entitled to in workers' comp benefits. In this case, you and the insurance company would sign a stipulation agreement, confirming the amount you will receive for your scheduled loss. Benefits are usually paid on a weekly basis.
For example, suppose your injury results in the amputation of your leg. If it's pretty clear that the amputation is work-related, the insurance company might agree that you are eligible for scheduled loss benefits. Because the amount of these benefits is clearly laid out in the workers' compensation law, there won't be a dispute about how much you are owed.
A Section 32 settlement is an agreement to close out your workers' compensation case in exchange for a sum of money. Most Schedule 32 settlements are paid in a lump sum. However, in a small number of cases, workers receive periodic payments over time instead (for example, every week, month, or year). Because insurance companies would rather end their obligations with one payment, they typically only offer installment payments when a claim involves catastrophic injuries that result in permanent and total disability.
In most cases, a Section 32 settlement is a full and final settlement of your workers' comp claim. This means you are giving up all rights to your workers' compensation claim, including the right to have your future medical bills covered. In rare situations, the insurance company might agree to pay for certain benefits, such as future medical treatment, as part of a Section 32 settlement.
A stipulation agreement can always be modified if your circumstances change. For example, if your medical condition worsens and you become eligible for additional benefits, you can seek the Board's approval to modify your stipulation.
A Section 32 agreement, on the other hand, is much more final. You only have ten days after your settlement hearing to cancel a Section 32 settlement. (And you must do so in writing.) After that, a Section 32 settlement is final. In other words, you cannot reopen your claim or demand additional benefit payments—even if your condition worsens or you discover a previously unknown injury.
Both types of workers' comp settlements require a judge's approval. For a stipulation agreement, you must present your settlement to the New York Workers' Compensation Board by either submitting a written stipulation (Form C-300.5) or testifying to the terms of your agreement before the judge.
Finalizing a Section 32 settlement is more complicated. Typically, you must file a written settlement agreement and waiver agreement (Form C-32) with the Board. The Board will briefly review your settlement; if it seems acceptable, the Board will schedule a settlement hearing.
At the settlement hearing, the judge will review your settlement in more detail. The judge will approve your settlement if:
If you have a lawyer, the judge will usually approve your settlement without intense scrutiny. However, if you don't have a lawyer, expect more detailed questioning.
Because the judge's decision is final, you should seriously consider hiring a New York workers' compensation attorney before attending a settlement hearing. A lawyer can evaluate a settlement offer from the insurance company, explain its terms to you, and guide you through the finalization process. (See our article on New York attorneys' fees to learn how much this might cost.)
Settlement values vary dramatically, depending on the severity of your injuries, your pre-injury wages, and other factors. Conflicting evidence can also impact the strength of your claim and its settlement value. If you need help assessing your claim's value, contact an experienced workers' comp lawyer.
Once you and the insurance company agree on an amount, certain expenses might be deduced from your settlement, including attorneys' fees, legal costs, and a sum of money to cover future medical expenses if you are eligible for Medicare. (To learn more, see our article on deductions from workers' comp settlements and awards.)
In New York, you can settle your workers' comp claim at any time. However, most workers don't settle until they have reached maximum medical improvement—when you are fully healed and your doctors do not expect further improvement. Before this point, it's difficult to know how severe your injury is and how much it will impact your ability to earn a living.
It's always a good idea to hire an experienced workers' comp lawyer to review any settlement agreement you're considering signing. A lawyer can also help to value your claim properly and navigate you through the often confusing workers' comp process.