The Employee Should Always Hire an Experienced Workers Compensation Attorney Before a Settlement in Louisiana Workers Compensation
An injured employee should always hire an experienced Louisiana workers compensation attorney to handle his or her settlement.
Not only will the attorney be able to obtain much more money for the employee even after a 20% attorney's fee, but the attorney will handle everything and provide the employee with peace of mind that everything was handled properly in order to maximize the employee's settlement amount.
If an injured employee attempts to settle his or her claim without an attorney, the adjuster for the workers compensation insurance company insurance will almost always undervalue the claim and take advantage of the employee by selling him or her short with an inadequate settlement amount.
An experienced Louisiana workers compensation attorney can maximize the amount that the injured worker will receive in settlement through a number of ways, including:
- Timing the settlement properly;
- Determining the true value of a claim;
- Using skillful negotiation tactics;
- Properly handling a mediation;
- Avoiding common settlement pitfalls;
- Maximizing recovery from Social Security;
- Maximizing recovery from Medicare; and
- Maximizing recovery in third-party claims
An Experienced Attorney Knows How to Time a Settlement for Maximum Recovery in Louisiana Workers Compensation
Timing a workers compensation settlement is extremely important in order to maximize the employee's settlement amount, and really the only way that an injured employee can properly time a settlement is to retain an experienced Louisiana workers compensation attorney to handle his or her settlement.
From the perspective of an injured employee, it is important to understand that the value of a workers compensation claim continues to steadily decline unless additional surgeries are required.
In fact, from the point of view of the employee, there is a real incentive to settle at the "optimum" value (or rather as soon as the employee has sufficiently recovered from surgery but not yet returned back to work) in order to maximize the employee's recovery, due to the serious negative effects that vocational rehabilitation can have on the value of a claim.
Nonetheless, it is usually in the best interest of an injured employee to have any recommended surgeries before consideration of settlement, since:
- It can be difficult to accurately estimate the potential cost of surgery, due to ever-shifting costs of medical facilities, providers, and/or surgical supplies;
- It can be difficult to accurately estimate any pharmacy charges necessary for pre-surgery and post-surgery discharge needs; and
- It can be difficult to accurately estimate any unforeseen developments and consequences related to the surgery.
Also, the employee's attorney should always present an initial settlement demand to the workers compensation insurance company before the workers compensation insurance company initiates settlement talks, in order to prevent the insurance company from setting the parameters for settlement negotiations.
Once the workers compensation insurance company determines how much an injured employee's claim is worth - and sets insurance "reserves" in that amount - it can be extremely difficult to get the insurance company to change that figure.
And, waiting too long to settle a claim can be a big problem for the employee, because if the employee fully (or mostly) recovers or finds another job, then the workers compensation insurance company can claim that little or no settlement is required.
But settling too early usually means that the injured employee is selling himself or herself short because likely the full extent of the employee's injuries and disabilities have yet to be demonstrated to the workers compensation insurance company.
But an experienced attorney can present a well-timed settlement offer - along with the proper medical evidence and legal claim analysis - in order to recover a maximum settlement for an injured employee.
An Experienced Attorney Can Properly Evaluate a Claim to Determine Its True Settlement Value in Louisiana Workers Compensation
One of the most important things an experienced Louisiana workers compensation attorney can do for an injured employee is to provide a thorough and accurate evaluation of the employee's workers compensation claim.
In other words, before settlement negotiations even start (and in order to formulate the best settlement negotiation strategy) the employee's attorney should provide the employee with a specific dollar figure (or range) and inform the employee that this is the value of the employee's workers compensation claim.
The employee's attorney should base this evaluation of the employee's workers compensation claim on the following:
- The employee's current medical condition;
- The employee's future medical treatment options and expenses;
- The employee's future lost wages and ability to return to work;
- The employee's vocational rehabilitation status; and
- Louisiana workers compensation law.
This evaluation of the employee's workers compensation claim can serve as the basis of a settlement demand, but the amount demanded should always be much higher than the actual value of the claim, so as to leave room for negotiation.
An Experienced Attorney Knows How to Negotiate for a Maximum Settlement in Louisiana Workers Compensation
Properly handling the negotiation process is another extremely important service that an experienced Louisiana workers compensation attorney can provide for an injured employee.
Negotiation can be a very tricky process, and really the best way to know how to handle negotiation is through experience and training.
An experienced Louisiana workers compensation attorney will know when and how to initiate the negotiation process, when and how to respond to the counter-offers of the workers compensation insurance company, when and how to "test" the workers compensation insurance company, and when and how to conclude the negotiation process.
And really, an injured employee who tries to handle the negotiation process is almost always leaving a significant amount of money on the table.
An Experienced Attorney Can Maximize Settlement During a Mediation in Louisiana Workers Compensation
A mediation conference in Louisiana workers compensation is an ideal opportunity to obtain a maximum settlement, but usually, that maximum settlement can only be obtained at mediation when the mediation is handled properly by an experienced Louisiana workers compensation attorney.
In Louisiana workers compensation, a mediation is an informal meeting of the injured employee (ideally with the injured employee's attorney) and the attorney for the workers compensation insurance company, with a neutral individual - called a mediator - who attempts to resolve the issues that are in dispute.
The mediator is a neutral party and does not take sides; instead, the mediator's purpose is to settle the disputed issues, or even the entire claim, without the need for further litigation.
Mediation is voluntary by the parties unless otherwise ordered by the workers compensation Judge.
Mediation is an opportunity for an injured employee to settle his or her disputed issues - or even settle the employee's entire claim - within the Office of Workers Compensation (OWC) system at no cost, or at a private mediation, before those disputed issues go to trial.
However, properly handling the mediation process can be tricky, and involves a great deal of preparation (including a confidential position paper) and negotiation, and therefore should be handled by an experienced Louisiana workers compensation attorney to obtain a maximum settlement for the injured employee.
Preparing for a Mediation
The best ways for an injured employee's attorney to prepare for a mediation conference in Louisiana Works compensation are to:
- Make sure the injured employee and the employee's attorney know the proper value of the claim;
- Make sure that the workers compensation insurance company representative understands the employee's position; and
- Make sure that the mediator understands the facts of the claim and the employee's position.
Regarding point #1, information on determining the proper value of a claim can be found here.
Regarding point #2, an employee can make sure that the workers compensation insurance company representative understands the employee's position by having the employee's attorney submit a written settlement demand to the workers compensation insurance company at least several weeks before the mediation.
This settlement demand should include an analysis of all the relevant issues, as well as a specific demand for what the employee is seeking, including a specific monetary figure well above what the employee might actually settle for.
Regarding point #3, an employee can make sure that the mediator understands the facts of the claim and the employee's position by having the employee's attorney submit a confidential position paper to the mediator well in advance of the mediation.
This confidential position paper should include relevant information about the claim, including:
- The employee's age and date of birth;
- The employee's average weekly wage;
- The date of the accident with the number of weeks benefits paid so far;
- A description of the injury with a summary of the employee's medical status;
- A summary of the employee's vocational rehabilitative efforts;
- The employee's medication names and costs;
- The status of any third-party claims or subrogation interests;
- The status of any health insurance or health care provider liens; and
- The status of any SSDI/Medicare concerns.
It is also very important to provide the mediator with an accurate future value of a claim in order for the mediation to be successful.
An Experienced Attorney Can Avoid Common Pitfalls in Reaching a Settlement in Louisiana Workers Compensation
The injured employee (with the advice and assistance of the employee's attorney) must beware of certain pitfalls before agreeing to a settlement, or really even before engaging in settlement negotiations.
A brief list of key settlement pitfalls to avoid includes:
- Whether or not a Medicare Set Aside (MSA) report will be required, the amount of the MSA allocation and whether it will be funded by annuity or by lump sum payment should all be a part of the settlement negotiations. If the injured employee finds out - after agreeing to a settlement - that the employee's net settlement is being greatly reduced by an MSA, and tries to back out prior to signing the settlement paperwork, the workers compensation insurance company can force the employee into the settlement.
- Delays while waiting on approval of a Medicare Set Aside (MSA) by the Center for Medicare and Medicaid Services (CMS) and/or seeking approval of the Second Injury Fund for funding of part or all of a settlement, can also serve as obstacles to a settlement. These expected delays and the manner in which the delays will be handled should be explicitly agreed to between the parties.
- Not placing a time for performance on tasks that may take more than 30 days is important. The injured employee is entitled to an end date or time certain for the performance of the settlement terms, so the opposing attorneys should include in the documents the result they desire and the mechanism for achieving it.
- In cases where there are no disputes, the workers compensation insurance company cannot settle for a discount rate greater than 8%. Louisiana workers compensation law allows the injured employee two years to request the additional compensation and an additional sum that will amount to 1.5 times the amount that should have been paid in the settlement if a lump sum settlement is settled for a discount rate greater than 8%. For instance, if an 8% discount would have amounted to a settlement of $100,000 and the employee was paid only $80,000, the employee would be owed $70,000 — $20,000 to reach the $100,000 mark and $50,000 to get him to 1.5 times the $100,000 (the amount owed at 8%).
- The employer may wish to have a resignation included in the settlement, and if that is not initially conveyed, such a detail may cause problems with the settlement. If appropriate, this should be explicitly agreed to between the parties.
- The employee and the workers compensation insurance company should verify that all authorized non-emergency treatment and all appropriate and related emergency treatment has been paid for and/or will be paid. If any such treatment has been paid, or not been paid, or will not be paid, or will be paid, then the nature and extent of these payments should be explicitly incorporated into the settlement.
- Medicare conditional payment amounts should be determined. Most workers compensation insurance companies have contracts with organizations that can perform a conditional payment search, and this amount should generally be uncovered prior to negotiating settlement. Although any conditional payments would not be owed until settlement, the workers compensation insurance company may want to know in advance what those conditional payments might be. An injured employee's failure to advise as to Medicaid or Medicare entitlement and/or conditional payments can kill a settlement or adversely affect the employee's recovery and expectations.
- Liens and subrogation interests need to be handled as part of the settlement process. Concerning liens and subrogation interests for non-ERISA health care plans, if it is determined that the worker's compensation payor was responsible for payment of medical benefits that have been paid by the health insurer, the obligation of the workers compensation payor for such benefits shall be to reimburse the health insurer one hundred percent of the benefits it paid. If it is determined that the workers compensation payor was responsible for payment of benefits and its denial of responsibility is determined to be arbitrary and capricious, then the health insurer shall also be entitled to recover legal interest on any benefits it paid, calculated from the date such benefits were due.
- The workers compensation insurance company has its own subrogation rights against any third party claim filed by the employee. In many cases, this subrogation right can be an excellent vehicle for a favorable full and final settlement. Through a combination of waiver by the workers compensation insurance company plus the credit received for the amount the employee nets, the parties can often come to a full and final settlement.
- If the injured employee's private health insurance company paid for treatment arguably related to the accident, then this health insurance company has a lien that should be handled prior to executing the settlement documents. If the plan is an ERISA plan, then this health insurance company may have an absolute right to recover the lien upon settlement with no allowance for state law defenses such as 1208 fraud, failure to request authorization, or other statutory defenses. If the plan is an exchange created by the Affordable Care Act, the subrogation rights of this health insurance company are not clearly defined, and care should be taken when settling to insure that any lien is settled with the workers compensation claim.
- Child support liens need to be investigated and settled. Child support should state in writing the amount that they will require from the settlement, and that amount should be included in the settlement documents, and the failure to withhold amounts from child support could amount to enforcement actions against the employer and/or the workers compensation insurance company, especially if a garnishment has been served.
- The employee and the workers compensation insurance company should verify that there are no other outstanding liens. However, if there are other outstanding liens, the nature and extent of these other outstanding liens should be explicitly incorporated into the settlement.
In order to avoid these pitfalls, all the details related to these pitfalls should be addressed and provided to the attorneys for the parties.
While some of these issues can be worked around by including conditional provisions in the language of the settlement (with the default to be continuation of benefits as if no settlement occurred), the more complex the settlement, the more likely something important may get missed.
And if the parties expect a delay in the settlement process, there is no obstacle under Louisiana law to extending the time for the settlement to be completed and the payment made, just as there is no obstacle to setting a shorter time than allowed by Louisiana law.
However, if there is an unforeseen delay and the reason for the delay was within the control of the workers compensation insurance company, then the injured employee may be entitled to penalties and reasonable attorney fees because of that delay.
An Experienced Attorney Knows How to Deal with Social Security Disability in Order to Maximize Settlement Recovery in Louisiana Workers Compensation
Social Security Disability Insurance (SSDI), also known as Social Security Disability (SSD), is insurance through the United States government in case an individual becomes disabled.
Social Security Disability Insurance (SSDI) is available for workers who have paid into the Social Security trust fund through Social Security taxes on their earnings, as well as for certain dependents of disabled workers who have paid into the Social Security trust fund.
A person can qualify for Social Security Disability if he or she becomes disabled under the age of 65 or is a qualified family member of a worker who becomes disabled under age 65.
The Social Security Disability "Offset" and "Reverse-Offset"
Under Louisiana workers compensation law and United States federal Social Security law, an injured worker in Louisiana can receive both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time.
However, when an injured worker in Louisiana is receiving both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time, this injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.
So, when an injured employee is receiving Louisiana workers compensation lost wage benefits, this employee's social security benefits may be reduced - or "offset" - so that the combined benefits do not exceed 80% of the employee's "average current wage" as calculated by the Social Security Administration (SSA).
The simplified version of the method for calculating a Social Security Offset is as follows:
- The Social Security Administration first calculates the injured employee's average current earnings for the period before the employee became disabled;
- The Social Security Administration then calculates the monthly average of the injured employee's average current earnings;
- The Social Security Administration then determines how much the injured employee is receiving each month in workers compensation and Social Security Disability Insurance (SSDI) benefits;
- The Social Security Administration then determines if the combined income exceeds 80% of the average monthly earnings; and
- If the combined benefits do exceed 80% of the employee's average monthly earnings, then the Social Security Administration will reduce the Social Security Disability Insurance (SSDI) benefits by the amount above the 80%.
But, the workers compensation insurance company can request that the Louisiana workers compensation Court reverse this offset - in other words, claim a social security "reverse-offset" - if the OWC Court concludes that the injured worker is entitled to Permanently Total Disability (PTD) benefits.
So, in all cases where benefits are converted to permanent and total disability benefits, the workers compensation insurance company is entitled to a reverse-offset, lowering what would otherwise be the workers compensation indemnity payment.
In other words, a social security "reverse-offset" allows the workers compensation insurance company to reduce its lost wage benefits by the excess amount above the 80% of the employee's "average current wage" instead of allowing the Social Security Administration (SSA) to reduce the Social Security Disability Insurance (SSDI) benefits by that amount.
Settlements and Social Security "Spread" Language
A Social Security Offset can have a tremendous impact on the settlement of a workers compensation claim in Louisiana because receipt of a large lump sum settlement can potentially cause a drastic reduction of an employee's monthly SSDI benefits and might even completely eliminate these monthly SSDI benefits.
Again, this is because an injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.
However, fortunately, specialized "spread" language can be placed into a written settlement agreement that can minimizes or even eliminate the offset altogether.
This "spread" language can minimize or eliminate the Social Security Offset by "spreading" the monthly value of the lump sum settlement over the employee's life span through a formula approved by the Social Security Administration (SSA).
It is this average monthly benefit - the prorated monthly value of the lump sum settlement over the employee's life span - that is then used to calculate any Social Security Offset.
In other words, any potential negative impact of a Social Security Offset can be minimized or eliminated by "spreading" the value of the lump sum settlement over time.
Spread language in a written settlement agreement usually looks something like this:
- "Of the $150,000.00 settlement, $30,000 shall be paid as attorney's fees to the attorney for the employee. The $120,000.00 to be paid to the employe, shall be calculated without commutation of interest, but shall represent the negotiated compromise Agreement that the claimant's life expectancy is 22.45 years forward from this date, pursuant to the Annuity Mortality Table for 1949 Ultimate, as established by O.C.G.A. §24-4-45, Appendix, Title 24, and that the settlement herein reached represents the payment of $110.28 per week to the claimant over the balance of the 969.44-week life expectancy of the claimant into the future."
Again, this "spread" language is used to prevent reduction or elimination of Social Security Disability (SSDI) benefits due to the Social Security Offset rule (which provides social security disability benefits will be reduced so that no combination of workers compensation benefits and social security disability benefits can exceed 80% of pre-injury earnings) by projecting the portion of lump-sum disability settlement proceeds over the worker's remaining life expectancy.
An Experienced Attorney Knows How to Deal with Medicare in Order to Maximize Settlement Recovery in Louisiana Workers Compensation
Once an individual has received 24 months of Social Security Disability Insurance (SSDI) benefits, he or she automatically qualifies for Medicare.
Medicare is a federal program that provides health coverage for certain individuals who are retired or who have become disabled.
In Louisiana workers' compensation, the Medicare Secondary Payer Act (MSPA) prevents cost-shifting from the workers compensation insurance company (who is obligated to pay for medical treatment of the injured worker) to Medicare, which is good public policy since Medicare is funded by taxpayers.
Medicare has the two following significant rights under the Medicare Secondary Payer Act (MSPA):
- To recover “conditional payments” from the primary payer (such as workers compensation insurance company), which means that if medical treatment is paid for by Medicare, but should be paid by the workers compensation insurance company, then Medicare has the right to recover its payments from the workers compensation insurance company; and
- To ensure that the primary payer (such as the workers compensation insurance company) adequately funds the employee's future medical costs in a workers compensation settlement.
So basically, the main point of the Medicare Secondary Payer Act (MSPA) is to “protect Medicare's interest,” which is important because Medicare (and thus the taxpayers) should not have to pay the medical expenses for a work-related injury that are otherwise owed by the workers compensation insurance company.
Medicare Set-Aside Arrangements (MSAs)
Medicare will not allow the injured worker simply to settle his or her workers compensation claim, pocket all the money for the future medical expenses, and then have Medicare pay for all the future medical expenses.
To avoid such a scenario, Medicare requires that the workers compensation insurance company "set-aside" a portion of that settlement money so that it can be used for future medical expenses, thereby preventing Medicare from having to pay for those future medical expenses.
This process of "setting-aside" a portion of that settlement money is known as a "Medicare Set-Aside Arrangement" or an "MSA" for short.
In Louisiana workers compensation, a Medicare Set-Aside Arrangement (MSA) is a financial agreement that allocates a portion of a workers' compensation settlement to pay for future medical services related to the workers compensation injury, illness, or disease.
These funds that are "set-aside" in an MSA must be depleted before Medicare will pay for medical treatment related to the workers compensation injury, illness, or disease.
The Center for Medicare Services (CMS) will only review new MSA proposals when one of the following conditions is met:
- The claimant is a Medicare beneficiary, and the total settlement amount is greater than $25,000.00; or
- The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date, and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00.
The amount of each MSA is determined on a case-by-case basis.
Medicare's Enforcement Rights in Louisiana Workers Compensation
When a proposed MSA amount is submitted to CMS for review and the claimant obtains CMS' approval, the CMS-approved MSA amount must be appropriately exhausted before Medicare will begin to pay for care related to the beneficiary's settlement, judgment, award, or other payment.
Claimants who receive a workers compensation settlement, judgment, or award that include an amount for future medical expenses must consider Medicare's interest concerning future medical treatment.
If Medicare's interests are not considered, CMS has a priority right of recovery against any entity that received any portion of a third-party payment either directly or indirectly—a right to recover, or take back, that payment.
Medicare may also refuse to pay for future medical expenses related to the work-related injury until the entire settlement is exhausted.
An Experienced Attorney Knows How to Deal with Third-Party Claims and Underlying Personal Injury Claims in Order to Maximize Settlement Recovery in Louisiana Workers Compensation
Sometimes, an employee is injured while at work due to the actions of someone other than the employer or co-worker.
In such a situation, the injured employee will likely have a workers compensation claim AND a "third-party claim" against the individual (other than the employer or co-worker) who was responsible for the accident or the injury.
Many times, this "third-party claim" is, in fact, a separate personal injury claim.
And often, this separate personal injury claim is known as an "underlying personal injury claim" because this personal injury claim lies underneath the workers compensation claim.
Under Louisiana's “exclusive remedy rule,” an injured employee is not allowed to sue the employer (or co-workers) for damages such as pain and suffering; an employee may only obtain lost wage benefits and medical benefits for the employer's workers compensation insurance company.
However, an injured employee can sue third parties (individuals and companies besides the employer or its co-workers) for damages such as pain and suffering.
But both the employee, the employer, and the workers compensation insurance company may have valid claims against the third party.
Rights of the Employee against Third-Party Wrongdoers
Louisiana law expressly authorizes the employee to proceed against any third party for damages even though the employee has been awarded workers compensation benefits by his or her employer for the same injury.
Nonetheless, an employer or its insurance company can be reimbursed - which will prevent double recovery by the employee - when the employer or its insurance company intervenes in (or steps into) the employee's lawsuit against the third-party and required that the judgment be in favor of the employer or its insurance company in order to reimburse the employer or its insurance company.
In such a case of intervention by the employer or its insurance company, only the excess recovery goes to the employee; and in some instances, the employer or its insurance company's “recovery” takes the form of a credit against future compensation owed, permitting the suspension of those future payments.
And, the employer or its insurance company may institute its own suit against the third-party wrongdoer, in which case the employee can intervene in order to ensure that the employee recovers a maximum sum.
Ways in Which the Workers Compensation Insurance Company Can Recover in a Third-Party Lawsuit
Generally speaking an employer and its workers compensation insurance company can recover in the following ways in a lawsuit against a third party:
- A reimbursement of workers compensation benefits already paid;
- A credit against its future workers compensation obligations; and
- Judicial interest on the amounts that it recovers.
Concerning the reimbursement of workers compensation benefits that have already been paid, if the employer or its workers compensation insurance company is a party in a lawsuit against a third party, any amounts that are recovered against the third party are apportioned so that the claim of the employer or its workers compensation insurance company for reimbursement of workers compensation benefits actually paid get priority over the claim of the injured employee.
In other words, if the recovery from the third party is only enough to cover the reimbursement of workers compensation benefits already paid, then the employer or its workers compensation insurance company will get paid while the injured employee will get nothing.
This is because Louisiana law provides the employer and its workers compensation insurance company with “first dollar” rights to and a lien upon tort recovery, which means that only after the intervenor has recovered what it is due is any excess apportioned to the plaintiff.
And, the employer and its workers compensation insurance company are entitled to reimbursement out of the total amount of damages awarded, regardless of whether those damages are calculated as weekly lost wage (indemnity) benefits paid to the employee or medical expenses paid on behalf of the employee.
In addition to reimbursement for the amounts actually paid to the employee or on his behalf up to the date of trial, the employer and its workers compensation insurance company are often entitled to a credit against the tort recovery for amounts for future workers compensation payments or medical expenses to be undertaken.
The Louisiana Statutes for Settlements in Louisiana Workers Compensation
The primary Louisiana statutes regarding settlement options are La. R.S. 23:1271, La. R.S. 23:1272, and La. R.S. 23:1274, which read as follows:
§1271. Right of parties to settle or compromise
A. It is stated policy for the administration of the workers' compensation system of this state that it is in the best interest of the injured worker to receive benefit payments on a periodic basis. A lump sum payment or compromise settlement in exchange for full and final discharge and release of the employer, his insurer, or both from liability under this Chapter shall be allowed only:
(1) Upon agreement between the parties, including the insurer's duty to obtain the employer's consent;
(2) When it can be demonstrated that a lump sum payment is clearly in the best interests of the parties; and
(3) Upon the expiration of six months after termination of temporary total disability. However, such expiration may be waived by consent of the parties.
B. As used in this Part, "parties" means the employee or his dependent and the employer or his insurer. Nothing in this Section shall require the office of risk management to obtain approval of settlements from the employing state agency, department, council, board, or political subdivision.
Amended by Acts 1954, No. 724, §1; Acts 1966, No. 181, §1. Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1991, No. 892, §1; Acts 1997, No. 60, §1, eff. June 11, 1997.
§1272. Approval of lump sum or compromise settlements by the workers' compensation judge
A. A lump sum or compromise settlement entered into by the parties under R.S. 23:1271 shall be presented to the workers' compensation judge for approval through a petition signed by all parties and verified by the employee or his dependent, or by recitation of the terms of the settlement and acknowledgment by the parties in open court which is capable of being transcribed from the record of the proceeding.
B. When the employee or his dependent is represented by counsel, and if attached to the petition presented to the workers' compensation judge are affidavits of the employee or his dependent and of his counsel certifying each one of the following items: (1) the attorney has explained the rights of the employee or dependent and the consequences of the settlement to him; and (2) that such employee or dependent understands his rights and the consequences of entering into the settlement, then the workers' compensation judge shall approve the settlement by order, and the order shall not thereafter be set aside or modified except for fraud or misrepresentation made by any party.
C. When the employee or his dependent is not represented by counsel, the workers' compensation judge shall determine whether the employee or his dependent understands the terms and conditions of the proposed settlement, and shall approve it by order, unless he finds that it does not provide substantial justice to all parties, and the order shall not thereafter be set aside or modified except for fraud or misrepresentation made by any party.
D. If a suit has been filed against a third party pursuant to the provisions of R.S. 23:1101, the district court hearing the third-party suit shall, in addition to a workers' compensation judge, have the authority to approve a lump sum or compromise settlement of the workers' compensation claim under the same conditions and terms set forth in this Section for approval of such settlements by a workers' compensation judge, and such authority shall include approval and establishment of the credit due the employer. The fees of the attorney representing the employee in the workers' compensation matter shall be approved by the district court judge.
E. All compensable medical expenses incurred prior to the date of the settlement shall be paid by the payor unless the terms of the settlement specifically provide otherwise.
Acts 1992, No. 769, §1; Acts 1995, No. 1137, §1, eff. June 29, 1995; Acts 1997, No. 88, §1, eff. June 11, 1997; Acts 1999, No. 776, §1; Acts 2001, No. 1014, §1, eff. June 27, 2001; Acts 2005, No. 257, §1.
§1274. Lump sum settlements; necessity for approval
A. The amounts payable as compensation may be commuted to a lump sum settlement by agreement if approved by the workers' compensation judge as provided in this Part. In a lump sum settlement, the payments due the employee or his dependents shall not be discounted at a greater rate than eight percent per annum.
B. If the lump sum settlement is made without the approval of the workers' compensation judge, or at a discount greater than eight percent per annum, even if approved by the assistant secretary or the workers' compensation judge, the employer shall be liable for compensation at one and one-half times the rate fixed by this Chapter. At any time within two years after date of the payment of the lump sum settlement and notwithstanding any other provision of this Chapter, the claimant shall be entitled to demand and receive in a lump sum from the employer such additional payment as together with the amount already paid, will aggregate one and one-half times the compensation which would have been due but for such lump sum settlement.
C. Upon payment of a lump sum settlement commuted on a term agreed upon by the parties, approved by the workers' compensation judge, and discounted at not more than eight percent per annum, the liability of the employer or his insurer making the payment shall be fully satisfied.
D. For the settlement of compensation claims as provided in R.S. 23:1231 through 1236 the following procedure shall be followed. The claimant must present to the employer an affidavit of death of the employee, proper proof of the claimant's relationship to the deceased and his legal right to the compensation benefits. Such documentation shall be affixed to the joint petition and submitted to the workers' compensation judge for approval as hereinabove provided.
Acts 1977, No. 40, §1; Acts 1982, No. 611, §1; Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1988, No. 938, §1, eff. July 1, 1989; Acts 1989, No. 23, §1, eff. June 15, 1989; Acts 1989, No. 260, §1, eff. Jan. 1, 1990; Acts 1997, No. 88, §1, eff. June 11, 1997.