When drawing up a compromise and release, it’s important for defendants to include as much relevant information as possible because it strengthens the enforceability of this all-important settlement document.

Emma J. Fowler

The compromise and release is how many parties choose to resolve workers’ compensation claims. It allows the parties to reach a compromise with respect to the amount of compensation paid to the injured employee while simultaneously releasing the defendant from liability. They are often preferred over a stipulated award, as a C&R buys out future medical care and can be reopened only for good cause.

Before preparing a C&R, an attorney should familiarize herself with the basic facts of the case. Take note of the following information, as it should be included in the C&R:

• The applicant’s full name.
• The ADJ number, if applicable.
• The applicant’s Social Security number.
• The applicant’s address.
• The applicant’s employer and alleged injury (including whether there is more than one alleged injury).
• The applicant’s attorney.
• Earnings at the time of injury.
• TTD/PD rates and payments made, if applicable.
• Medical spend.
• The settlement amount and 5710 fee, if applicable.
• Whether there is an Employment Development Department lien and/or any outstanding liens.
• Relevant comments, such as incorporation of addendums or Medicare set-asides, Supplemental Job Displacement Benefit voucher clauses and the basis for the settlement.

Before a C&R can take effect, it must be submitted to a workers’ compensation judge for review and approval. This ensures that the applicant is treated fairly, particularly where he is in pro per. To avoid the further hassle and cost of litigation if the C&R is not approved, parties can look to the Division of Workers' Compensation/Workers' Compensation Appeals Board Policy and Procedural Manual 2013 Revision, Section 1.91, which provides factors for the court to look to when considering whether a C&R is adequate. Where compensability is not disputed, a C&R will be considered adequate and must be approved so long as the settlement amount includes consideration for the following:

• Permanent and temporary disability that is reasonably within the range of evidence based on the medical reports submitted.
• Medical treatment, when appropriate, based on a reasonable estimate of future medical expenses.
• Any other issues included in the settlement, such as penalties or the right to reopen, in a reasonable amount.

Therefore, when drafting a proposed compromise and release, defendants should consider the above factors when deciding what to include. The following is a list of documents that defendants should consider including in the C&R:

• Medical reports with impairment ratings.
• Medical reports that discuss the medical treatment received by the applicant.
• PQME or AME reports, if any.
• If no final medical reports, a QME waiver, which waives the right to a final report from a PTP/QME/AME.
• Documents showing the absence of any EDD lien and/or that the EDD lien has been resolved.
• A statement that defendant will resolve any other outstanding liens.
• Documents showing the absence of any child support liens (sometimes judges require these for pro per applicants).
• Benefits notices.
• Medicare set-asides, if applicable.

Where a case settles before threshold issues are resolved, such as AOE/COE, jurisdiction, employment or statute of limitations, the WCJ must consider the viability of these issues. The WCJ cannot disapprove a C&R only because she believes the settlement is less than optimal; however, defendants must still include sufficient information to show that the settlement is adequate.

In cases like these, defendants should consider including any additional documents that show a threshold issue exists. For example, where employment is in dispute, a defendant could consider including a non-privileged employment record showing that the applicant was hired or terminated on a particular date.

While the above is a good guide, attorneys should remember that pragmatism is always their friend and to think practically about a claim when considering what to include in the C&R. One judge may reject a C&R that another judge approves. Sometimes, certain jurisdictions have rules or standard operating procedures that others do not. Attorneys should keep these issues in mind and also consider the unique circumstances of each case. To that end, the above lists are not exhaustive.

The compromise and release allows parties in the workers’ compensation system to “buy their peace” and avoid worrying about future litigation expenses or disputes about future medical treatment. To capitalize on the many benefits of the C&R and best serve the client, attorneys should think thoughtfully about the facts of their case and consider the items above before submitting a C&R for approval.

Emma J. Fowler is a workers’ compensation defense attorney at Bradford & Barthel’s Woodland Hills location. This entry from Bradford & Barthel's blog appears with permission.