Settlement Agreements


Over the last 3-5 years there has been a movement by Carriers to disassociate themselves from preparing Employer General Releases when completing a settlement with a Claimant.   This is motivated by fear as there was significant litigation by sue-happy Claimant’s alleging collusion between their Employer and its W/C Carrier over employment issues (a baseless charge).  Plus, a W/C Carrier does not cover employment claims, those claims are covered by EPLI policy.

Yet, there is no denying the interconnectedness or “yoking” between the Employer’s interests and the Carrier’s interests when it comes to settlement.  After all, when an E/C settles a claim it behooves both co-defendants to insure that Claimant resigns from her position to avoid future W/C exposure.   Plus, an Employer is still exposed to the potential W/C retaliation claim per section 440.205, and the possibility of a claim with the American with Disabilities Act.  Finally, since almost every W/C claim involves an investigation of past and future wages, every Employer is exposed to an overtime or PTO claim which falls under the Fair Labor Standards Act. 

In truth, when E/C’s settle their W/C claims, they should look to trying to resolve every aspect of the employee/employer relationship into one nice package.  Now, the First DCA just released an opinion affirming this policy. (more…)

I’ve written before about watching out for contingent language in settlement and mediation agreements.  They can sink a settlement and invite Claimant’s to back out.  A condition written in your agreement can mean there is no agreement, unless it is binding upon both parties.

Of course, the grandaddy contingency of them all is a settlement with a Medicare Set-Aside (MSA) and the parties agree to wait for approval of the MSA from the Centers for Medicare & Medicaid Services (CMS).  I’ve always viewed settlements solely contingent upon CMS approval as settlements that are not worth the paper they are written on.   As E/C’s we are all afraid CMS could blow up a settlement and demand more money for the MSA, hence the contingency.  However, to have an enforceable settlement, we need language that bounds both parties to the CMS contingency, like giving Claimant and E/C the option to appropriate additional funds to the MSA should CMS demand more money.

Now there is a new case that puts into question whether MSA settlement contingencies are really contingencies at all.

(more…)

Many E/C’s do not consider ethics when negotiating a washout settlement with a Claimant attorney.  The goal is to get the claim over with, right?  And, the ethics of determining what is a fair fee to Claimant’s attorney is not of the E/C’s concern, right.  Wrong.

When offering a settlement lump sum to Claimant, and when an attorney fee under s. 440.34(3) is owed or alleged, the E/C is putting Claimant’s attorney in an ethical bind.  The E/C is essentially pitting the Claimant against her attorney, forcing the attorney into an ethical quandary: to carve a fee out of Claimant’s settlement monies.

When I negotiate a settlement and a fee is owed to Claimant attorney, I negotiate the two terms seperately.  In fact, almost all Claimant attorneys I deal with insist on negotiating the fee separately from the washout. 

But, when a Claimant attorney seeks a fee to be cut out of a washout settlement, and absolutely no benefits were obtained, or even paid for by the E/C, well that is plain old unethical.  Even if the E/C just wants to get the claim over with.

Last week, the First DCA responds to this last scenario, but not in ethical terms. (more…)

If you want proof showing the political divide between the Florida Supreme Court and the First DCA, then Sanders v. City of Orlando is Exhibit “A”. 

In what is best described as a oddly worded opinion, and which Justice Quince writes for the majority, the High Court grants jurisdiction to the Judge of Compensation Claims to review settlement agreements, even though the statute no longer requires JCC’s to approve settlements.   Since amended in 2001, section 440.20 only requires the JCC to consider the fairness of Claimant’s attorney fees and child support arrearage.   Under today’s law, the JCC’s no longer approve settlements.

(more…)

Lately, the First DCA has been doing some housecleaning when it comes to washout settlements; where the parties agree to completely resolve the claim for a lump sum. They confirmed that the JCC has jurisdiction to determine if a settlement agreement exists between parties, and per my recent post, found that a settlement agreement with a final authority contingency clause is not an agreement.

Now, the Court puts into question whether a written General Release–a memorialized settlement agreement–is even required in settling a W/C claim, where the Claimant is represented by an attorney.

(more…)

Sometimes it is difficult to get final authority upon settlement, especially when mediation or negotiations run late in the day.  Its 5:30 on a Friday and you just need $5000 in additional authority to get this sucker done.  So what do you do?  You agree, in the mediation agreement, to settle the claim at the agreed upon amount on a contingent basis.  You also offer the Claimant 20 days so your supervisor or the insured can get back to you in time. 

But, is this a “meeting of the minds?”  In other words, do the parties have a binding settlement when the E/C is only agreeing on a contingent basis?

According to the First DCA, no, they do not.

(more…)

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