Verdict - Summer 2013 - (Page 26)

feature Ten Ways to Protect Clients Through Workers’ Compensation Settlements T he most critical juncture of every workers’ compensation case is its resolution. In many instances, that resolution comes in the form of a settlement. Parties to a workers’ compensation case may settle the claim by a stipulated settlement that must be approved by the State Board of Workers’ Compensation. O.C.G.A. § 34-9-15 and Board Rule 15 provide certain statutory and regulatory protections by establishing minimum requirements for settlement approval. However, it is important to understand BY W. GREGORY POPE that there are many factors not specifically contemplated by the Act and Rules that must be considered in order to adequately protect the claimant. This article, while certainly not intended to be an absolute or exhaustive list, provides ten ways to protect the claimant during the settlement of a workers’ compensation case. The Board will not approve stipulated settlements that contain waivers or releases of causes of action over which it has no jurisdiction. See Board Rule 15(g). However, many employers and insurers seek to circumvent Rule 15(g) by asking claimants to sign additional settlement documents that are not submitted to the Board for approval. Some employers, especially those that are self-insured, seek to have their employees voluntarily resign and agree not to re-apply for employment with the company. Some employers even seek execution of broad general releases with unlimited indemnification clauses. These collateral settlement documents which are not submitted to the Board for approval require the most attention and care. You should either refuse to allow your client to sign these collateral settlement documents or should at least limit them significantly. 26 Georgia Trial Lawyers Association 1 Tax Consequences of General Releases Generally speaking, the client’s portion of the workers’ compensation settlement is exempt from federal and state income taxation. However, consideration paid for releases for potential claims not involving bodily injury are not typically tax exempt. If you decide to allow your client to execute a general release of all claims, it is extremely important that totally separate consideration be paid for that release. You should also add language that clearly establishes that nothing in the release settles the workers’ compensation case. The workers’ comp case must be settled for wholly separate compensation in a wholly separate stipulated settlement which must be approved by the Board. The consideration for the general release can be nominal, but it must be paid separate and apart from the workers’ compensation stipulated settlement so that there is no potential for adverse tax consequences down the road if the client is ever unfortunate enough to be audited by the Internal Revenue Service. 2 Never Execute a General Release if Third-Party Liability May Exist If a work injury arises from an incident for which a third party may be held responsible, there is a potential lawsuit against the third party. If there is any potential that your client may be able to pursue a third party case, you should never agree to a general release because you would likely be releasing that claim. Either refuse to have your client execute the release or make it a limited release. Change the caption of the release to reflect that it is a limited release, not a general release. Add limiting language throughout the release

Table of Contents for the Digital Edition of Verdict - Summer 2013

President’s Message
A Primer on Birth Injury Cases and How to Keep Them “Simple” for the Jury
Online Research of Potential Jurors: A Survey of Resources and Ethical Boundaries
Jury Selection and The Millennials
Confessions of a Trial Lawyer Geek: Great iPad Apps for Trial
GTLA Out & About
Ten Ways to Protect Clients Through Workers’ Compensation Settlements
A Letter from Your Listserv Committee
Case Updates: What’s New?
Workers’ Comp: Recent Developments
Champion Members
Welcome New GTLA Members!
Court Reporters Marketplace
Notes: What’s New with GTLA Members

Verdict - Summer 2013

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