How
Much is My Comp Case Worth?
When all is said and
done, the bottom line for most people is the answer to this question -
the system is, after all, workers
compensation. Unfortunately, this question is much easier to ask
than it is to answer, as there are many issues that have a bearing on a
case value. In this article we will deal with the obvious -
an accepted case where benefits
have been paid, though there may be some benefits still due and owing.
In a future article we will deal with the case where the claim was not
accepted.
The first order of business is to set
expectations in line with reality.
First, all work comp systems cap out
the weekly benefit payment. Since all awards and settlements are
predicated on this weekly benefit payment, there is a limit to the value
of your comp case.
Second, remember that the work comp
system is a compromise - it
was intended to begin immediate payments to an injured worker at some
reduced rate in exchange
for employer exemption from civil lawsuits. Part of the compromise is
that the employer would face a limited financial exposure. So, an auto
accident case civilly that might generate a $200,000 jury verdict, may
generate only $20,000 in a work comp award.
Third, don’t forget about all the
benefits you may have already received! Many injured workers like to
compare their work comp cases to some one elses slip and fall case where
the claimant received a ~200,000
jury verdict, but forget that
they have received benefits in the form of indemnity and medical
treatment for the same 3 year period that the slip and fall claimant was
litigating and getting nothing.
Okay, now that we are done with all
the caveats, lets do a brief review of what the benefits are in workers
compensation, so that we have an understanding of how this all fits
together in the valuation of a case.
Those benefits are: temporary
disability indemnity (TD), permanent
disability indemnity (PD). medical treatment, medical-legal, and
vocational rehabilitation (VR). In addition, each of these
benefits can be the subject of one or more forms of penalties, which are
also benefits so far as most state supreme courts that have interpreted
respective laws are concerned.
Temporary disability is paid when you
cannot work so long as you have a physicians opinion that concurs with
that claim of status. On occasion there may be weeks of TD aggregated
that the insurance company failed to pay, either because they had a
different opinion, because they were negligent, or because of some other
information that they may be in possession of. Depending on the
prevailing medical opinion, there may be retroactive periods of
temporary disability due. This may constitute a part of your ultimate
settlement or award.
Permanent disability is the
compensation awarded for the loss of value of your skills in the open
labor market - meaning
that if you are a piano player and injured your index finger which then
prevents you from performing concerts, then presumably your value to
concert going fans of Piano players would he less. Typically the PD
portion of the award is what your attorney is paid out of. This too is
limited by a schedule, and does not compensate for pain and suffering,
loss of consortium, or any of those other fuzzy valuations that are a
part of a personal injury jury verdict. PD is based on
medical report language, which is converted to a number based
on
a schedule, which is then
plugged into a table to determine ultimate valuation. Adjustments are
typically made to account for your age and occupation at the time of
injury.
Most workers compensation awards
entitle the injured worker to medical treatment related to the Injury
for that persons life. This is something that most insurance companies
are quite willing to settle because of the life time valuation of
such an award, and the uncertainty of what may lie in the future,
because typically any aggravation of an earlier work comp covered injury
may mean that the carrier is on the hook for all of the treatment.
Medical-legal is the
payment of experts to provide expert opinion or testimony on your case,
typically medical reports. The future value of this benefit isn’t
much, but failure to pay in the past may generate penalties to which you
may be entitled.
Finally, vocational rehabilitation, which used to be very valuable as an
independent benefit, is seeing less value since most states have put a
cap on the amount of money to be spent on vocational rehabilitation.
Some states, like California recently, allow claimants to settle out
vocational rehabilitation rights with a lump sum.
Now that we have reviewed what the benefits are in a typical
workers’ compensation case, how do we put dollar figures on it? For
the most part, a valuation of most benefits is simply figuring out what
was due when, and whether it was paid. For example, ultimately it may be
determined that you were temporarily disabled for a year, and are
entitled to a year of TD, but the insurance company only paid TD for six
months. If your ID rate was $460 per week, then $460 times 26 weeks is
$11,960. This same determination may be made relative to vocational
rehabilitation as well - you may
have been entitled to vocational rehabilitation for a period of time
where the insurance company did not provide it. Usually the right to
vocational rehabilitation includes some monetary benefit intended to
assist financially while you try and get going In a new job.
Past medical benefits are usually the purview of the physicians and
other medical vendors, and you have little to receive from their
settlements. But, If you are entitled to future medical care, then there
is a value that can be determined. This valuation will be reduced to
present value.
Present valuation is simply figuring out what a reasonable rate of
return would be on an investment (i.e. the current amount felt necessary
for your medical care), then projecting that rate of return out you’re
your lifetime. It is simply application of the old adage that a dollar
today is worth more than a dollar tomorrow.
Permanent disability, for all of the schedules and other attempts at
objectification, is more difficult, primarily because the physician’s
medical report language has to be converted into a number, this in
itself requires subjective Interpretation. Suffice to say, a discussion
of how permanent disability indemnity Is determined is beyond the scope
of this article. But that’s okay because we will deal with the
topic of permanent disability valuation in the next article in this
series.
Additional useful information on worker's compensation is available
in our Worker's Compensation
Memorandum.
Please feel free to call our office at (951) 275-0111 or
e-mail us at peter@pslaw.com
regarding your questions about worker's compensation. You may also
complete print and complete our Workers'
Compensation Interview Form which is in a PDF format. You may
FAX your completed Workers' Compensation Interview Form to (909)
275-0200.
A PDF version
of
this document is also available.
Peter M. Schaeffer Esq.
