What Is A Lump Sum Settlement In Rhode Island?​

What Is A Lump Sum Settlement In Rhode Island?

Question

What does a lump sum settlement mean in Rhode Island?

Answer

A lump sum settlement is an agreed-upon value paid to the employee that ultimately closes the case.

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Lump Sum aka Commutation

A lump sum settlement in Rhode Island workers’ compensation cases is often referred to as a commutation. This situation generally involves a person who’s been on workers’ compensation for six months or more. If it doesn’t look like the employee is likely to return to his or her job for whatever reason, then there is the possibility of a lump sum settlement or commutation. In these cases, we try to calculate a fair number that takes into consideration how much longer the person would even be entitled to collect checks versus the likelihood that they could ever collect checks for that period of time before being knocked off by the employer.

Appearing Before The Judge

We try to arrive at a number that both sides are willing to accept. In order to do this, we must appear before a judge of the workers’ compensation court and explain the settlement. The judge will ultimately decide whether or not he thinks a settlement is in the best interest of both parties and decide whether or not to approve it accordingly.

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Is Estimating The Value Of A Settlement Difficult If I’m Totally Disabled?

Is Estimating The Value Of A Settlement Difficult If I'm Totally Disabled?

Question

How do I estimate the value of my settlement if I’m totally disabled?

Answer

This is more difficult to estimate because the employer has to pay indefinitely.

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The Clock Isn't Ticking

If someone is totally disabled, then estimating the value of a settlement is a bit more difficult. This is because the exposure to the employer is potentially much larger than it would be in the traditional or typical case where a worker is “partially” disabled (and therefore only entitled to weekly checks for 312 weeks or six years). When an employer looks at the exposure on an employee who is totally disabled, the six-year limitation that generally applies to the people who are partially disabled does not apply. That is to say that the six-year clock for the checks is not ticking. Theoretically, an employer has a lifetime of exposure for an employee who is totally disabled, because they will continue to receive weekly checks until they die or until their total disability is removed.

Lump Sum

The other thing that makes the value of a total case larger is the fact that weekly benefit checks will increase over time through the cost of living adjustment (COLA) provisions of the Rhode Island Workers’ Compensation Act. These provisions provide that employees who have been totally disabled for more than a year will get an annual cost of living adjustment to their weekly check. In a given year, there may be no cost of living increase, and other times it may be as high as four percent or more. On average, though, the exposure to the carrier grows significantly, and almost exponentially if the injured worker outlives their life expectancy. Insurance companies are usually much more motivated to resolve cases like this for a fixed lump sum number.

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Does The Date Of My Injury Count Toward My Workers’ Comp Claim?

Is The Date Of The Injury Counted When
Determining Time Lost From Work?

Question

Does the day of my injury count toward my workers’ comp claim?

Answer

The date of the injury is not counted when determining time lost from work. The RI workers’ compensation act says the injury must first prevent you from being able to earn your full wages for more than 3 days.
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Is The Injury Compensable?

The date of the injury is not counted when determining time lost from work. When determining whether or not your work-related injury is compensable under the Rhode Island Workers’ Compensation Act, the law provides that your injury must prevent you from being able to earn your full wages for more than three days. Typically, day one would be the day after your injury or any day after your injury that you officially missed time, without counting the first day.

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What Should I Think About Before Settling My Workers’ Comp Case?

What Should I Think About Before Settling
My Workers’ Compensation Claim?

Question

What are some things I should consider before settling my workers’ comp claim?

Answer

It is important to do a cost-benefit analysis to figure out if your settlement is worth it.

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The Cost-Benefit Analysis

Before settling your workers’ compensation claim, you should conduct a cost-benefit type of analysis where you consider what monies you are likely to receive in future weekly checks and other benefits to the natural end of your case. If you weigh that amount against what you are being offered in terms of a settlement, you might find that you could potentially recover more in a settlement than what you are likely to collect on a weekly basis if you don’t settle. On the other hand, you may feel that you are likely to collect more money, albeit on a weekly basis, if you do not settle.

It's Not All About Money

Anyone who is considering settling their workers’ compensation case has to consider a lot of things besides the money, such as future medical treatment and whether or not they have a job to return to, or health coverage. At the end of the day, the key factor will be comparing the amount of a settlement to the amount you are likely to collect without a settlement, understanding that it is impossible to know for sure how much that will be.

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How Is A Workers’ Comp Settlement Calculated?

How Is A Workers' Comp Settlement Calculated?

Question

How do they calculate how much my workers’ comp settlement is worth?

Answer

One person doesn’t decide your settlement amount- it is an agreement between both sides.

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Workers' Comp Is An Agreement

First, understand that no one person decides what the settlement amount will be. Not you, not the insurance company, not your employer, not opposing counsel, not the judge. A settlement can only happen when both sides agree on an amount that, if paid to you, ends your case for all time. Beyond that, the court must approve any settlement which, generally is not a problem.

Benefits Explained

When determining the settlement value of your case, you will want to consider the amount that you get per week in your present workers’ compensation check and how much longer you are likely to continue to receive that check on a weekly basis. You will also want to consider whether or not you’re likely to be suspended from benefits, and/or whether or not you are close to “the gate” (which is the amount of time that any person in your situation is allowed to collect weekly benefits).

Case Compromise

With any workers’ compensation settlement, you have to be willing to compromise, because in many cases there is no guarantee that you’ll actually collect all that you could possibly collect. When each side determines their risk, there is often some lump sum amount that can be arrived at that fairly compensates the employee, and that the employer feels is in their best interest because it ends their exposure forever. In a traditional personal injury claim, a jury can officially determine what a case is worth. Therefore, in a personal injury case, both sides can fight all day long as to what the “true value” of the case is, but no one really knows for sure unless they have a trial and the jury decides for them.

Employer vs Employee

Unlike cases that get decided by a jury, there is no mechanism for getting a determination on what you’re entitled to as a lump sum to settle your workers’ compensation case. The only way to truly know, ironically, is to not settle and see what happens. Therefore, to arrive at a settlement, the employer/insurance comapny has to look at the maximum amount of exposure or money that they could potentially pay out over time, and the employee has to determine what the “worst case” scenario is for them under the facts of their particular case. Sometimes, both sides can agree on a number. Sometimes they can’t.

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Can I Still Obtain A Workers’ Compensation Settlement If The Accident Was My Fault?

Can I Still Obtain A Workers’ Compensation Settlement If The Accident Was My Fault?

Question

I was injured at work but it was my fault- will workers’ comp cover it?

Answer

It is still possible to get workers’ comp benefits.

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A Workers' Comp Settlement Is Possible

If an accident is your fault, you can still be entitled to workers’ compensation benefits, and thus a workers’ compensation settlement would be possible. The only exceptions that could bar you from having a workers’ compensation settlement are the same exceptions that would prevent you from having a workers’ compensation case at all.

When A Case Is Questionable

For example, there is the horseplay exception, which generally prevents workers’ compensation benefits for workplace injuries that are the result of “horseplay” on the part of the employee. However, there are exceptions that require us to look at the facts of your case very closely to make sure the exclusion does not apply to you. You can also be barred from workers’ compensation for injuries you sustain because you were intoxicated, or committing a crime when you were injured. Workplace fights that result in injuries are another potential exception that could bar you from benefits, but it’s important to note that if the fight originated by something regarding the work itself, or if you are not the aggressor, you may still be entitled to collect comp.

The System Of Workers' Comp

Just because you may have been careless, or an incident was your fault, you are absolutely still entitled to workers’ compensation benefits provided that all of the other factors that you are required to prove are present. This is what is meant when people say workers’ compensation is a “no fault” system. For example, you may be guilty of being injured because you are “clumsy” in doing your work, but if you got hurt doing your job, you’re entitled to workers’ compensation benefits.

Things To Remember

When the legislature created the workers’ compensation system, the goal was to create a system that provided compensation for workers who get hurt at work. The trade-off that occurred when creating this system is that while the worker does not have to show that his employer was negligent or at fault for the injury, the amount that the worker is entitled to receive under the workers’ compensation system is not equal to what he or she potentially could recover in a “traditional” personal injury case. At the same time, it is also important to note that even if your employer was negligent or at fault for your injuries, you are not entitled to anything more than injured workers who were hurt through no fault of the employer. Please remember, however, that some work injuries result in the injured worker being able to collect benefits under the Rhode Island workers’ compensation laws and pursue a personal injury case as well (for example, if you drive for a living and someone rear-ends you, you can be on comp and pursue a personal injury case against the driver that hit you).

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Will Workers’ Comp Pay For Non-Accidental Work Injuries in RI?

Will Workers' Comp Pay For Non-Accidental
Work Injuries in Rhode Island?

Question

I was injured at work but it wasn’t an accident- will workers’ comp cover it?

Answer

Workers’ Comp can cover non-accidental work injuries.

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Injuries Don't Need to be an Accident

Workers’ compensation can cover non-accidental work-related injuries. There are different types of situations where an employee who is injured would be entitled to workers’ compensation benefits, even in the absence of a discreet or acute “accident” or “injury.”

Injuries Build Up Over Time

We typically see these types of cases when an employee must come out of the workforce due to repetitive work activities that, over time, become disabling them to the point that they are no longer able to work full duty. As long as we can show that this disability is the result of an occupational illness or disease, or by repetitive work activity that cumulatively, over time, resulted in the inability to work, then there would be a workers’ compensation case.

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