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Litigation Management: Negotiations, Settlements, Judging Case Value &

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Presentation on theme: "Litigation Management: Negotiations, Settlements, Judging Case Value &"— Presentation transcript:

1 Litigation Management: Negotiations, Settlements, Judging Case Value &
Documenting the Agreement Presented by: Thomas F. Coleman, Esq.

2 Determine Case Value Know Applicable Law – Temporary Total Disability
Law in effect on date of injury controls (Joyce v. Lewis Bolt & Nut Co., 412 N.W.2d 304 [Minn. 1987]) Temporary Total Disability DOI pre-October 1, 1995: no cap DOI pre-October 1, 1995 to September 30, 2008: 104/week cap DOI on/after October 1, 2008: 130/week cap  Temporary Partial Disability  DOI pre-October 1, 1992: no cap  DOI on/after October 1, 1992: /week

3 Determine Case Value (cont.)
Permanent Total Disability Retirement Presumption DOI prior to 1/1/84 – none DOI 1/1/84 to 9/30/92 – presumed retired if receiving social security old age or retirement benefits (rebuttable) DOI 10/1/92 to 9/30/95 – none DOI on/after 10/1/95 – Age 67 retirement presumption (rebuttable) Social Security Disability, Survivor’s Retirement Offset after $25k paid in PTD

4 Determine Case Value (cont.)
Permanent total disability thresholds DOI on/after October 1, 1995 Irrebuttable presumption Thresholds 17% PPD 15% PPD and employee at least age 55 on DOI 13% PPD; employee at least age 55 on DOI; not high school graduate/no GED Minn. Stat. § , subd. 4 and 5 Is employee permanently totally disabled, i.e. given age, education, transferrable skills, disability, and relevant labor market, is employee capable of nothing other than sporadic employment with insubstantial income?

5 Determine Case Value (cont.)
Permanent Partial Disability DOI January 1, 1989 to September 30, 1995: Impairment compensation (IC) and economic recovery compensation (ERC) DOI on/after October 1, 1995: Impairment compensation only DOI on/after October 1, 2000: New PPD schedule increases dollar multiplier for PPD ratings (Minn. Stat. § , subd. 26)

6 Determine Case Value (cont.)
Cost of Living Adjustment (COLA) (Minn. Stat. § ) DOI prior to October 1, 1992: First COLA on first anniversary date of injury; maximum COLA 6% For DOI from October 1, 1992 to September 30, 1995: First COLA on second anniversary date of injury; maximum COLA of 4% For DOI on or after October 1, 1995: First COLA on fourth anniversary date of injury; maximum COLA of 2%

7 Determine Case Value (cont.)
Medical Benefits (Minn. Stat. § )  Reasonable and necessary for cure or relief  Medical treatment parameters (Minn. Rule to ) not applicable if:  Primary liability denied; or  Secondary primary liability denial  Medical Fee Schedule (Minn. Rule to .4070)

8 Determine Case Value (cont.)
Vocational Rehabilitation/Retraining (Minn. Stat. § )

9 Determine Case Value (cont.)
Dependency Benefits (Minn. Stat. § )

10 Know the Claim Employee’s background Benefits paid to date
TTD/TPD caps Attorney fee paid/withheld PPD Overpayments to recoup per Minn. Stat. §  Employee’s background Future earnings capacity/employability Age Educational background Employment history Transferrable skills Disability/restrictions Relevant labor market Employee credibility/ claim savvy Prior claims/litigation Criminal record Surveillance

11 Know the Claim Available Defenses Primary liability Causation
Apportionment TTD defenses per Minn. Stat. § Nature and extent of injury Contribution Fee Schedule Whether employee is qualified employee for vocational rehabilitation under Minn. Stat. § MMI post 90 days Exclusion of medical provider under managed care plan

12 Know the Claim Review Medical records
 Vocational rehabilitation records  Job logs  Personnel/wage record  DOLI file  Social Security file  Discovery  Employee’s deposition/deposition résumé/recorded statements  IME reports  Independent vocational evaluation reports  Witness statements/depositions

13 Know the Claim Is Case Ripe for Settlement?
 Restrictions – permanent or fluid?  Medical treatment – done or pending?  MMI  IME  IVE  Potential future claim – retraining/medical/PPD/indemnity

14 Know the Claim Know Judge Petition for Judicial Reassignment – 10 days
 Petition for Judicial Reassignment – cause  Minn. Stat. § Minn. Rule

15 Know the Costs of Litigation
Defense attorney fees  Costs of medical expert/vocational expert  Disruption of insured’s business  Discovery  Cost of maintaining reserves/open file  Opposing counsel’s:  Costs Attorney fees: Contingent Hourly Roraff .191 fees Heaton Edquist

16 Exposure/Settlement Evaluations
Get Realistic

17 Legal guardian or conservator NOT required
Settlement Conclusively Presumed To Be Reasonable, Fair, and In Conformity With Act – No Judicial Approval Required All parties represented by legal counsel (not applicable to intervenors) Medical and vocational rehabilitation benefits are NOT closed out full final.  Legal guardian or conservator NOT required   Minn. Stat. § , subd. 2

18 Negotiations With Opposing Counsel
Know Thine Enemy Experience Caseload Ability to try a case Willingness to: Try a case Settle Financial position Calendar conflicts Negotiating techniques

19 Negotiations With Opposing Counsel
Know settlement authority WCRA approval necessary? Be reasonable Do not overreach on pro se employees Do not bid against yourself

20 Deal with Intervenors Appropriately
Know extent of claim, apply Fee Schedule, be aware of Spaeth claims  Give intervenors Notice of Right to Intervene Failure to do so may result in 100% liability Intervenor’s failure to timely intervene after notice may extinguish their claim (Minn. Stat. § ) 30 days after notice of administrative conference; or 60 days after service of notice of right to intervene. Both Employee and Employer/Insurer have obligation to investigate intervention claims and give notice to potential intervenors  Fee schedule bills when appropriate

21 Documentation of Settlement
Utilize attorney  Contents of Stipulation (Minn. R , Subp. 1) Statement of admitted material facts Matters in dispute/employee claims – attach supporting documentation Employer and Insurer’s claims/defenses – attach supporting documentation Stipulated facts (e.g. DOI, nature of injury, MMI) Establish settlement is fair and reasonable Preserve subrogation rights per Minn. Stat. §

22 Documentation of Settlement
Contents of Stipulation (Minn. R , Subp. 1) Intervenors  Claim itemization Extinguish intervention rights – failure to timely intervene Settlement terms Payments Close outs – be precise, explicit; specify with particularity all benefits closed out* Cannot close out unknown claims as claims not yet in dispute, i.e. consequential injuries * A stipulation need not explicitly reserve the age 67 retirement presumption as a defense to a PTD claim. Frandsen v. Ford Motor Co., 801 N.W.2d 177 (Minn. 2011)

23 Contents of Stipulation (cont.)
Attorney Fees  Previously withheld fees  Contingent  Hourly – Roraff, Heaton, .191, Edquist  Costs

24 Social Security (SSDI) Language
Of the $________ settlement, the sum of $_______ is to be paid to the Employee’s attorney as and for attorney’s fees. The Employee is currently ___ years old having been born on _______, and has a life expectancy of ___ years, ___ months. The balance of $________ shall be paid to the Employee and shall represent a compromise payment of weekly indemnity benefits over the projected term of the Employee’s life expectancy of ____ months, at the rate of $_____ per month, or $_____ per week.  - Or -

25 Social Security (SSDI) Language
That it is stipulated by and between the parties that had the Employee proceeded to trial and been successful with his permanent total disability claim, he would have been found to be permanently and totally disabled as of (_________). It is further stipulated by and between the parties that in arriving at the lump sum figure, the parties utilized the social security offset provision found in Minn. Stat.§ (4). Specifically, it is stipulated by and between the parties that Employee would have been paid $25, in weekly permanent total disability benefits as of (___________), had this case been actually litigated and an Award of permanent total disability benefits entered by a compensation judge. In calculating a lump sum payment, Employer and Insurers applied the social security offset as of (__________). In other words, the money being paid to the Employee in connection with this Stipulation for Settlement was arrived at by reducing Employee’s permanent total disability benefits by the monthly amount of social security. Employee has opted to receive reduced permanent total disability benefits in the form of a lump sum pursuant to the Stipulation for Settlement rather than receiving them on a periodic basis, having accepted a discount to present value. Additionally, it is recognized that the offset provisions of Minn. Stat.§ (4) (and Minn. Stat.§ (2)(e)) have been applied to this case, arriving at the lump sum.

26 Medical Closeouts Typical “soft” medical expenses Chiropractic
Acupuncture/acupressure Chronic pain clinic (inpatient/outpatient) Psychiatric/psychological Chemical dependency treatment Health club Durable medical equipment Durable exercise equipment Household remodeling Home nursing services by family members Massage therapy Treatment with certain healthcare providers Motor vehicle modification Certain medications, e.g. narcotics.

27 MSA Trust CMS approval of MSA Trust required if:
Must account for and reasonably allocate to Medicare’s interests if: Employee receiving SSDI Employee over age 65 Reasonable expectation of Medicare enrollment within next 30 months  CMS approval of MSA Trust required if: Employee: Medicare eligible; and Settlement is $25, or more; or Reasonable expectation of Medicare enrollment within 30 months and settlement exceeds $250,000.00 Bifurcate work comp settlement from MSA Trust approval

28 Medical Closeouts Be aware of the employee’s situation regarding Social Security and whether or not a Medicare set aside is required. Consult with your client to determine if the best way to go is establish a Medicare set aside, or if you should simply leave various medicals open. Certain medical expenses are not covered by Medicare and could be closed out in a Stipulation without having to establish the Medicare set aside.

29 Hold Harmless Language
Do not include hold harmless language in the Stipulation wherein the employee agrees to hold the employer and insurer harmless as and against any third-party intervenors who may have a right of intervention. The courts have consistently found these provisions unenforceable. Van Den Einde v. Henry’s Candy Store, 1992 WL (W.C.C.A ).

30 Settlement of Non-Workers’ Compensation Claims
Sometimes as part of overall workers’ compensation settlement, the employee will agree to voluntarily resign his or her employment and will agree to waive any non-work compensation related employment law claims. These claims cannot be closed out under a workers’ compensation Stipulation as the compensation judge lacks jurisdiction to consider and determine claims outside of Minn. Stat. § 176. Have the employee execute concurrently with the Stipulation, an employment law Release and Voluntary Resignation of Employment. Be sure to allocate adequate consideration to the close out of employment claims and a voluntary resignation. See Karnes v. Quality Pork Processors, 532 N.W.2d 560 (Minn. 1995).

31 Settlement of Non-Workers’ Compensation Claims (cont.)
Separate consideration Employment Release  Voluntary resignation

32 Question and Answer Language
Purpose: to ensure that the employee knowingly and willingly consents to agreement Sample Language The Employee agrees and represents to the Office of Administrative Hearings, Workers’ Compensation Section, that he/she freely and without reservation has answered and initialed the questions following in his/her own handwriting:

33 Question and Answer Language (cont.)
Employee must answer and initial all questions. Have you read the entire Stipulation for Settlement? Do you understand it? Do you realize and understand in entering into this Stipulation for Settlement that the difficulties you have had with your (injury) might change in the future and become substantially worse than they are at present? Do you realize and understand in entering into this Stipulation for Settlement that if your (injury) condition should unfortunately become worse in the future, it could involve a disability of a very serious and prolonged nature and even surgery?

34 Question and Answer Language (cont.)
Do you acknowledge and stipulate that your attorney, (Full name), has reviewed and explained the provisions of this Stipulation regarding (supplementary benefits and) adjustments and do you further acknowledge that you understand that this Stipulation for Settlement forever precludes claims for (supplementary benefits and) adjustments? Do you acknowledge and stipulate that your attorney, (Full name), has reviewed and explained the provisions of this Stipulation for Settlement to you and that you fully understand and comprehend the terms and scope of this Stipulation for Settlement?

35 Question and Answer Language (cont.)
Do you wish to have the Office of Administrative Hearings, Workers’ Compensation Section, approve this settlement on the terms and understanding set forth above? Further Recommendation: In cases where surgery has been recommended or discussed, it would also be advisable to add an additional question wherein the employee acknowledges that a certain type of surgical procedure has been discussed or recommended by his treating doctor or other doctors, and that this surgery could result in further additional disability. You would also want to attach as an additional Stipulation exhibit the medical report, chart note, or correspondence from the medical provider documenting the need for or possibility of surgery.

36 Contribution Claims

37 Settlement Due Dates Filing of Stipulation within 45 Days of settlement Payment per Award within 14 days from the date of service and filing of Award (Minn. Stat. § , subd. 26)  Consequences of late payment: Penalty per Minn. Stat. § to Division Penalty per Minn. Stat. § to Employee

38 Questions? Thank you.

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