Earlier this week, the Benefits Review Board (“BRB”) issued its published decision in Richardson v. Huntington Ingalls, Inc. Regular readers of this blog will recognize Richardson as the interesting case about Section 8(i) settlement agreements. To recap, the claimant and the employer/carrier, both represented by attorneys, entered into a settlement that the District Director disapproved because of adequacy concerns. The parties referred the claim to the Office of Administrative Law Judges, added another $500 to the total settlement amount and asked the judge to issue an Order approving the settlement. A dispute arose between the two represented parties and the Solicitor of Labor’s office. The Solicitor (on behalf of the Director) argued that the settlement was not adequate. The judge disagreed and issued the settlement Order. The Solicitor appealed to the BRB.
The BRB agreed with the administrative law judge, and in doing so, published a very significant opinion discussing adequacy for Section 8(i) settlement agreements. The BRB’s opinion affects all Longshore claims, including claims arising under the Longshore and Harbor Workers’ Compensation Act’s extensions–like the Defense Base Act.
Some of the highlights of the BRB’s decision include:
(1) The Board rejected the Director’s contention that an administrative law judge may not distinguish between settlements by claimants without legal representation and those with legal representation in determining the amount of specific information that must be disclosed in order to demonstrate the adequacy of the settlement. Instead, “general assertions may be sufficient to justify accepting a significant discount from the judgment value of the claim, if the claimant is represented by counsel who is presumed competent and ethical.”
(2) Settlements don’t have to be based on actuarial tables–meaning, the parties do not have to settle their disputes as if there was a final order in place, and for an amount that equals “the present value of future compensation payments commuted, computed at the discount rate specified” in the regulation. A settlement is “not ‘conclusively’ inadequate if it does not provide a claimant with the amount she would have received had she had proceeded with litigation and fully succeeded in prosecuting her claim.”
(3) Parties must explain the adequacy of their settlement in accordance with 20 C.F.R. § 702.243(f), and litigation risks are an important consideration. The BRB dismissed the Director’s complaints that Claimant’s personal reasons for her decision to settle were not “good enough” to be adequate. “In light of the employer’s litigation strategy, claimant’s acknowledgments thereof, and the fact that the administrative law judge found them credible, it is unreasonable for the Director to make judgments on the evidence as it stands and to presume that claimant’s success is assured and that the risk to claimant of litigating her claim is slight.”
(4) Settlements are compromises. The represented parties assessed their position and their opponent’s position, and they came to a mutually acceptable solution.
Here is a copy of the BRB opinion: Richardson v. Huntington Ingalls, Inc., BRB No. 13-0476 (2014) (published).
And here is a copy of the ALJ’s opinion: Richardson v. Huntington Ingalls, Inc., 2013-LHC-01317 (Jun. 24, 2013).
Note: Both a tip of the hat and a congratulations to Donald Moore.
(Note: I originally published this post on Navigable Waters: A Maritime, Longshore and Defense Base Act Blog.)