A Longshore or Defense Base Act settlement is technically a settlement application, not a settlement agreement. The parties negotiate an agreement between themselves, but a third party must approve the written application describing that agreement before the agreement takes effect. As such, the parties to a claim submit their settlement application to either an Office of Workers Compensation Programs’ district director or an administrative law judge. The adjudicator will determine whether the settlement is adequate. Typically, this determination is made within thirty days. See 20 C.F.R. § 702.243(b).
What is “adequate”? It depends on the facts and circumstances of the individual case, which the adjudicator must consider. Specifically, the Code of Federal Regulations states:
(f) When presented with a settlement, the adjudicator shall review the application and determine whether, considering all the circumstances, including, where appropriate, the probability of success if the case were formally litigated, the amount is adequate. The criteria for determining the adequacy of the settlement application shall include, but not be limited to:
(1) The claimant’s age, education and work history;
(2) The degree of the claimant’s disability or impairment;
(3) The availability of the type of work the claimant can do;
(4) The cost and necessity of future medical treatment (where the settlement includes medical benefits).
See 20 C.F.R. § 702.243(f).
The adjudicator can only do their job if they are provided with the appropriate information. Again the Code of Federal Regulations spells out exactly what the parties must submit in a settlement application:
(b) The settlement application shall contain the following:
(1) A full description of the terms of the settlement which clearly indicates, where appropriate, the amounts to be paid for compensation, medical benefits, survivor benefits and representative’s fess shall be itemized as required by § 702.132.
(2) The reason for the settlement, and the issues which are in dispute, if any.
(3) The claimant’s date of birth and, in death claims, the names and birth dates of all dependents.
(4) Information on whether or not the claimant is working or is capable of working. This should include, but not be limited to, a description of the claimant’s educational background and work history, as well as other factors which could impact, either favorably or unfavorably, on future employability.
(5) A current medical report which fully describes any injury related impairment as well as any unrelated conditions. This report shall indicate whether maximum medical improvement has been reached and whether further disability or medical treatment is anticipated. If the claimant has already reached maximum medical improvement, a medical report prepared at the time the employee’s condition stabilized will satisfy the requirement for a current medical report. A medical report need not be submitted with agreements to settle survivor benefits unless the circumstances warrant it.
(6) A statement explaining how the settlement amount is considered adequate.
(7) If the settlement application covers medical benefits an itemization of the amount paid for medical expenses by year for the three years prior to the date of the application. An estimate of the cost of such medical treatment as well as an estimate of the cost of such medical treatment shall also be submitted which indicates the inflation factor and/or the discount rate used, if any. The adjudicator may waive these requirements for good cause.
(8) Information on any collateral source available for the payment of medical expenses.
Whenever I prepare a settlement agreement, I always use 20 C.F.R. § 702.242(b) as my checklist. If I can check off the existence of each of the eight content requirements, then I am confident that I am submitting a regulatory compliant settlement.
It is easy to find additional online information about Longshore and Defense Base Act settlement requirements. I recommend reading Yelena Zaslavskaya’s article, “Resolving Longshore Claims Through Settlements and Stipulations,” which is available at LexisNexis’ Workers Compensation Law blog.
Invitation: If you need assistance with a Longshore or Defense Base Act settlement, then contact Jon Robinson at (985) 246-3194 or [email protected] for a free case evaluation.