A Settlement Isn’t a Settlement Until a Judge Approves It

Remember, under the Louisiana Workers’ Compensation Act, all settlements must be submitted to a judge for approval before it is binding on the parties. The mere reaching a full and final settlement agreement among the parties, or even confirming the settlement terms in writing, is still not a binding. In other words, there is no full and final settlement in Louisiana until the judge says that there is a settlement.

If your claimant is not represented, your attorney and the claimant will need to attend a settlement conference hearing prior to a judge approving a settlement. This is different from other general liability claims where the parties can simply agree to a settlement, then file dismissals and sign Releases and go along their way. Depending on the issues associated with your case, negotiations may be successful, but you may not officially have a settlement for days or weeks later.

Remember, unless you negotiate otherwise, you must continue to pay indemnity benefits until the date that a judge approves your settlement. You’re also still responsible for ongoing medical treatment until a settlement is approved, AND you’ll be responsible for paying medical bills for treatment that was approved prior to the judge’s approval. It is important to consider these issues whenever analyzing your reserves. As a best practice, I recommend making it clear during your negotiations that the claimant’s attorney must file settlement documents with the Court within two weeks of receipt of same. This will stop claimants and/or their attorneys from holding on to settlement documents in order to receive two or more indemnity checks before the settlement is approved. Also, if you have recently approved, for example, 12 sessions of physical therapy, you can also negotiate that the claimant will be responsible for the payment of the remaining sessions following approval of the settlement by the judge. This must all be part of your negotiations because if you approved those sessions then settle, you may still be responsible for those physical therapy sessions based on the Act, even after you’ve settled your claim. The last thing you want is to deal with additional litigation following a settlement of your claim.

As Patrick mentioned in last week’s blast, this is Settlement Season. However, make sure you have all your ducks in a row when it comes to your reserves and ongoing medical treatment. If you ever have any questions regarding when to stop paying indemnity benefits or whether you owe additional medical treatment following a settlement, do not hesitate to call us. A quick phone call can potentially save you thousands in penalties and attorney’s fees.