It is estimated that less than 5 percent of workers’ compensation claims go to trial. The vast majority of the others are either
- settled out of court, or
- settled through mediation or arbitration.
Nevertheless, the best way to secure an adequate settlement is to pursue the case with the preparation and thoroughness that would be necessary to succeed at trial.
How often will a workers’ compensation case go to trial?
A common estimate is that around 5 percent of workers’ compensation claims go all the way to trial.1 However, this number can be misleading because some states define the “trial” in workers’ comp cases differently. In some states, it includes the administrative hearing, a hearing before a magistrate judge, or arbitration. In others, it only includes a trial heard in court. Because of this discrepancy, 5 percent is likely an overestimation.
Not all states provide data on the progress of workers’ compensation claims. Those that do, though, show that an extremely low number go to trial in a courtroom.
For example, in Illinois, the Workers’ Compensation Commission estimates that, of the approximately 40,000 workers who submit an injury report to the Commission in a normal year, the arbitrator only has to issue 1,000 decisions.2 This means that only 2.5 percent of the claims filed require a ruling by an arbitrator.
Of those 1,000 decisions by an arbitrator, only an estimated 500 are appealed to the Workers’ Compensation Commission and only about 125 make it to a trial court.3 This means that less than 0.3 percent of all workers’ compensation claims make it to a trial in a courtroom.
The numbers from Michigan are similar. In 2019, the last year before the coronavirus pandemic skewed the data, 5,558 new cases were filed for workers’ comp. Of those, only 58, or a little over 1 percent, required a disposition by a magistrate to resolve the claim.4
How are most workers’ comp claims resolved?
The vast majority of workers’ comp claims are settled or uncontested.
Some workers’ compensation claims go uncontested. They can be uncontested if:
- the claim gets denied and the worker does not appeal, or
- the employer or its workers’ compensation insurance company agrees to pay the claim in its full amount.
In either case, no dispute arises.
A workers’ comp claim can get settled at any point between the filing of the claim and the trial. These settlements are compromises between the hurt worker and the employer’s insurer. They are generally the result of a series of negotiations between the victim’s workers’ compensation lawyer and the insurance company. Many go through the process of mediation or arbitration.
Many settlements are struck at the mandatory settlement conference. Settlement agreements can come in 2 forms:
- a stipulation and award, where the workers’ comp insurer agrees to provide future medical care for the work-related injury, or
- a compromise and release, where the insurer pays a lump sum of money for the anticipated future medical treatment, with some of that money going into a Medicare Set-Aside fund, if necessary.
These settlement negotiations aim to compensate the worker for:
- future medical care,
- lost wages from any ongoing temporary disability from the work injury,
- lost wages from any period of total disability that kept the worker at home after the date of injury, and
- lost income from a permanent disability that will keep the employee out of work.
Importantly, and unlike in personal injury claims, there are no workers’ compensation benefits that cover the worker’s pain and suffering.
The workers’ compensation settlement amount will be based on numerous factors, including:
- the victim’s medical records,
- the likely amount of the worker’s future medical bills,
- whether the worker has reached maximum medical improvement (MMI),
- the likelihood of career advancement, and
- the worker’s salary or wage.
The costs of future medical care can be difficult to determine, especially for catastrophic injuries. Establishing an attorney-client relationship with a workers’ compensation attorney from a reputable law firm is the best way to understand the true value of your case and how much compensation you will need in the future.
What happens at the trial?
Each state has its own workers’ compensation system. However, most have the initial trial or workers’ comp hearing in front of a magistrate judge, rather than in a formal courtroom setting. At this hearing, the magistrate will hear evidence from the victim as well as from the employer’s insurance company. That evidence generally takes the following forms:
- witness testimony by coworkers who saw what happened on the date of the injury,
- testimony by doctors who treated the injured worker,
- medical records,
- expert testimony by vocational experts, and
- other testimony by pertinent figures, like the worker’s boss or supervisor.
The evidence can be presented in live testimony under oath, or through depositions that were recorded by a court reporter. The trial can take as little as a few hours or as long as a few days.
After hearing evidence for and against awarding any disability benefits allowed under the state’s workers’ compensation law, the magistrate will issue his or her decision.
In many states, the magistrate’s ruling can be appealed several times, to the:
- workers’ compensation appeals board,
- state trial court,
- state appellate court and, finally,
- state supreme court.
What are the pros and cons of taking a workers’ comp case to trial?
There are benefits and drawbacks to taking a workers’ compensation claim all the way to trial. Some of the benefits include:
- the potential for a full recovery, and
- knowing the final value of your claim.
Some of the drawbacks include:
- a longer claims process,
- the additional stress of taking a claim to court,
- the potential for recovering less in workers’ comp benefits than was proposed in a settlement offer, and
- increased strain with the victim’s employer.
However, some of these drawbacks are not present in some cases. For example, when victims accept a compromise and release settlement, they may not be allowed to return to work with the same employer. Their future medical care would have been covered with the lump sum payment. If the worker subsequently aggravates the injury, the workers’ compensation insurer may find itself paying for that future medical care, all over again. For this reason, many insurers require the injured worker to get a new job in order to finalize a compromise and release settlement.
The best way to make an informed decision is to get the legal advice of an experienced workers’ comp attorney.
- See, e.g., Missouri Department of Labor and Industrial Relations, “If Your Case Goes to Trial.”
- State of Illinois Workers’ Compensation Commission, “Fiscal Year 2020 – Annual Report.”
- Michigan Department of Labor & Economic Opportunity, Workers’ Disability Compensation Agency, “2021 Annual Report.”