Workers Compensation Settlement Procedure in Virginia—Not So Fast

What is the settlement process for Workers Compensation cases in Virginia?

Unlike a personal injury car crash case, Workers Compensation cases in Virginia require several steps before any settlement money is paid out to the claimant or his/her counsel. In a car crash case, usually a call from the injured victim’s lawyer to the insurance company (or his/her defense counsel) results in a Release and a check being sent within a week or two. Not so with a Virginia Workers Compensation case, but this is for the protection of the injured worker.

In order to settle a comp claim, the Virginia Workers’ Compensation Commission must have a correctly drafted set of documents, signed by the parties, notarized and submitted with current medical and other evidence. The required document package for the compromise­, or the settlement, of a Virginia compensation case includes the PETITION, ORDER, AFFIDAVIT and claimant’s counsel’s CONFIDENTIAL COVER LETTER to the Deputy Commissioner, or judge. While the first three documents are seen by the insurance company and their lawyers, the “Confidential Cover Letter” is not shared with the other side or party.

At the end of the Confidential Cover letter, there are two items that need to be addressed and filled in by our client. These responses inform the Virginia Workers’ Compensation Deputy Commissioner how the injured worker intends to use the proceeds of his/her settlement. There is no requirement for this, but if the settlement monies are used to pay off debt, for education, for job re-training, for improved transportation, for business opportunities, etc., the Deputy Commissioners look more favorably upon the compromise settlement than if the disabled worker writes that he/she wants to buy a flashy car or a tricked-out motorcycle.

After the judge has reviewed the fully executed paperwork, the injured worker’s file and checked the math, he/she signs it and has it stamped by the Clerk of the Commission. Generally, when we settle, there is no necessity for a full Hearing in court. All settlements must be approved by the Virginia Workers’ Compensation Commission before any monies are paid. The judge determines the attorney’s fees, which are usually 20% of the gross recovery in our experience.  Neither side can force the other to settle and the amounts are quite modest as Virginia comp benefits are limited.

Settlements are considered voluntary compromises of Virginia workers compensation claims. In other words, the insurance company cannot force the injured worker to settle and the disabled employee cannot make the insurance company pay them settlement money.

The process from when the judge receives the fully completed paperwork to the time that the judge approves and sends it out takes somewhere from 3 to 8 weeks. The injured worker (or his/her family in fatal accident cases) will receive a copy of the ORDER when it is approved directly from the Virginia Workers Compensation Commission.  At Abrams Landau, we receive the stamped Final Order some time later.

From the instructions on the Settlement Order, the insurance company knows how much to pay directly to the injured worker (or his/her family in fatality cases) and how much to reimburse Abrams Landau for the expenses they have paid for their client’s case and the approved attorney fees. The insurance company has a “reasonable time” to make payment to the claimant after the Settlement Order is endorsed by the judge. Weekly compensation benefits can then stop, BUT if the insurance company is very late sending the net settlement check to the injured worker (or his/her family), then the VWC can order the insurer to pay a 20% penalty.

That is why Doug Landau advises clients and their families to save the envelope the settlement check comes in weeks after they get the approved Settlement Order. “You can put any date you want on a check. You can alter the date the postage machine places on the envelope. BUT, the other side cannot hide the date stamped on the envelope by the U. S. Postal Service. If that date shows the settlement check was sent late, THEN we can ask for penalties, with the envelope’s water mark as ‘Exhibit A’!”

If you or someone you care for has questions about Virginia Workers’ Compensation, the settlement of a workplace accident case or fatal injury on the job, give us a call (703-796-9555) or email us at Abrams Landau, Ltd.