We are in the process of representing an individual who was seriously injured on the job. He has had two back surgeries, and he is 72 years of age. He has been deemed 100% disabled, and we are trying to resolve his case. There is no question about whether or not his employer is responsible for compensating him under the Alabama Workers Compensation Act, so what is the issue?
Well, in Alabama, the employer (really, the employer’s insurance company) can try to settle the case or force you to go to court to prove your case. If the insurance company settles your case, they typically pay the settlement in a lump sum amount. If you try the case to a verdict and win, the insurance company can choose to pay the employee weekly or in a lump sum. Usually, they will choose the weekly option because they will benefit if the employee dies before the payout is complete.
What about our situation? What would our client be entitled to in a lump sum? Approximately $170,000.00. What has the insurance company offered? $85,000.00. Why? Money. It is all about the bottom line for the insurance company, and they understand that we, as the employee’s attorney, have no leverage to force them to do otherwise.
Why would our client accept a lump sum for less than $170,000? Several reasons. First, he can get a lump sum and know what he has. Second, if he were to die, he knows that his wife will receive something; whereas, if he died during the weekly payments, the payments stop immediately. Third, he doesn’t have to try his case to a judge (you cannot get a jury in a workers comp case) and risk the judge thinking he’s less than 100% disabled which would dramatically reduce his compensation. Finally, he can incorporate language for Social Security Disability which minimizes the effect on any set off Social Security would get if he received weekly payments.
Why wouldn’t the insurance company pay the full value of the lump sum? They have no incentive. They have nothing to lose. If they don’t pay it, what happens? They hire an attorney to defend the case. If the attorney wins or gets less than 100% disability, they don’t have to pay as much. If they lose the case, they only have to pay the weekly benefits, and if our client were to die, they win. The only way the insurance company loses is if our client lives beyond his life expectancy, and the insurance company has to keep paying his weekly benefits. That is how the insurance company evaluates the claim: what is the likelihood that our client will live beyond his life expectancy. In their mind, our client is just another number, not a human being who is going to have a difficult time supporting his family because of his injury.
There should be some consequence to the insurance company and employer if they force the employee to try the case to a verdict, and the employee wins – at least in a 100% disability case. These types of cases are serious, and the individuals who have been injured have very little recourse and will have a difficult time the rest of their lives. This is their only chance at compensation, and the insurance companies hold their feet to the fire. It is time the employees could fight back and not be forced into settlement situations.
What do you think?