My name is Matt Eason. I’ve been practicing personal injury and workers’ compensation for 25 years, and we receive a question the other day asking, “What’s the difference between compensation and reward in a workers’ compensation case?”
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To answer that question, I think I want to clarify what the author of the question was really trying to ask. It’s not what is the difference between compensation and reward, but rather what is the difference between a compromise and release in a workers’ compensation case contrasted with a stipulation and award in a workers’ compensation case.
To answer that question, I think I want to clarify what the author of the question was really trying to ask. It’s not what is the difference in compensation and reward, but rather what is the difference between a compromise and release in a workers compensation case contrasted with a stipulation and award in a workers’ compensation case.
A stipulation and award isn’t technically a settlement of the compensation case. Rather it’s an agreement between the employee and the insurance company or their attorneys as it would be as to what the value of the case would be and as to what a workers’ compensation judge would have award had it gone to trial. So you stipulate to an award of the workers’ compensation judge. That award then becomes binding on the parties, and the rights and remedies occur from that.
One of the benefits of a stipulation and award is that you still have ongoing rights to continued medical care related to your injury. Likewise, should your injury get worse within five years of the original date of injury, you can go back and potentially reopen your case to increase the stipulation and award amount.
In contrast to the stipulation and award, there is a compromise and release. A compromise and release are analogous to a settlement agreement and very similar to settlement agreements that you would see in a personal injury or employment law case.
In a compromise and release, basically, you wrap up all of your rights, past, present, and future, into one single document, typically one single payment, and then you have no benefits going forward. So if your claims get worse, you do not get to come back for more money. The flip side of that, though, is that your future medical care, hopefully, was part of that compromise and release, so you’re no longer at the mercy of the work comp system and the work comp adjusters to get your medical care. Instead, you can self procure your own medical care or get it through other resources and take that system out of play.
One frustration that comes up in the workers’ compensation system is that we have clients who say they want to enter into a compromise and release but not a stipulation and award. That’s a particularly delicate question in that, yes, a lot of situations lend themselves to compromise and release, and compromise and release will be better for the clients. Unfortunately, the law cannot force an insurance company to do a compromise release. It can only force an award, and as a result, the stipulation and award is one vehicle or going to trial is the other vehicle. The compromise and release is a voluntary thing that some insurance companies will refuse to do.
If you’ve been presented an offer to resolve your case, you don’t understand if it’s a stipulation and award or compromise and release, or if the amount that they are offering to pay you is appropriate. I hope you’ll consider reaching out to myself or one of the other Sacramento workers compensation lawyers in my firm. My name is Matt Eason. I’m with the law firm of Eason & Tambornini.
