To the injured worker, putting a dollar value on the permanent loss of bodily function can be a tough, jagged pill to swallow. One frequently asked question by our clients and other injured workers in California is, “why is my case worth so little?” For example, a horribly disabling back injury that causes chronic pain and loss of normal functioning is often rated around 10-13% whole person impairment. Depending on age and occupation, this number may adjust upwards or downwards when converted to permanent disability but the end result is usually the attorney having to explain, “the permanent disability in your case is worth about $13,000.”
“How?” “Why?” “I cannot do the same work that I used to do.” “I cannot live life the way that I used to live.” “Are you saying my life is only worth $13,000?”
Obviously, all life is worth more than $13,000, but to the California Workers’ Compensation system the law is mechanical and is guided by the AMA Guides to the Evaluation of Permanent Impairment, Fifth Edition. This is the “bible” to the doctors in the workers’ compensation system. There is a chapter for nearly every part of the body, guiding the doctor on how to rate the impairment. The doctor, if favorable to the injured worker, can be creative and apply what is known as an “Almaraz-Guzman” analysis to get to a higher rating than strict application of the guides by making an argument by analogy to a more appropriate chapter.
One must remember that the remedies available in this benefits delivery system are largely three-fold: temporary disability (for wage loss while off work for up to two years max), permanent disability (discussed above), and future medical care to treat the body parts at issue that are accepted as industrially injured. The total value of a case should take in to account these three major benefits.
If a “stipulated award” is chosen over a “compromise and release”, then the award will pay out the value of the permanent disability at a weekly rate until paid out in full, and future medical care subject to the same rules and limitations as during the case (utilization review, workers’ comp doctors, etc). On the other hand, a compromise and release will payout in one lump sum the agreed-upon value of the case as a whole, buying out the right to future medical care.
While the system and attorneys might not make a lot of sense when negotiating settlements, they are the experts in the field and know what a realistic outcome can be or should be. Ultimately, it is up to the client after receiving the advice of counsel on what they want to do: cash out with a settlement or stipulate to a workers’ compensation award of permanent disability payout at a weekly rate and future medical care through the workers’ compensation system.