What’s the Difference Between a Stipulation and a Compromise & Release?
There are essentially two types of workers’ compensation settlements: a Stipulated Finding and Award or “Stipulation,” and a Compromise & Release.
Stipulation
When a workers’ compensation claim is settled by Stipulation, the employer and employee agree on the specifics of the industrial injuries, including which parts of the body are affected and the amounts of permanent or temporary disability payments (usually disbursed bi-weekly in most states). The agreement also covers ongoing medical claims related to the injury, which will be paid if needed and as approved by designated personnel.
The main benefit of a Stipulation agreement is that it allows both parties to reach a settlement without the need for a court hearing or trial. According to MyAttorneyHome.com, this voluntary agreement can help avoid lengthy legal proceedings.
In many states, such as California, a Stipulation also allows an injured worker to:
- Reopen their case at a later date,
- Follow up on the initial Stipulated award with another one, or
- Request a Compromise & Release at a later date.
A Stipulation may also impose certain conditions on the injured worker for continuing compensation. Violating these conditions can be costly. For example, a workers’ request for reimbursement for a necessary back surgery was denied by a Florida appellate court in January 2022 because the surgery did not meet the terms of the Stipulation agreement. The city of Hialeah had accepted liability and agreed to cover medical expenses, but the Stipulation required prior approval from the city’s doctor. The firefighter underwent spinal fusion surgery without such approval and was denied reimbursement, with the appellate court upholding the decision.
Compromise & Release
Under a Compromise & Release (often referred to as a “C&R”), the injured worker and employer/insurance company agree on a lump sum settlement to resolve the entire case. This settlement is calculated based on future permanent or temporary injury payouts and typically includes an estimate for all future medical treatment. Upon payment of the lump sum, the insurance company is absolved of any future liabilities related to the case.
These definitions provide a broad overview, and the specifics can vary depending on state workers’ compensation regulations and individual circumstances. Workers’ compensation claimants often seek counsel from experienced attorneys to determine whether a Stipulation or Compromise & Release is the best option for their situation.
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