Court of Appeals Revises Board View on Structured Settlements

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The Board can no longer reject structured settlements of claimants who are represented by an attorney on grounds that the settlement is not in the best interests of the claimant.  The Court of Appeals decided that the statute adopting structured settlements does not allow the Board to take the best interests of the claimant into consideration when deciding whether to approve or reject a structured settlement when the claimant is represented by counsel.  The Court explained that the statute is not ambiguous.  The legislature created a “rational scheme.” It provides additional protection for claimants who are not represented by allowing the Board to determine if the settlement is in their best interests.  However, when claimants are represented, they are allowed to make their own determination of whether the settlement is in their best interests.  The Board cannot interfere.

Furthermore, the Court of Appeals stated that the Board’s regulation that sets forth the factors that must be included in each CRSSA (Compromise and Release Structured Settlement Agreement) exceeds the bounds of the statute.  The Board’s regulation, WAC 263-12-052(6)-(9), includes criteria designed to address whether the settlement is in the best interest of every claimant.  The Board cannot request that information for represented claimants.  The only inquiries that the Board can make when a claimant is represented are the five defects enumerated in the statute which do not include “best interests.”

This decision could result in the filing and approval of many more CRSSAs.  Upon approval of a CRSSA, the claimant may reopen the claim for medical benefits only and cannot receive monetary compensation such as time loss compensation, permanent partial impairment awards or permanent total disability compensation. Employers should still consider whether a CRSSA is the best option in every situation because other alternatives exist for resolving claims.

 

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