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Workers’ Comp Fundamentals: Settling a Claim in South Carolina

Matthew Riddle

Although we typically use our blog to report news and developments in SC Workers’ Compensation Law, from time to time it helps to get back to basics.  We hope our “Workers’ Comp Fundamentals” series will be useful as a learning tool for those who are relatively new to the world of workers’ compensation, while providing a good refresher for the more “seasoned” practitioners among us. In today’s entry we will review the different types of settlements available for SC claims.

There are two basic types of settlements for a workers’ compensation claim in South Carolina: a Form 16A or a “clincher” agreement.  A Form 16A provides for any further medical treatment recommended by the treating physician, and allows one year in which the claimant may file a change of condition claim for additional benefits.  Clincher agreements, on the other hand, typically close out all further benefits; however, a claim may also be resolved with an indemnity only clincher that provides for ongoing medical treatment.  Determining the appropriate option requires weighing the complexities of each claim and deciding which type of settlement best serves the parties’ interests.

When considering whether to settle a claim under a clincher or Form 16A, the employer/carrier should consider whether it is worth additional money to close out the medical aspect of the claim and to resolve the indemnity.  Typically, a claimant or the claimant’s counsel will demand more money if the settlement resolves all issues.  This type of settlement likely appeals to a claimant who has completed his or her treatment or to a claimant who is simply interested in greater financial compensation to resolve the claim.  The employer/carrier of course prefers the clincher agreement because it provides assurance that the claim will be resolved in its entirety.

On the other hand, an advantage to a Form 16A settlement is that it can be approved at an informal conference without the necessity of involving an attorney.  An informal conference is normally scheduled for uncontested cases where the sole issue before a deputy commissioner is the amount of disfigurement or the amount of permanent partial disability.  This is a very informal proceeding and no testimony is actually taken.  An informal conference can be requested by either party and is normally set up once a doctor has rated and released a claimant.  We typically recommend settling a claim at an informal conference where the claimant still works for the same employer and is not represented by an attorney.  The employer/carrier may file a Form 18 to request an informal conference.  A Form 14B completed by the authorized treating physician must also be included with the informal conference request.  The Form 14B provides detailed information regarding medical impairment, work restrictions, and future medical treatment.  This form is very important because claimant’s entitlement to future medical treatment will be limited to that which is specifically set forth on the Form 14B.  For instance, if the treating physician states that no future medical treatment is required, the claimant will not be entitled to any further medical treatment unless he proves a compensable change of condition.

At the conference, a deputy commissioner will view the claimant, review the Form 14B, and explain to the claimant his rights.  The deputy commissioner will then listen to the terms of the employer/carrier’s proposed settlement offer and decide whether or not he will recommend the proposed settlement to the Commission for approval.  (Note this procedure recently changed.  In years past, the deputy commissioner would recommend the settlement terms and the parties would have to decide whether they agreed).  If the claimant agrees with the employer/carrier’s offer, and the deputy commissioner finds the terms suitable under the law, the parties will complete and sign the Form 16A and the deputy commissioner will submit it to the Commission for approval.  Lately, we have seen the Commission become more strict in its requirements regarding the information on the Form 14B Physician’s Statement and the amount of PPD agreed to by the parties.  For example, the Commission now absolutely requires regional impairment ratings relative to certain injuries; i.e. they will not accept a doctor’s impairment rating to the “arm” in the context of a shoulder injury.  Additionally, the Commission seems to be requiring higher PPD offers than they have in the past.   If the parties do not reach an agreement at the informal conference, the deputy commissioner will set the case for a full evidentiary hearing.  The hearing will then be scheduled within the next several months and will be handled by the next jurisdictional commissioner.

If the claimant is not able to return to work with the employer with whom he was injured, a clincher settlement is usually in the best interest of the employer/carrier so that there will be no future exposure on the case.  An employer/carrier is required to refer the file to a defense attorney in order to draft the clincher agreement and submit it to the Commissioner for approval.  If the Claimant is not represented by an attorney, a clincher conference is required with a Commissioner in order for the settlement to be approved.  We have recently seen the Commission, or at least certain Commissioners, review these agreements with much more scrutiny when it comes to closing out future medical treatment with unrepresented claimants, particularly when there is surgical hardware or other prosthetics involved.  If the Commission does not approve a clincher agreement with an unrepresented claimant, the case is set for a hearing.

If the claimant is represented by an attorney, a clincher conference is not required.  The paperwork can simply be signed and submitted for filing.  These agreements are essentially “rubber stamped” and returned to the parties.

After payment of a permanent disability award or settlement, the employer/carrier submits a Form 19 signed by the claimant.  The Form 19 is a compensation receipt, documenting the claimant has received the funds to which he is entitled.  Generally speaking, the Commission requires that this form be submitted before it will close its file.  If the Commission file is not closed, the employer/carrier will remain under an obligation to file periodic Form 18 reports and will receive fines if these reports are not timely submitted.

Please do not hesitate to contact us if you have any questions about settling your SC claims either on a clincher or Form 16A.