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Settling case? Double-check the dollar amount

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Alert for employers settling workers’ comp lawsuits—or any other kind: When negotiations are completed, make sure the dollar amount written into the agreement is the one everyone agreed to!

If it turns out the settlement documents contain the wrong figure, you might be able to challenge it. But it’s just as likely a court will hold you to the figure and order you to pay attorneys’ fees to the other side.

The simple legal truth is that a contract is formed when the parties have agreed to all the essential terms. That means that even if you don’t end up signing the written agreement, the contract is a done deal.

If the settlement amount is wrong, you’ll need solid evidence to back you up—contemporaneous notes, an e-mail between the parties sent right after the agreement or some other indication of what you agreed to during the settlement negotiation.

Recent case:
Scott Chaisson injured his knee while working on power lines after a severe snowstorm. With several feet of snow on the ground, he failed to see a large hole and fell into it. He was unable to return to his job and will probably need knee replacement surgery down the line.

The workers’ compensation carrier began negotiating a settlement, and Chaisson wanted more than $100,000. An insurance adjuster later claimed the settlement agreement they reached was around $25,000. Chaisson said it was $97,500. Somehow, that figure went to the carrier’s attorneys, who prepared the contract and sent it to Chaisson. After Chaisson signed it, the adjuster said the settlement amount was wrong.

Too bad. The court believed Chaisson, noting that the adjuster didn’t have any notes to back up her claim. (Chaisson v. Simpson, No. COA08-704, North Carolina Court of Appeals, 2009)

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