Workers' Compensation Settlement Agreements
The Workers' Compensation Act requires settlement agreements to be reviewed and approved by an Administrative Law Judge (ALJ). This applies both to cases that are currently in the hearing process and to claims where no hearing application has been filed. There are two types of settlements: disputed validity/compromise and commutation.
A "disputed validity" or compromise settlement must involve a real controversy between the parties regarding the compensability of a claim, in whole or in part. Settlement of these disputed claims allows the parties to assess the strengths and weaknesses of their respective positions and then strike a compromise in order to avoid the risk, expense and delay of further adjudication.
A "commutation agreement" involves very different considerations. Here, the injured worker's right to benefits has been established and is no longer in doubt. The only question before the ALJ is whether the parties should be allowed to substitute their own method of paying those benefits for the payment provisions otherwise required by the Utah Workers' Compensation Act.
Recently, the Adjudication Division developed model forms for both disputed validity (compromise) and commutations agreements. Use of these forms is not mandatory.
Follow the links below for more information about how settlement agreements are evaluated by the ALJs and read the Commission's letter outlining the public policy behind settlement agreements
Attorney's Information Sheet - Settlement Agreements
Information for Injured Workers' Regarding Settlement Agreements
Compromise Agreement Form
Commutation Agreement Form
Letter from Commission Regarding Agreements(7/22/2008)
Utah Code 34A-2-420
Administrative Rule on Settlement Agreements
Duty Judge Letter (July 6, 2009)