Determining A Fair Settlement Under Your Defense Base Act Benefits
Filing a Defense Base Act (DBA) claim can be a long and arduous process. From making sure you make the deadlines to keeping all the right documents, it can get complicated. Furthermore, it can get complicated if insurers deny your claim but you still pursue your rights in litigation. Through all of this, the biggest question on many contractors and subcontractors covered under the Defense Base Act is whether they will receive their full benefits.
While filing a claim has a process, so does the settlement. Even once the settlement is agreed upon by both parties, it must still be approved by the Department of Labor (DOL) before you receive the money. This is because the DOL wants to make sure that the settlement is fair and just to you, as the injured claimant.
But, before the settlement is agreed upon and, even before you head into negotiations with your Defense Base Act insurance carrier, you probably should know how much to ask for in the settlement. You need to ensure you’re asking for and getting a fair and just settlement.
So, how do you know how much to ask for and, more importantly, what is a fair settlement? The simple answer is that it just depends on various factors since each case and client are different. However, there are some tips that can guide you in determining the fairness of your DBA settlement.
Calculating Your Settlement
Since the DBA does not compensate you for your “pain and suffering” you need to focus on your financial losses resulting from the injury. The insurance company will fight you on most, if not all of the losses you suffer, so it’s important to try to calculate a fair settlement ahead of negotiations so that you know what an unfair settlement looks like.
- Medical expenses, paid and unpaid
- Future medical expenses (will you require further treatment?)
- Lost wages – past and future
- Prolonged or total disability and your ability to work
The medical and compensation benefits you may be entitled to are all based on past and current physical, emotional and mental status and whether you’ll make a full recovery or having ongoing problems like PTSD. A fair settlement must also include your specific disabilities like the inability to use certain body parts and how it affects both your daily life and work life. Will you be able to perform the same duties at work? Will you be able to return to work at all and when? If you can’t return to the same work, what work can you perform and how accessible are those jobs? Is your disability permanent and partial, or permanent and total? You’ll know this information from your doctor and medical visits on just how your injury will affect you in terms of any disability (inability to earn wages).
Medical costs need to include both paid and unpaid, as well as any likely future medical treatment. At this point, it’s important to think about how your injury has really affected you physically, emotionally and psychologically as this could require treatment in the future. Medical costs also include any prescriptions, both past and future. Again, the cost of past and future medical care will depend on what your doctor says about the treatment you will need.
When determining lost wages, you need to calculate this carefully as any mistake in your average weekly wage, involving only a few dollars a week, can be a huge loss of income over the years. Determining the proper average weekly wage (AWW) and corresponding weekly compensation rate (2/3 of your AWW) is critically important to projecting your future compensation benefits and how much you should accept to settle those benefits. There is much debate about the proper method for calculating AWW and weekly compensation rates in DBA claims since the insurance carrier wants to keep your compensation rate as low as possible. For this reason, there have been many decisions by judges on calculating the AWW. Unless you are an attorney, you probably won’t know these cases and the nuances in the case law to determine whether the insurance carrier has calculated the AWW correctly.
Even in cases where the injured worker has an attorney, there may still be disputes since this is a hotly debated and contested issue in DBA claims. For instance, some insurance carriers do not include bonuses in calculating the AWW. In other instances, you may not have worked the entire 52 weeks before the injury and the carrier will use the wrong divisor to artificially lower your AWW. So, before you can determine a fair settlement of your future weekly compensation claim, you need to assure that the AWW is correct. This will likely require specific analysis by an experienced Defense Base Act attorney.
Once you’ve calculated the Average Weekly Wage (AWW), your weekly compensation rate will be 2/3 of your AWW. However, you should be aware that the DBA and DOL impose a maximum on the amount of compensation you can receive on a weekly basis under your DBA coverage, no matter how high your AWW may be. Your weekly compensation rate should be paid so long as you are disabled from work. This is in addition to your medical expenses. The compensation benefits are intended to compensate you for lost wages (economic loss) due to injury, whether short-term, prolonged, or total and permanent. For example, Covered employees and government contractors receive two-thirds of their average weekly earnings, subject to the maximum rate in place at the time of injury. As of today, the maximum weekly compensation rate is $1,510.76 per week.
Once we determine the correct AWW and compensation rate, and your doctors tell us about your disability status (past and future), it is usually a matter of mathematics to determine the future compensation you would receive assuming you live to your life expectancy. Even then, we would need to reduce that future stream of compensation payments to “present value” due to the time value of money.
A Fair Settlement According To The DOL
Once you and the insurance carrier decide that the negotiated settlement is fair, it goes through the process of being evaluated by the DOL. The DOL published in 2014 how it evaluates settlements before approving them when it comes to requesting compensation under the Longshore and Harbor Workers’ Compensation Act and, subsequently, the Defense Base Act. In LHWCA Bulletin No. 14-05, the DOL makes clear the following must be present in order for the settlement to be approved.
- Your settlement must include a clear amount for compensation, medical, and attorney fees.
- The reason for the settlement must also be clear.
- You must also give your biographical information and work history, as well as whether you can work, are capable of working, or when you medically can return to work.
- Your medical report of the injury (which you should already have from filing the claim) must be given to the DOL.
- If you’re requesting medical benefits be reimbursed or paid for through your claim, you must present an itemized bill of all medical expenses.
When the DOL receives all the necessary information to evaluate the settlement, they also take into account your age, education, work history, and degree of disability or impairment. Even if you cannot carry on the same kind of work you did before you were injured, the DOL will consider any and all available work that you can do. They will also weigh the cost of current and future necessary medical treatment for the injury you received as a government contractor working overseas. Furthermore, the DOL considers your life expectancy using life tables and actuarial science to determine the value of the claim.
Fighting For Your Defense Base Act Benefits
While it is difficult to put a dollar value on your pain and suffering caused by an injury, it is important to remember that pain and suffering are not considered when determining what is a fair settlement of a DBA claim. The DBA only provides compensation on a weekly basis while you are unable to work, and medical expenses. So, determining the correctly weekly compensation rate becomes crucial and depends on your Average Weekly Wage. Once we determine the correct AWW, we must consider your disability. Only then can you calculate your past due compensation and future compensation payments, arriving at a fair settlement.
At Moschetta Law, we believe the sacrifices you made to work on behalf of the U.S. government overseas, often in a dangerous situation, deserve fair and just compensation. We will work hard to fight for you and protect your benefits. As attorneys that specialize in Defense Base Act cases, we can be your guide in filing a claim and receiving your due benefits. Contact us today for a free consultation.