I recently had a phone call from an injured worker. He had actually already settled his workers’ compensation case, but wanted to sue Gallagher Bassett. He is also on social security and said that the insurance company did something in the contract that caused him to lose six years of benefits.
I had some thoughts right away:
- The first was that you can not sue the insurance company. It is not their job or that of their lawyer to look out for you.
- The person who should look out for you, other than you looking out for yourself, is your lawyer.
- Based on what this person described, I assumed he would need a legal malpractice attorney.
But then I looked his case up and discovered that he represented himself on what was a very serious injury. And that explained a lot.
Link to Spread Language and Illinois Work Comp Settlements Spread Language and Illinois Work Comp Settlements
When you settle a workers’ compensation case and either are on social security disability or you anticipate you might be, the social security administration looks at your settlement as income. As a result, it can greatly reduce your social security benefits. That is what happened to the person who called me.
The way an experienced Illinois workers’ compensation attorney protects their clients is by adding something called spread language to the settlement contract.
What spread language does is take your life expectancy and have the contract reflect that the payment is being spread out over your life expectancy. You still get the settlement in a lump sum, it just greatly reduces how the Government views it and in most cases will only cause your social security to go down by a very low amount.
If this person had hired an attorney and they did not do this, it would likely be an Illinois legal malpractice lawsuit. I have seen that happen on other cases, but it did not happen here. As a result, not having a lawyer cost him a lot of money.
To make matters worse, my quick assessment of his case was that it was probably worth more than $200,000 than he got. In other words, even with a 20% lawyer fee, which would have actually been less as the fee would be capped, he would have netted way more money.
It is a sad case all around and one that could have been avoided. The only hope now is that the insurance company would be willing to re-write the settlement contracts. That is not likely.
If you have a large money settlement or might be or are on social security, make sure that spread language is part of the contract. The insurance company will never fight it and it will protect you and save you money.