Section 8(i) provides the requirements for the settlement of claims under the Act. Section 8(i) is the only means for compromising an employer’s obligation to pay benefits under the Act, creating an exception to Section 15(b), which states, “No agreement by an employee to waive his right to compensation under this Act shall be valid,” 33 U.S.C. §915(b). So, what does this mean in practice?
The important thing to note is that employees are waiving away their rights when they accept to settle their claim. If employees win their claim under the Defense Base Act, they may be eligible to receive benefits for the rest of their lives. Let’s discuss this by making up an example case: say we have Claimant from Kosovo, North Macedonia or Bosnia and he suffers from PTSD as a result of his exposure to traumatic events while working as a government contractor overseas. He is 35 years old and his Average Weekly Wage (AWW) overseas was 900 USD. Under the Act, he has a right to receive 2/3 of his AWW while he is disabled, up to maximum of 1560.08 USD/week per 2020 fiscal year rate. Now let’s do some math here: in our example, AWW is 900 USD, 66% or 2/3 of 900 is 594 x 4 weeks comes to approximately 2376.00 USD/Month). 2376 x 12 months is 28,512.00 USD/Year. Now, we need to figure out life expectancy for certain countries, for example in North Macedonia, life expectancy for males is 74.26 years, which exposes Insurance Carrier to almost 40 years of paying disability benefits. Multiply 40 with $28,512 and whoa, we are exactly at $1,140,480 USD. That is the potential exposure Insurance Carrier is looking at and this is without medical expenses, medications, mileage reimbursement.
That said, Insurance Carrier and their attorneys sit down before they make their settlement offer and run pretty much the same numbers. For these reasons, Claimants need a competent attorney to discuss their options and if a settlement offer is not satisfactory and Claimant has solid medical documentation, there is no reason not to proceed with arguing claim before Administrative Law Judge, Benefits Review Board or Federal Court. The Act is clear and says that settlement must not be inadequate or procured by duress.
Another important thing is that Section 702.241(g) provides that a settlement agreement is limited to the rights of the parties and to claims in existence at the time of the settlement. This is very important since there may be provision within settlement that Claimant agrees to waive “Any and all claims” or “any and all accidents/injuries” or injuries/conditions that are unknown to the Claimant. Such a “global release clause” implies that, for example, a subsequent death claim would be settled by approval of the underlying inter-vivos injury claim. This is one key reason Claimants should discuss the specific terms of a settlement with their attorney before signing anything, see Poole v. Ingalls Shipbuilding, Inc., 27 BRBS 230 (1993), Clark v. Newport News Shipbuilding & Dry Dock Co., 33 BRBS 121 (1999) (McGranery, J., concurring).
