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What is compromise and release?

On behalf of Mitchell Law Corporation
January 11, 2021

If you sustain a work-related injury in California, you generally have two options for receiving your benefits. The first is Stipulated Findings and Award. The second is Compromise and Release.

The first option allows you to request periodic reviews to determine your ongoing or enhanced need for benefits. According to the State of California, Department of Industrial Relations, Division of Workers’ Compensation, a compromise and release agreement is a settlement agreement that effectively closes all aspects of your workers’ comp claim. You receive one lump payment and cannot request more, even if it turns out you need more.

Advantages of a compromise and release

Though a lawyer can advise you on the best course of action upon approval of your workers’ comp claim, know that there are distinct advantages to option number two. The top advantages are as follows:

  • A compromise and release agreement protects your future interests. If your employer or the insurer dispute the claim after you reach an agreement, you can have peace of mind that you will still receive the agreed-upon amount rather than risk receiving less or nothing in the future.
  • The insurer may agree to pay you more money now to avoid the risk of having to pay you even more in the future.
  • You will receive your benefits in one lump sum as opposed to in periodic payments over the course of several months or years.

Disadvantages of compromise and release

Compromise and release agreements do come with a few downfalls. The most significant pitfall is your inability to collect additional benefits should your condition worsen, as once you sign a compromise and release, you release your employer from all future liability. If you die as a result of your injury, your loved ones cannot collect benefits as a result of this release as well.

The second disadvantage is the fact that a compromise and release is legally binding once a judge approves it. A judge will not set aside this type of agreement save for in select few (and rare) circumstances.

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