Workers’ compensation litigation begins when either an injured worker files a petition seeking benefits, or an employer files a petition seeking to reduce or end its liability to an injured worker. Since 2006, every case in which a petition has been filed must be scheduled for mandatory mediation unless the presiding judge deems mediation to be futile. Now that the Office of Adjudication is strictly applying the requirement for mediation, the landscape for Pennsylvania workers’ compensation has changed dramatically because a record number of cases are settling for lump sums. Before 1996, such settlements were not even possible. The legal practice of workers’ compensation must now adapt to the changing landscape. Both sides of these cases must update their practice strategies to keep pace with the changes, from posturing a case for settling from its inception to managing a caseload that is no longer predicated on serial litigation.
Prior to the implementation of Act 57 in 1996, workers’ compensation cases could be commuted — a quasi-settlement that enabled an employer to offer a lump sum, in exchange for the claimant waiving entitlement to future wage loss benefits. Although it was implied that the employer was no longer responsible for medical expenses, the employer remained legally responsible. Act 57 created the Compromise and Release Agreement (Section 449 of the Workers’ Compensation Act), which allowed the parties to sever all future entitlement to benefits under the Workers’ Compensation Act.
