A Guide to Stipulation Agreements in Colorado Workers’ Comp Settlements
What Colorado workers need to know about workers’ comp stipulation agreements
If you’ve been seriously hurt on the job in Colorado, you may be thinking about settling your workers’ comp claim so you can finally move on. But before you agree to anything, it’s important to understand what you’re signing—and what you might be giving up.
One of the tools used to settle part of a workers’ compensation claim is something called a stipulation agreement. These legal agreements can be a good way to resolve disputes or wrap up your claim, but only if the terms truly protect your future.
In this article, we’ll explain what stipulation agreements are, when they’re used, and why it’s crucial to understand the fine print—especially if you’re considering leaving your medical benefits open.
If you’re considering taking a workers’ comp settlement and want help understanding it or negotiating a better deal, contact Babcock Tucker to schedule a free consultation.
Our experienced Denver workers’ compensation attorneys can advocate on your behalf and make sure that no money is left on the table.
What is a stipulation agreement?
A stipulation agreement in a Colorado workers’ compensation case is a written document where both the injured worker and the insurance company agree on specific terms or aspects of a claim. It typically determines aspects of your workers’ compensation benefits that include the amount of wage loss benefits owed, the degree of permanent impairment, and how future benefits will be handled.
Once both parties sign the stipulation and it’s approved by an administrative law judge (ALJ) or the Division of Workers’ Compensation (DOWC), it becomes legally binding.
When Will Workers’ Comp Offer a Settlement?
Understand when workers’ comp settlements are typically offered and how they impact your right to future benefits in Colorado.
When is a stipulation agreement typically used in a workers’ comp claim?
Stipulation agreements are typically used when the injured worker and the insurance company can agree on some parts of the claim but want to keep other areas open for further discussion, development, or future needs. This allows partial resolution without forcing either party to settle every issue at once.
In other words, this legally binding document sets forth specific terms that have already been acknowledged and agreed upon, but it allows for uncertainty about a medical condition’s prognosis or future treatment needs.
Some common reasons a stipulation agreement might be used in a workers’ comp claim include:
- Agreement on impairment rating, but not on vocational rehabilitation. Your level of permanent impairment could be undisputed, but it’s unclear to what extent you’ll be able to return to your previous job, if at all. A stipulation agreement might set forth an agreed-upon impairment rating but leaves open the possibility of job retraining at a later time.
- Settlement of past and future wage loss, but not medical benefits. You may choose to accept a lump sum payment for your lost income, but keep your medical benefits open so you can continue treatment. This is a common choice when your condition requires long-term care.
Stipulation agreements give injured workers a way to settle parts of their case while holding off on decisions that need more time. It’s a flexible option that can help you make progress without giving up workers’ comp benefits you may still need down the line.
Can a stipulation agreement be changed if a worker’s condition worsens?
Usually not. Most stipulation agreements explicitly waive the right to reopen the claim, which means the worker is not permitted to petition to change its terms.
If your stipulation agreement did not explicitly waive your ability to petition, you may submit a request to the Colorado DOWC. You’d provide medical evidence of the change in condition and potentially attend a hearing to present the case.
There is an exception, however. Colorado law allows a stipulation agreement to be reopened in limited circumstances when there is evidence of fraud or a mutual mistake of material fact when the agreement was signed. For instance, if both parties were unaware of a significant medical condition related to the work injury at the time of settlement, this could constitute a mutual mistake.
The bottom line?
It’s much easier to negotiate a fair deal up front than it is to try to undo an agreement later. Once you sign, your options to make changes are extremely limited.
A Guide to Reopening Your Colorado Workers’ Comp Claim After a Worsening Injury
Learn when you may be able to reopen your Colorado workers’ comp claim.
What are the biggest drawbacks of stipulation agreements for Colorado workers?
While stipulation agreements can offer a faster resolution to a workers’ comp claim and avoid a lengthy hearing, they also come with risks. Here are some potential drawbacks injured workers should be aware of:
- Pressure to settle too soon. Workers sometimes feel rushed to sign an agreement before their condition has fully stabilized or before they’ve reached maximum medical improvement (MMI), which can lead to undervalued settlements.
- Lower settlement just to close the case. In many cases, injured workers agree to a lower settlement amount in exchange for resolving the claim faster. While this may offer short-term relief, it can fall short of covering future medical expenses or lost wages.
- Misunderstanding the terms. Stipulation agreements can be written in legal language that’s difficult to understand without guidance. If you don’t fully grasp what rights you’re giving up, you could unknowingly sign away important benefits.
Because the stakes are high when closing out a workers’ comp case, it’s essential to have a local Colorado work injury attorney review any stipulation agreement before you sign. They can help ensure you’re not settling for less than you deserve and protect your rights moving forward.
Need help negotiating a fair Colorado workers’ comp settlement?
Workers’ comp was created to protect injured workers—but when the system falls short, Babcock Tucker steps in. We’re laser-focused on helping injured Colorado workers get the support they need to take care of themselves and their families long after the paperwork is signed.
If you’re thinking about settling your claim, don’t go it alone. Our knowledgeable Denver work injury lawyers can explain your options in plain English, negotiate on your behalf, and ensure your future is protected.
Reach out to Babcock Tucker today to get started by scheduling a free consultation.
