Most Workers’ Compensations Cases in Pennsylvania Resolved by Compromise & Release Agreement

Petitions to compromise and release Workers’ Compensation benefits can be used to dispose of all ungoing claims as well as disputed matters under the Act.

Under the changes to the Workers’ Compensation Act in 1996, commonly known as Act 57, significant changes were made for the settlement of workers’ compensation cases. Prior to the changes, settlements were not sanctioned and the only mechanism for resolving workers’ compensation claims was usually by a commutation of claimant’s wage loss benefits.

However, with the advent of Section 449 of Act 57, the Pennsylvania legislature permitted “settlements” under the Act for the first time. The provisions mandate safeguards for the approval of compromise and release agreements including detailed information that must be submitted along with the requirement that all relevant issues be evaluated. The Workers’ Compensation Judge at a hearing must determine only that the employee understands the full legal significance of the compromise agreement.