What is a Section 32 Settlement Agreement?

Once a workers’ compensation claim has been either accepted as work-related or found by the Board to be compensable, the primary goal of the insurance carrier and/ or employer is to settle the claim. Settlement is priority because it allows the carrier to end exposure for indemnity and/or medical costs. New York Workers’ Compensation Law §32 allows for resolution of specific issues, or the entire case, at any stage in the proceedings. These settlements are typically referred to as “Section 32 settlements” because of the specific section of the law that authorizes these settlement agreements.

In New York, claims are either settled:

  • “indemnity only,” which means the carrier/employer remains liable for ongoing medical treatment but the parties agree to settle the indemnity portion of the claim; or
  • “full and final,” meaning the parties agree to settle both the indemnity and medical portions of the claim. Upon approval of the settlement, the claimant waives their right to any additional indemnity awards and medical treatment related to the claim.

Section 32 allows the claimant to waive their right to any or all past, present, or future indemnity and medical benefits. New York law requires all Section 32 settlement agreements to be approved by the Board. Without Board approval, the parties do not have a valid settlement.

The settlement agreement must be be approved by the Board unless it is determined that:

  1. the agreement is unfair, unconscionable, or improper as a matter of law; or
  2. the agreement is the result of an intentional misrepresentation of a material fact; or
  3. within 10 days of submission of the agreement, the board has received from any party in interest a written request that the agreement be disapproved by the board. N.Y. Work. Comp. Law §32(b).

Once the parties agree to settle the case, the defense attorney will typically draft proposed settlement documents. Once the documents are signed by all parties, a hearing is requested to finalize the agreement since it needs Board approval. (Based on the new streamlined settlement approval process announced by the Board in February 2016, hearings will not be required under all circumstances). Following the hearing to approve the settlement, there is a ten day waiting period during which time any party can withdraw from the agreement. If there is no request to withdraw from the agreement within the ten day waiting period, the Board will issue a Notice of Approval. Once a §32 agreement is approved by the Board and a Notice of Approval is issued, it may not be subject to appeal and may not be reopened for further litigation. A party may only file an appeal if the Board disapproves a §32 settlement.

The Board requires that all §32 agreements include an approved cover page (C-32). The Board has created a new mandatory Board form (C-32-I) for “indemnity only” settlements.  Additionally, the Board requires all settlement agreements be accompanied by a properly completed, signed and notarized release by the claimant (C-32.1).

Declan is an attorney licensed to practice law in New Jersey, New York and the U.S. District Court of New Jersey. Declan is a Partner at Lois LLC where he defends employers and carrier in New York workers’ compensation claims. He can be reached directly at dgourley@loisllc.com or 201-880-7213.