Can Someone Back Out of a MN Workers’ Compensation Settlement?

Can Someone Back Out of a MN Workers’ Compensation Settlement?

We’ve previously blogged about whether you should settle your case and the general effect of a settlement of your workers’ compensation claim. In some cases, however, you might have already executed a settlement agreement but that agreement may no longer be in your best interest or you may feel that the settlement agreement is no longer appropriate. Are there any circumstances in which you can challenge the prior settlement?

The most common type of situation when this comes up is where you suffer an injury, enter into a settlement based on what you thought was the full extent of the injury, and then later discover that the injury is actually worse than originally thought. For example, you may have experienced a lumbar fracture which originally had a good recovery prognosis but which eventually became a source of chronic, disabling pain.

Fortunately, Minnesota law allows a settlement award to be vacated if there is a substantial change in medical condition. What constitutes a “substantial change” may be hard to define exactly, but a few examples can generally show what that means. In one case, a failed lumbar fusion surgery, plus the discovery that the worker’s back pain would disable him from all work on a permanent basis, was enough to warrant vacating a settlement agreement which had been made on the assumption that the worker would eventually be able to find other employment. In another case, however, continuing non-specific low back pain was insufficient to justify vacating the original award.

There are a few other instances in which you could challenge a settlement agreement that has already been executed. These include a mutual mistake of fact or newly-discovered evidence (there’s a provision for vacating a settlement award based on fraud, but that’s generally more relevant to employers). A mutual mistake of fact means exactly what it sounds like, that both you and your employer were operating under a misunderstanding about some element of the agreement. The mistake could be about the amount of benefits that would be paid out or the effect of the agreement.

Newly-discovered evidence often goes along with a substantial change in medical condition, but this is a distinct reason for vacating a settlement award; it means new evidence about the degree or extent of your disability.

In sum, you should assume that any settlement agreement that you consider entering into will be binding (and accordingly seek legal help BEFORE signing it), but in certain limited circumstances, there may be scope for having your settlement award set aside.

Workers' Compensation

Christopher Rosengren
Rosengren, Kohlmeyer & Hagen Law Office Chtd.