New Jersey is a permanency state. After sustaining a work accident, petitioners seek authorized medical treatment and are paid temporary disability benefits until they reach maximum medical improvement. Some petitioners will find their way to an attorney and file a Claim Petition seeking permanent disability benefits. Both sides will arrange for permanent disability exams and then try and negotiate a settlement. If the respondent acknowledges permanent disability, the petitioner will receive a permanency settlement. Judges of Compensation have authority to apportion counsel fees and costs and the respondents usually pay 60% of the counsel fee award and this can be a substantial sum.
One way to limit the amount of the counsel fee payable by the respondent is to consider a bona fide offer of permanent disability pursuant to N.J.S.A. 34:15-64. This portion of the statute allows respondents to voluntarily pay permanent disability within the latter of 26 weeks of the petitioner’s return to work or conclusion of active medical treatment and not incur a fee on the amount of the offer. This can lead to thousands of dollars in savings on just one claim.
Bona fide offers should be considered on all cases where there is an expectation the petitioner will receive an award of permanent disability. Bona fide offers should not be considered on denied claims or when there is a chance of obtaining a dismissal of the claim in exchange for a lump sum settlement pursuant to N.J.S.A. 34:15-20.