Is That Offer Bona Fide?

Did you know that a voluntary offer to settle a workers’ compensation claim in New Jersey must meet three specific criteria to comply with state law?

  1. The offer must meet the 26-week rule — this means the offer must be made within 26 weeks of the last active treatment or return to work, whichever is later.
  2. The letter to the petitioner must explain the weekly payments are meant to be a bona fide offer of permanent disability. The start and end dates of the benefits should be stated.
  3. The letter must make clear that respondent will arrange an examination promptly and adjust the amount and percentage following that examination.

Caponi v. Federal Industries, 31 N.J. 1 (1959).

N.J.S.A 34:15-16 and N.J.S.A. 34:15-64(c) of the New Jersey Workers’ Compensation Statute address bona fide offers.

N.J.S.A 34:15-16 indicates that permanent disability should be determined after 26 weeks from the date the employee returns to work or received final active treatment, whichever is later. The 26-week rule will be extended by requests for additional treatment. Miller v. Joseph Savino & Son, Inc., 259 N.J. Super. 425 (App Div. 1992).

34:15-64(c) allows a respondent to extend payment of permanency to the petitioner and take a credit for it later on. Further, attorney’s fees will not be assessed on the amount of the voluntary offer. Combined, these two sections of the statute have been memorialized in case law to determine the three required components of a voluntary offer discussed above.

Judges are known to observe strict compliance of the law when this issue is raised. Further, judges have rejected the argument of “substantial compliance,” insisting that it is very important that the petitioner is not left in the dark as to the purposes of the offer and subsequent payments of benefits.

As such, an offer missing any of these three prongs may risk being denied as “bona fide” by the courts. This will, of course, mean that attorney’s fees may be assessed on all or parts of the offer. While judges have denied the argument of substantial compliance, it will certainly go a long way in arguing for a reduced attorney’s fee on the offer. Finally, remember that employers, carriers, and their counsel can always claim an outright credit of the dollar amount paid to date, even if the offer is deemed not bona fide.

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