Illinois wage differential lawyer perspective on what you should settle for
A nice guy came to us looking for a second opinion. He used to earn $35 an hour as a laborer, but sustained a major knee injury that prevents him from doing anything but a desk job. He's in his twenties and didn't graduate from high school. Right now he could probably earn minimum wage at best.
When we consider telling our clients to settle these cases we look at their needs for future medical care, the amount of their loss and what better job might be available for them. For the sake of easy numbers, let's say that his earnings loss is $30,000.00 a year and he is expected to live for 50 years. When valuing what a case is worth, we take 2/3 of the earnings loss (which is $20,000.00) and multiply it by the life expectancy. In this case that would be $1,000,000.00.
We then figure out what the present value of that loss is. In other words, there is no motivation for the insurance company to pay out that full amount because they could invest it and just pay you weekly hoping that you'll die young. So for a million dollar loss let's say that the present value of that is $400,000 (we have a tool we use to figure that out. FYI, we are just making that number up and didn't do it for this example).
So if the insurance company settled for $400,000, the caller who in theory be getting the equivalent of what they would get if they lived their full life. Insurance companies, reasonably so, never pay more than 80% of present value and depending on the case, the client might get as little as 2/3. If there are defenses to the case it could be worth less.
In this case, right now the caller is getting around $900 a week, tax free since he can't work. Our take is that settling the case no matter how big the offer would be a mistake. Under Illinois workers comp law he can get the insurance company to pay for him to get his GED. If it's a reasonable plan that would succeed, he might even be able to get them to pay for college or an associates degree so his ultimate earning potential could increase. The cost of those programs could reach the six figures by themselves. If he went that route then they would have to continue to pay him at his $900 weekly rate.
In other words, the best thing for this guy to do is nothing right now. If he can only make $8 an hour now, but with training will be able to land a job making $50,000 a year, doesn't that serve him best? Of course it does. I would make more money if this guy settled his case for $300,000.00 now than if he got a college degree and settled for $100,000.00 in five years, but is that best for him? Of course not. Any attorney who tells you otherwise is probably selling you out.
We are workers' compensation attorneys that help people with Illinois work injuries anywhere in IL via our statewide network of attorneys. Contact us and we will answer your questions or find the right lawyer for your situation.
