All about WorkCover statutory counter offers (Vic)
During a WorkCover claim you may have heard the term WorkCover counter offer or WorkCover statutory counter offer referred to.
This is an offer made on your behalf (usually) by your lawyer, during a common law lump sum claim.
It occurs after you have obtained a serious injury certificate.
You may have obtained this serious injury certificate after you had made a serious injury application and the lawyers acting on behalf of WorkSafe agreed that your injuries were serious one and then provided you with a certificate.
Or, if they rejected the application and you had to proceed before a judge and he or she awarded you with a serious injury certificate.
Or if during the process of your impairment claim you were assessed as having a 30% or greater whole person impairment rating which automatically entitled you to be classed as having a serious injury.
Once you have obtained a serious injury certificate then the next requirement is that the parties are to conference the matter, sometimes referred to as a statutory conference.
If the matter does not resolve during this conference, then WorkSafe and their lawyers are required to make a written offer to you.
This offer is called a statutory offer.
If you do not accept this offer then you and your lawyers are required to make a statutory counter offer.
The counter offer is not a typical offer
Normally when you think of negotiating you think of one party making an offer and then the other party making an offer.
Pretty simple right?
But not so when it comes to a statutory counter offer.
It is far more technical than that.
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There are costs implications with statutory counter offers
If your statutory counter offer is accepted, Your claim for common-law damages is finalised. It cannot be reopened in the future.
Most times, your lawyers will then deduct any costs that are owed to them out of the settlement amount.
These costs are referred to as solicitor/client costs.
The other side, that is WorkSafe, will be required to pay some costs to your lawyers.
These costs are called party/party costs.
If your counter offer is accepted, it will be a compromise of your claim that takes into account the risks of litigation.
In most cases if the other side accepts a statutory counter offer (which doesn’t happen very often) it probably will not represent the most amount of compensation that you could’ve obtained if you proceeded to court.
Here are the further cost implications that you need to be aware of in relation to the statutory counter offer:
Let’s say that you reject the other sides offer and make a counter offer.
And let’s say that the other side accepts that offer and your matter runs to judgement.
If you are not able to establish any liability on behalf of the other side, that is you lose your case completely, then you will be responsible for all legal costs and the party/party costs of the other side.
If you were to obtain a judgement of more than the statutory offer that the other side made but less than 90% of the statutory counter offer that you and your lawyers made, then you will need to pay your own legal costs.
That is, the other side will not pay you party/party costs even if you win your case.
The final scenario is that you obtain a judgement of 90% or more of the counter offer.
This means that the other side will to pay you party/party costs. You’ll just need to pay the costs of your own legal representatives.
This is the outcome that you are after.
Formulating a statutory counter offer
As you can see, a statutory counter offer under the WorkCover scheme is far more involved than just making a normal offer.
Making a statutory counter offer it’s a balancing act.
You need to make an offer that is high enough that you would be okay if the other side accepted it.
Because if they do accept it, your common law claim is finalised and cannot be reopened. It is all the lump sum compensation you will be entitled to for this claim.
However, the offer cannot be too high that it is an offer that you have no chance of getting 90% of or more down the track if the offer is rejected by the other side.
For these reasons, usually a significant amount of thinking needs to go into a statutory counter offer.
Examples
Let’s say that the other side makes an offer of zero and you want to obviously reject that and put a counter offer.
You’ve been told that your case is worth about $400,000, best case scenario.
It may seem like a good idea to put an offer of $400,000 or perhaps just under that, say $380,000.
However, you need to consider whether this is figure is one that you could get 90% or more of if the matter pushed on.
The other side of the coin is that it may seem like a good idea to put an offer of $100,000.
This being an offer that you are likely to be able to get 90% or more if the matter pushed on.
Statutory counter offers can be accepted and it is quite possible in this instance that the other side would accept the offer and your matter would be finished and you would probably have settled for much less than what your case was potentially worth.
As you can see, statutory offers can be quite complex and the best thing that you can do is to have legal representation that knows the system well and that have experience pursuing common law claims and making statutory counter offers.
Making a statutory counter offer is a critical part of your case that you need to get right.
Conclusion
A statutory counter offer an offer that is made in a WorkCover claim in response to a statutory offer.
These offers are made during a common law claim, after a person has obtained a serious injury certificate and proceeded to a statutory conference where the matter has failed to resolve.
The statutory counter offer is a very important offer.
It is not simply a run-of-the-mill offer. There are cost implications attached to a statutory counter offer.
If you don’t have your statutory counter offer accepted by the other side and you go on and are unable to establish any liability on behalf of the other side to pay compensation, then you are responsible for all of your legal costs as well as the party/party cost of the other side.
If you obtain judgement for more than the offer made by the other side but less than 90% of your counter offer then you will need to pay your own legal costs. That is the other side will not pay party/party costs.
If you obtain a judgement of 90% or more of the statutory counter offer then the other side will be responsible for all of your party/party costs but you will still need to pay the costs of your lawyers.
Statutory counter offers are a balancing act. You need to make an offer that is high enough that if it was accepted by the other side you would be okay with it, keeping in mind that a common law claim cannot be reopened and that the settlement is once and for all.
On the other side of the coin, the offer needs to be low enough that it is one that you are likely able to get 90% or more of if the matter pushed on.
