Additional Information Regarding LB 961

In our last post, we recognized that LB 961 was recently passed by the unicameral and signed into law by Governor Heineman. The post focused on the effect LB 961 had on workers’ compensation benefits paid to volunteer firefighters and EMTs.

Additionally, LB 961 amends the law regarding the use of a release in the settlement of a workers’ compensation accident. As of July 18, 2014, when the new law will take effect, a release will be final and conclusive as to all rights waived in the release, unless it was procured by fraud. The additional language added to §48-139 of the Nebraska Revised Statutes gives a release the same binding effect as a court-approved lump sum settlement. As an additional layer of protection, LB 961 allows the parties to obtain an Order of Dismissal With Prejudice from the Court in all release settlements, even those in which litigation was not pending before the Court. In an effort to make releases more consistent with court-approved lump sum settlements, LB 961 also requires payment of the settlement proceeds within 30 days of when the release is filed with the Court. If the settlement funds are not paid within 30 days, the employer is subject to a 50 percent waiting time penalty.

Before the passage of LB 961 there was an element of risk when using a release to settle a workers’ compensation case because it was unknown whether the settlement would be considered in conformity with the Workers’ Compensation Act. The amendment to §48-139 now gives releases the same enforceability as lump sum settlements with Court approval. The main difference when using a release to settle a case is that payment of the settlement proceeds must be made prior to the Court issuing the Order of Dismissal With Prejudice.

For more information on how LB 961 will affect the settlement of a case using a release, contact Brenda Spilker at (402) 475-1075.