Alabama “Emergency” Administrative Order to be Adopted Permanently
Under the Alabama Workers’ Compensation Act, any settlement agreement must be approved by either a circuit court judge via a “best interest” hearing or approved by an ombudsman with the Alabama Department of Labor. Alabama Code §25-5-290 has always allowed for a workers’ compensation claim to be resolved through a benefit review conference overseen by an ombudsman. The Section makes no distinction that would preclude litigated cases from having a settlement agreement approved before an ombudsman. Despite this fact, the general practice for the past 18 years has been that settlement agreements in litigated matters must be approved by the assigned circuit court judge, where it was inappropriate or poor form to “go around” the assigned judge and have the agreement approved by an ombudsman. One former presiding judge went so far as to publish an opinion directed at both attorneys and ombudsman alike, which strongly implied there could be severe consequences for anyone who attempted to have such a settlement approved outside of the circuit courts.
Thus, for nearly two decades, litigated matters were walked through in front of the circuit court judges instead of ombudsmen. In some cases, this formality could delay the approval of a settlement agreement, depending on the court’s docket and the judge’s schedule. Further, a circuit court judge could potentially, and in some cases did, refuse to approve a settlement agreement even when both parties were represented by counsel. While the hearing requirement was designed to protect the parties, and to make a determination that the agreement was in the employee’s best interest, the process itself could be cumbersome or cause delays.
And then – COVID-19 took the world by surprise. Suddenly, the world shut down overnight. Courthouses, law firms, employers, schools, nail salons – nearly all industries were affected in some capacity during the initial weeks and months of the pandemic. As a result, local and state governments had to endeavor to find a way to move forward despite the obvious constraints. On March 18, 2020, the Alabama Supreme Court entered the first of many administrative orders regarding the prosecution of workers’ compensation cases during the suspension of in-person proceedings.
As a portion of this Administrative Order, workers’ compensation hearings could be held telephonically or via videoconference. Further, for the first time, it was clearly stated that any workers’ compensation settlement could be approved by an ombudsman, and that such settlement would result in the dismissal of the claim pending in circuit court. Chief Justice Tom Parker’s first Administrative Order ran through April 16, 2020, but subsequent orders have been entered time and again, continuing to sanction this settlement approval process through the present. The most recent Order was entered on November 19, 2021, and it extends through March 31, 2022.
Obviously, the open endorsement by the Alabama Supreme Court for settlement agreements to be approved by ombudsman has allowed parties to resolve matters more expeditiously. Additionally, the fact that such approval conferences may occur telephonically or through videoconference has also made the process incredibly efficient for all involved by allowing the approval of more agreements weekly and monthly, in turn, saving the parties time and money since they no longer have to travel to attend such a conference or hearing. The circuit court judges have also vocalized that the process has allowed their dockets to clear more quickly and efficiently. All in all, the process seems to have been a game changer in the workers’ compensation arena.
The Alabama Supreme Court took notice. In September 2021, I was contacted by Chief Justice Tom Parker to co-head a task force to draft a rule to permanently memorialize this process that has been so well received. Thus, I formed a group comprised of four defense attorneys, four plaintiff attorneys, four judges and one appellate expert, taken from all over the state to draft and publish the rule in a permanent format. As the Act already allowed for such a settlement approval, there was no need to re-write legislation. After much debate and discussion, the rule was finalized, and we will soon see it published as Alabama Rule of Judicial Administration 48, which specifically states as follows: “[a] pending Workers’ Compensation case in which a settlement agreement has been reached between the parties and approved by an ombudsman of the Alabama Department of Labor pursuant to Section 25-5-292, Ala. Code 1975, shall be dismissed upon filing by the parties of the settlement agreement, including a copy of the settlement documents approved by the ombudsman, and a joint motion for stipulation of dismissal, pursuant to Alabama Rule of Civil Procedure 41(a)(1)(ii), with the court.” There is no room in the Rule for a circuit court judge to overrule the settlement, or otherwise affect it.
The permanent publication and adoption of Rule 48 will allow parties to move settlement agreements to closure much faster, saving employers and their carriers on legal expenses previously incurred during the travel to and from such proceedings. Knowing this Rule will live on permanently allows everyone to breathe a sigh of relief, and we no longer must rush to push a settlement agreement through before the expiration of the latest Administrative Order’s deadline.
Attorney Contact Info
Amanda Cutshall Goozée