• Understanding a redemption settlement.Image by Flickr.com, courtesy of National Institute for Occupational Safety and Health (NIOSH)
  
  

Function

• The function of a redemption agreement is to enumerate the terms and conditions of a final settlement of all aspects of an injured employees worker's compensation claim. The redemption agreement covers all elements of a pending claim for damages pursued by an injured worker. Once executed, a claimant cannot seek additional compensation at a later date, even if there is a unforeseen development associated with her injury.
  
  

Effects

• In addition to settling the claims of the injured worker, a redemption agreement also extinguishes all rights the employee otherwise has to a full hearing. A redemption agreement extinguishes that rights of a worker to present evidence and testimony on her behalf before an independent special magistrate or administrative law judge.
  
  

Release of Liability

• The workman's compensation redemption agreement also releases the employer and the worker's compensation insurance company of any further liability for the employee's injuries and damages. Pursuant to the worker's compensation redemption agreement, neither the employer nor the insurance carrier will ever pay anything additional beyond the settlement amount set forth in the agreement itself.
  
  

Voluntary Act

• Because of the serious nature of a redemption agreement, and because of its ultimate finality, an injured worked must sign it as a complete and voluntary act. Indeed, in order for the redemption agreement to be approved by the presiding special magistrate or administrative law judge, a demonstration of the voluntary nature of the execution of the agreement by the injured worker must clearly be shown.
  
  

Warning

• Worker's compensation claims and cases, including redemption agreements, represent very complex legal matters. Extremely important rights and interests of an injured worker are at stake. Although it is possible and permissible for a worker to represent herself in a worker's compensation case, retaining an experienced work comp lawyer is highly advisable.