Compromise and Release vs Stipulations with Request for Award in California workers' comp

Most California workers' comp cases end in one of two documents: a Compromise and Release (C&R) or Stipulations with Request for Award (Stips). Both need a judge's approval, and both can carry the same permanent disability number. What they leave open afterward is very different. This guide compares them for applicant firms. It is general information, not legal advice.

Two ways to close a case

A Stipulated award is an agreement on the facts, such as the injury, body parts, earnings, the permanent disability rating and the need for future medical care, which the judge turns into an award under Labor Code 5702. Permanent disability is then paid in installments at the PD rate, and the award usually provides for future medical treatment.

A C&R settles the claim for a sum of money under Labor Code 5000 through 5003. The employee releases the claims the document lists, often including future medical care, in exchange for a lump sum. Under Labor Code 5001, a release isn't valid unless the WCAB approves it.

Side by side

The Supplemental Job Displacement Benefit voucher is outside both. Under Labor Code 4658.7, the voucher (up to $6,000 for injuries on or after January 1, 2013) can't be settled or commuted. The SJDB entry has more.

Approval and adequacy

Under 8 CCR 10700, settlement documents are filed with any medical reports not already in the record, and the WCAB checks every C&R and Stipulation for adequacy. An agreement that pays less than full compensation is approved only when there is reasonable doubt about the parties' rights, or approval is in their best interest. A judge may set a hearing instead of approving on the papers.

Under 8 CCR 10789, a C&R or Stipulation can be walked through to a judge without a declaration of readiness, after service on the other parties and any lien claimants with unresolved liens. Case-opening settlements are due by noon on the court day before the walk-through.

Attorney fees come out of the award and are only what the WCAB finds reasonable under Labor Code 4906. No fee may be collected before approval.

What usually goes to the judge with a settlement:

• The signed C&R or Stipulations, on the current DWC form.
• Medical reports not already in the record (8 CCR 10700).
• The rating, or the basis for the PD figure in a Stipulated award.
• Proof of service on the other parties and on lien claimants (8 CCR 10702).
• The attorney fee request and fee disclosure under Labor Code 4906.
• Any WCMSA analysis or CMS approval, when one applies.

Medicare and the WCMSA

When a C&R releases future medical care for a client who is on Medicare, or likely to be soon, Medicare's interest has to be considered. CMS reviews a proposed Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) when:

CMS's WCMSA Reference Guide (version 4.7, October 5, 2026) calls these thresholds a workload management tool, not a safe harbor. Medicare's interest must be considered in every case, even below them. A Stipulated award with open future medical usually avoids the question.

Liens at settlement

Lien claimants have to be dealt with before the case is really over. Under 8 CCR 10702, settlement documents must be served on lien claimants, and a lien can't be reduced without notice to the claimant. EDD liens for state disability paid during TD periods are common, and the settlement should say how each lien is handled. Before the walk-through or settlement conference, put every open lien next to the settlement figures, so the client knows what each lien claimant is asking for and what the firm expects to happen to it. Our liens guide covers filing rules and deadlines.

Choosing between them: a checklist

• Does the client need future medical care that would be expensive to buy privately?
• Is the client on Medicare, or likely to be within 30 months? Is a WCMSA needed?
• Is the rating settled, or could it worsen within five years of the date of injury?
• Does the client want a lump sum, for example to leave the area or pay debt?
• Are there disputed issues, such as apportionment or a body part, that give the defense reason to pay more for a full release?
• Which liens are open, and has each lien claimant been served?
• Is the SJDB voucher addressed separately, since it can't be settled?
• Have the rating and the TD history been audited before the numbers are agreed?

Explaining the choice to the client

Clients often hear "settlement" and assume a check. The choice between the two documents is easier when it is put in their terms:

• With Stips, they keep the right to treatment for the injury through the claims administrator, and PD is paid in installments until it's paid out. If the condition worsens within five years of the injury, the case may be reopened.
• With a C&R, they get one payment and, if future medical is released, pay for their own care afterward through health insurance, Medicare or out of pocket. The case is closed on what was released.

Walk through what the client's care has cost so far and what the doctors expect, such as future surgery, medication or injections. A lump sum that looks large can be small next to years of treatment. If Medicare is in the picture, explain early that part of a C&R may have to be set aside for medical care.

Write down the advice you gave and the client's decision. Settlement choices are among the ones clients ask about years later.

How a firm can track this

Settlement depends on numbers that come from across the file: the rating, TD paid, PD advances, liens and costs. Firms that keep a benefits ledger and a lien list on each case through the life of the claim spend less time reconstructing them at the end.

In PlaintiffStack, workers' comp cases have Benefits and Liens pages, and Finances keeps liens and their reductions on each case. Drafts such as WCAB petitions carry the caption and ADJ number. The product doesn't rate permanent disability or e-file settlement documents with the DWC.