A workers’ compensation lien is when a workers’ compensation insurance carrier registers a claim against a third party requesting to be reimbursed out of the proceeds recovered by the injured plaintiff in a personal injury litigation matter against the third party, for expenses the carrier made on behalf of the insured worker for medical care, rehabs costs or lost wages. In addition to recovering past expenses, the carrier may also be able to recover future medical expenses out of the portion of any settlement award that is allocated to future medical expenses. This process is referred to as subrogation.
Circumstances Under Which an Injured Worker May Bring a Personal Injury Lawsuit
An injured worker may be able to bring a personal injury lawsuit in addition to a workers' compensation claim under the following situations:
- Product Liability Suits - This may occur when an employee is injured by defective or dangerous equipment, or there are defective or misleading instructions or warnings relating to the operation of the equipment that causes the employee to be injured. The fault may be as a result of a third party.
- Third Party Causing Injury on Employer's Premises - An independent contractor, who is not an employee of the employer, may be working on the employer’s premises and cause injury to an employee of the employer.
- Employee Injured on Third Party’s Premises - Where an employee is performing job duties outside of the employer’s premises on a third party’s premises. This happens on construction sites where multiple contractors and sub-contractors are working together on the same job site, and a third party’s negligence causes an injury to the employee.
Laws for Filing the Lien
Since workers compensation laws vary state to state, the injured employee should check the laws of their state to make sure that the workers’ compensation laws do not prohibit them from filing a personal injury lawsuit against a third party.
The workers’ compensation insurance carrier needs to identify the type of subrogation rights they have under their state laws as well. For instance, some states allow the workers’ compensation insurance carrier the right to intervene into a third party action filed by the injured worker, while others do not.
Health Insurers May File a Workers’ Compensation Liens
Health insurers who pay for treatment for an injured worker and it is later discovered that it is a work related injury, have a lien against the claim if the workers’ compensation carrier refuses to pay the health insurer’s bill. This lien is then satisfied and discharged at the time the workers’ compensation carrier agrees to reimburse the health insurer.
Negotiating and Releasing the Lien
If the workers’ compensation lien amount is larger than the amount the plaintiff can expect to be awarded if they were to litigate the matter, the insurance carrier will usually try and settle for a lesser amount with the injured employee’s/ plaintiff’s lawyer. A workers’ compensation lien is released and satisfied when a claim is paid.
Can a Lawyer Help?
Workers’ compensation lawyers specialize in workers’ compensation laws. Workers’ compensation laws are complex. If you are involved with a workers’ compensation claim matter, you should consult with a workers’ compensation lawyer.