Workers’ Comp Lien on Third-Party Lawsuit Award

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Employees injured on-the-job in Florida are entitled to collect workers’ compensation benefits from their company’s insurance policy. 

But in addition, they may also have ground to pursue third-party litigation against others who may bear some responsibility for their injuries.

Workers’ compensation benefits are not awarded based on fault, so long as the employee was injured in the course and scope of employment and the injury arose out of employment. Employees can almost never sue their employers for a work-related injury, as workers’ compensation is considered the exclusive remedy.

They can, however, take action against others. But keep in mind, whatever compensation is collected in these actions may be subject to a lien by the employer’s insurer. Usually, it’s still worthwhile to take legal action against third parties because what you are awarded is usually far in excess of what you receive in workers’ compensation. That’s because workers’ compensation only pays for medical bills, a fraction of lost wages and nothing for pain and suffering. 

You can recover all of that with third-party litigation. You aren’t, though, entitled to double recovery. So if your workers’ compensation insurance already paid for medical bills, that doesn’t mean you get to pocket money you received from a third party litigant for medical bills. But neither does it mean the third party is free to avoid paying. That’s why the insurer is entitled to stake a claim to that money.

But not all of it. This was the issue recently raised in the consolidated appeal of DiCarlo v. Suffolk Construction Co. et al and Martin v. Angelini Plastering Inc., et al., before the Massachusetts Supreme Judicial Court.

Court records show two workers were injured in the course of employment.

One suffered back injuries in 2004 while working as a construction site electrician. The other was injured in 2010, also while working as an electrician at a construction site.

Both received workers’ compensation for medical expenses and lost wages. Both also subsequently filed a tort action (third-party litigation/ personal injury lawsuit) against the construction site owners and contractors, whom they allege were partially responsible for their respective injuries.

Both also eventually were awarded damages by these other defendants. And in both cases, the workers’ compensation insurance company sought reimbursement.

Here, even though workers’ compensation insurance companies do not pay damages for “pain and suffering,” they sought to stake a claim to these damages awarded to the worker, based on ambiguous language in Massachusetts statute. They indicated that all damages should be subject to the insurer lien.

The state high court disagreed and adopted a narrower interpretation of the statutory wording, in turn favoring the employees’ position.

Essentially, workers’ compensation insurers can’t be reimbursed for something they didn’t pay. Insurers never compensated the workers for pain and suffering, so they can’t seek “reimbursement” from damages for those harms.

So the fact that a worker receives both workers’ compensation benefits and damages for pain and suffering isn’t a form of “double compensation,” as the insurer asserted. Rather, it is supplemental.

Workers’ compensation was always meant to be a compromise. Workers don’t have to prove negligence and they are compensated quickly for job-related injuries. On the other hand, they forfeit the right to collect all the potential damages they might otherwise from the employer. And while they aren’t entitled to collect twice, neither should employers or their insurers become unjustly enriched because they failed to protect a worker from injury.

If you have been injured in an accident, contact the Hollander Law Firm at (561) 347-7770 for a free and confidential consultation. There is no fee unless we win.

Additional Resources:

DiCarlo v. Suffolk Construction Co. et al and Martin v. Angelini Plastering Inc., et al., Feb. 12, 2016, Massachusetts Supreme Judicial Court

More Blog Entries:

Intern Injury Compensation a Thorny Legal Question, Jan. 23, 2016, Naples Construction Injury Lawyer Blog