Personal Injury-Taming the Workers’ Comp Lien

On October 14th, we wrote of the complexities involved in cases where a third party personal injury and workers’ compensation cause of action co-exist (myaccidentlaw.com/blog October 14, 2011). Personal injury attorneys need to be aware of the prevailing workers’ compensation statutes and whether it is necessary to obtain approval of the third party settlement by the workers’ comp insurer. Many a malpractice suit has been predicated upon this issue and caution is the best defense.

Personal injury lawyers should educate themselves and be savvy when negotiating the workers’ compensation liens. The philosophy at Grazian and Volpe is to ask for everything-all the time. In over 25 years of practice we have never ceased to be amazed at the savings you can achieve just by asking….and then asking….and asking.

As all small firm practitioners realize (and quite painfully) is the expense inherent in litigation. It has been our experience that workers’ compensation subrogation adjusters may often advance those expenses where they are contemplating that your suit may satisfy that lien. If you let them know you are willing to file and put in the work but unsure as to fronting all the expenses-they may be quite willing to advance the case expenses. Most workers’ compensation subrogation statutes require the lien holder to pay a proportionate share of the third party litigation expenses at resolution of the workers’ comp lien. If you can convince them that advancing the litigation expenses in advance of the resolution is advantageious to them-you may be surprised at the speed with which you receive their check!

On that same note, remember that the statutory workers’ comp lien can be waived or reduced and sometimes you can negotiate a reduction in the lien if you agree to a lesser compensation settlement on the condition that a complete waiver is issued on the proceeds of the third claim. Many adjusters will celebrate closing the claim for a lesser amount in the face of the time and uncertainty of a personal injury claim.

Finally, (for the purposes of this blog), personal injury attorneys should consider comparative fault in reducing the workers’ compensation lien.  If you personal injury suit involves comparative fault on the part of you client, many states may allow a reduction in the lien. In addition, the employer’s comparative fault may also serve to reduce the lien. Ask the adjusters or defense attorneyes to provide you with a letter outlining the estent of fault apportioned to each party and use the letter to bolster youir case for a lien reduction.

This article is certainly not an exhaustive discussion of the tactics available to negotiate a reduction in the workers’ compensation lien. Our practive combines both personal injury and workers’ compensation which has given us a view to both sides of the equation. The key is to realize that these liens can be negotiated or waived and to apply good business sense to assess your leverage- the subrogation carrier may have good reasons to settle for less or more quickly.

Please follow us on myaccident.law.com, LinkedIn and FaceBook for more articles and videos discussing current issues of personal injury and workers’ injury. We love to talk law so feel free to call our offices or submit a question to John Grazian the first Tuesday of every month on WCIU, You and Me in the Morning.