• 01
  • July
    2011

When an employee is injured on the job, due to a condition at work or due to the negligent or bad acts of a third party, workers' compensation should cover any related medical expenses or lost wages. In exchange, the employee cannot sue the employer for his or her injuries. But, if the workers' injuries are caused by a third party, the worker may be eligible for workers' compensation as well as may have a claim against the person who caused the injuries.

For example if, while working, a delivery driver is in an accident involving another car, the delivery driver may have a right to workers' compensation for the injuries that occurred while on the job. In addition, the delivery driver may also have a third-party liability claim against the other driver who caused the accident.

When an employee recovers from a third party for injuries that are also covered by workers' compensation, the employer's worker's compensation carrier is entitled to be reimbursed for its expenses from the proceeds.

Previously, a work comp lien could be placed on any money received from the third party for 100 percent of the work comp insurer's expenses. If the delivery driver above received $90,000 in workers compensation benefits, the work comp insurer would be entitled to a lien in the amount of $90,000 on any money recovered from the other driver.

Often, this would lead to troubles in settlement talks; the insurance company would not agree to settle for less than what it had paid out, but the amount of the claim after subtracting what would be paid back to the work comp insurer, may not have been worth pursuing through trial.

A third-party action is often how injured workers receive any sort of compensation for pain and suffering; worker's compensation covers medical expenses related to the injury as well as lost wages. The 100 percent recovery by the workers' compensation insurer often left little incentive for an injured worker to take the time and money to pursue a third-party claim.

This is no longer the case. A work comp insurer can still place a lien on the proceeds of a third-party liability claim, but now only up to two-thirds of its expenses. That percentage can be changed by agreement of the parties.

Using the example of the delivery driver above who recovers from the driver who caused the accident, the employer's insurance company would now be limited to a lien for approximately $60,000 of the injured worker's recovery rather than $90,000.

The new law effectively limits the windfall to employers' work comp insurers when injured workers spend additional time and money attempting to recover from a third party.

Source: Connecticut Law Tribune, "Trial Lawyers Claim Key Legislative Wins," 7/20/2011