When you’re injured on the job, many times it is the fault of someone other than yourself, your employer or a coemployee. For example, you could be involved in an automobile accident while driving for work that is the other driver’s fault. Your job might require you to be on someone else’s property, and through some defect in their property you could be injured. Even if you work in a factory, if you’re injured due to defective machinery you may have a claim against the manufacture of that machinery. If you are injured on the job and it is the fault of some other party such as this, you may also have a claim against the “third party” responsible for your injuries and damages in addition to being entitled to Worker’s Compensation benefits.
Third party cases can compensate you not only for the medical expenses and wage loss covered by workers’ compensation, but also for things that are not paid under your workers compensation claim, such as non-economic damages for pain and suffering, inconvenience and loss of enjoyment of life. You may also be able to recover any third party claim the portion of your wage loss not covered by comp. While all this sounds great, there is a catch. In Pennsylvania, if recovery is made against a third party, the employer or workers’ comp carrier is entitled to be repaid what they paid out in workers’ comp benefits from your third party recovery. This is called a “subrogation lien”.
However, the employer or workers compensation carrier is not entitled to the full or face amount of the payments they have made if you have incurred expenses, such as attorney fees or costs, to obtain money from a third party. The employer or carrier must share the expenses of obtaining the third party recovery, which, in turn, reduces the amount that has to be repaid to them out of third party recovery and could put more money in your pocket. Calculating exactly how much the shared expenses will reduce the subrogation lien is not a simple task, and our office even has other lawyers contact us on occasion to ask how that is done. Because it is complicated, an injured worker should always have an attorney experienced in both workers’ comp and accident cases analyze the situation so that money that should be going in your pocket does not end up going to the employer or comp carrier instead.
In addition, if your workers compensation benefits are continuing at the time you resolve your third-party settlement, there is sometimes a future credit against comp benefits for the balance of recovery received from the third party case. This calculation and what it means to the injured worker’s financial future is often even more confusing than the past lien. Don’t let the third party insurance company “do you a favor” by offering to pay the comp lien directly. This could result in an inaccurate calculation of the expenses that must be shared and cut into your recovery. An experienced attorney can help you accurately assess these issues and maximize your recovery.