Detailed Answer
Under New Mexico law, a workers’ compensation carrier that has paid benefits for a workplace injury may assert a lien or subrogation interest against any third-party personal injury recovery. The purpose is to reimburse the carrier for amounts it paid. Two main statutes govern this process:
- NMSA 1978, §52-1-48 (reimbursement election and priorities)
- NMSA 1978, §52-5-21 (lien notice, enforcement, and allowable deductions)
To resolve a workers’ compensation lien on your personal injury claim, follow these steps:
- Notify the Insurer of Your Third-Party Claim
As soon as you pursue a third-party lawsuit or settlement (e.g., a car crash, premises liability), you must inform your workers’ compensation carrier in writing. Failure to notify within 60 days of filing or settlement risks forfeiture of the carrier’s lien rights. See NMSA 1978, §52-5-21(A). - Obtain a Written Lien Notice
The carrier will issue a formal lien notice specifying amounts paid and interest owed. This notice establishes the carrier’s subrogation interest and priority over other claimants (subject to attorney’s fees and costs). - Negotiate a Reimbursement Agreement
You and your attorney can negotiate the carrier’s share of the net recovery. New Mexico caps the carrier’s reimbursement at the total of benefits paid plus reasonable interest and allocable attorney fees. Often both sides agree on a percentage holdback or offset. - File a Petition for Approval with the Workers’ Compensation Administration (WCA)
If parties cannot agree, either can petition the WCA for a hearing. The Administrative Law Judge will determine the lien amount, allowable deductions (attorney fees and case costs), and disbursement procedure. See NMAC 11.4.1.11. - Secure Final Approval and Lien Release
Once agreement or order is in place, obtain a signed conditional release or lien waiver from the carrier. This document confirms the carrier’s acceptance of its share and clears the path for disbursing the remaining settlement funds. - Disburse Funds According to Approval
Your settlement check must reflect deductions for medical lien holders, carrier reimbursement, attorney fees, and cost advances. Comply precisely with the WCA order or agreement to avoid post-settlement disputes.
Helpful Hints
- Keep all settlement negotiation emails and letters in a single file.
- Document every medical treatment and expense paid by the carrier.
- Engage counsel experienced in both workers’ compensation and personal injury subrogation.
- Calendars reminder: file notices and petitions within statutory deadlines (60 days).
- Retain copies of any WCA orders and lien waivers for your records.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. You should consult a licensed attorney in New Mexico for guidance on your specific situation.