Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When you recover damages from a third‐party personal injury claim while receiving workers’ compensation benefits under New Hampshire law, the workers’ compensation insurer has a legal right to reclaim part of your settlement. This process is called subrogation, and it prevents you from receiving a double recovery for the same injury.
1. Workers’ Compensation Lien (RSA 281-A:56)
Under RSA 281-A:56, your employer’s insurer holds a lien on any third-party recovery. The lien equals the amount of benefits already paid (or payable) for medical treatment and wage replacement. Before you finalize a settlement, the insurer must assert its lien by notifying you and your attorney in writing. If they don’t, they may forfeit the right to reimbursement.
Link to statute: RSA 281-A:56 – Employer’s Lien on Third-Party Recovery
2. Subrogation and Reimbursement Process
- After you negotiate a personal injury settlement, the insurer will calculate its reimbursement. This typically includes past and future medical benefits and wage replacement linked to the injury.
- The insurer cannot claim attorney fees or litigation costs you incur in your third-party case, unless your contract with them specifies otherwise.
- If you settle without accounting for the lien, the insurer can suspend future benefits until it recovers its lien share.
3. Allocating Settlement Proceeds
To minimize disputes, negotiate a clear allocation in your settlement agreement. Example allocations include:
- Medical expenses.
- Pain and suffering.
- Lost wages.
Allocating a portion to pain and suffering can reduce the insurer’s reimbursement, since subrogation often applies only to economic damages.
4. Court Involvement and Stipulations
If the insurer disputes the amount owed, you can seek a court ruling on lien validity and amount. Courts look at:
- The language of RSA 281-A:56 and relevant case law.
- How you divided economic and non-economic damages in your settlement.
- Your insurer’s compliance with notice requirements.
Helpful Hints
- Notify your workers’ comp insurer early in your third-party case to avoid forfeiting subrogation rights.
- Work with your personal injury attorney to draft settlement allocations that distinguish between economic and non-economic damages.
- Keep detailed records of all workers’ compensation benefits received, including medical bills and wage statements.
- Review RSA 281-A:56 before negotiating to understand the insurer’s lien scope and calculation method.
- Consider mediation to resolve any subrogation disputes efficiently and avoid additional litigation costs.