How to Coordinate Workers’ Compensation Benefits with a Personal Injury Settlement in North Dakota
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney in North Dakota for guidance on your specific situation.
Detailed Answer
When you receive workers’ compensation benefits and later pursue a third-party personal injury claim, North Dakota law requires that the workers’ compensation insurer be reimbursed (or exercise its subrogation rights) from any recovery. You must follow a structured process to coordinate benefits and protect your interests.
1. Understand the Insurer’s Subrogation Right
Under NDCC § 65-05-07, the workers’ compensation insurer has a lien on any third-party recovery up to the amount it has paid in benefits (medical, wage loss, rehabilitation). This entitlement ensures the insurer recoups benefits already disbursed.
2. Notify the Insurer of Your Third-Party Claim
As soon as you file a lawsuit or present a claim against the third party, inform the workers’ compensation insurer in writing. Provide case numbers, opposing counsel contact, and relevant deadlines. Early notice prevents surprises and facilitates timely lien calculation.
3. Obtain a Subrogation Statement
Request a detailed subrogation statement from the insurer. NDCC § 65-05-07(3) requires the insurer to list all amounts paid and any anticipated future expenses. Review it closely for accuracy.
4. Negotiate Lien Reduction
Court decisions in North Dakota allow for equitable reduction of the insurer’s lien if attorney fees and litigation costs disproportionately diminish your net recovery. You or your attorney may petition the court to apportion a fair share of the third-party recovery toward expenses before satisfying the lien.
5. Allocate Settlement Amounts Wisely
Structure your settlement to distinguish between medical expenses, lost wages, pain and suffering, and future care. ND courts generally limit subrogation to amounts paid for medical and wage benefits, not damages for non-economic losses.
6. Draft a Coordinated Settlement Agreement
Include express language in the settlement agreement addressing the workers’ compensation lien. Provide that a portion of the settlement will be held in escrow or paid directly to the insurer upon finalizing lien resolution.
7. Finalize Lien Satisfaction and Obtain Release
Once funds are allocated, pay the agreed lien amount to the insurer. Secure a written lien release or waiver before disbursing remaining proceeds. Keep copies of all correspondence and releases in your file.
Helpful Hints
- Start notifying your comp insurer as soon as you pursue third-party damages.
- Keep detailed records of all workers’ comp benefits paid.
- Discuss lien negotiation strategies with your personal injury attorney early.
- Allocate settlement figures clearly to minimize subrogation on non-economic damages.
- Confirm the insurer’s subrogation statement matches your records.
- Ensure any reduction petitions comply with ND court rules.
- Obtain a signed lien release before distributing settlement funds.