Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney regarding your specific situation.
Detailed Answer
When you settle a personal injury claim in South Dakota after a work‐related injury, the employer or its insurer may assert a workers’ compensation lien for benefits already paid. Resolving that lien requires a series of steps under South Dakota law, primarily SDCL § 62-4-28 (lien and subrogation rights) and SDCL § 62-4-33 (recovery against third parties):
- Identify the Lien Holder. Determine whether the employer or the insurer holds the lien. Request a written statement of the total compensation benefits paid or owed to date.
- Obtain an Itemized Lien Statement. Ask for a detailed breakdown of the lien amount, including medical benefits, wage loss, and any penalties or interest. This helps confirm the correct figure for negotiation.
- Notify All Parties. Give written notice to the lien holder, your personal injury attorney, the court (if a lawsuit is pending), and the other side’s insurer. This ensures everyone understands the potential claim and lien rights under SDCL § 62-4-28: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=62-4-28.
- Negotiate the Lien Amount. Often you can negotiate a reduction. Consider factors like the prospect of litigation, attorney fees, and your net recovery. A fair compromise benefits both you and the lien holder.
- Allocate Settlement Funds. In your settlement agreement, clearly specify how much is allocated to medical expenses, lost wages, and pain and suffering. This allocation affects the lien calculation under SDCL § 62-4-33: https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=62-4-33.
- Draft Release Documents. Prepare a stipulation or order for the court (if applicable) that approves the settlement and authorizes payment of the lien. Include a release of lien language once payment is made.
- Pay the Lien and Obtain Release. Disburse the negotiated lien amount directly to the lien holder. Obtain a signed lien release or satisfaction from the employer/insurer.
- File Documentation. File the lien release with the circuit court clerk or, if no lawsuit was filed, with the South Dakota Department of Labor and Regulation. This confirms the lien has been satisfied.
Helpful Hints
- Keep copies of all written communications with the lien holder.
- Request deadlines in writing to avoid missing statute of limitations or filing dates.
- Consider hiring an attorney who handles both personal injury and workers’ compensation matters.
- Review your personal injury settlement to ensure it covers anticipated future medical costs.
- Ask for an escrow arrangement if multiple liens exist.
- Confirm that your net recovery meets your financial needs after lien payment and attorney fees.