Disclaimer: This article is for informational purposes only. It does not constitute legal advice.
Detailed Answer
Under South Carolina law, if you receive workers’ compensation benefits for a workplace injury and later pursue a personal injury claim against a negligent third party, your employer (or its insurer) may assert a lien to recover the benefits it has paid. This statutory subrogation right prevents double recovery and ensures that the cost of compensation shifts to the at-fault party.
Statutory Basis: South Carolina Code §42-15-80 grants employers and insurers a subrogation lien to “all rights and remedies” of the injured employee against any third party. You can read the statute here: SC Code §42-15-80.
How the Lien Works:
- The employer’s lien attaches to the total amount you recover from the third party, whether by settlement or court judgment.
- Your attorney’s fees and court costs must be deducted proportionally from the total recovery, not just your personal share. See SC Code §42-15-80(B) for fee apportionment rules.
- After deducting your portion of fees and costs, the remaining fund splits into two parts: the employer’s lien and your net recovery.
Hypothetical Example: Suppose you settle a third-party claim for $50,000. You previously received $20,000 in workers’ compensation benefits. Your attorney charges a 33⅓% contingency fee ($16,667) plus $1,000 in litigation costs. Under SC Code §42-15-80(B):
- Determine total fees and costs: $16,667 + $1,000 = $17,667.
- Calculate the employer’s share of fees: ($20,000 lien / $50,000 total recovery) × $17,667 ≈ $7,067.
- Reduce the employer’s lien by its share of fees: $20,000 – $7,067 = $12,933.
- Your net recovery: $50,000 – $17,667 (fees/costs) – $12,933 (reduced lien) = $19,400.
This method ensures the employer pays its fair share of legal fees and costs, and you keep the balance after lien satisfaction.
Helpful Hints
- Notify your workers’ compensation carrier promptly when you file a third-party claim.
- Maintain clear records of all compensation benefits, medical bills, and settlements.
- Review your workers’ compensation policy and the statute before negotiating a settlement.
- Consider negotiating lien reduction if the lien would leave you under-compensated.
- Consult an attorney experienced in both workers’ compensation and personal injury to protect your rights.