Resolving a Workers’ Compensation Lien on a Personal Injury Claim in Virginia

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.

Detailed Answer

When you pursue a personal injury claim after a work-related accident in Virginia, your employer (or its insurer) may have paid workers’ compensation benefits on your behalf. Under Virginia law, the employer has a lien against any third-party recovery to recoup those benefits. You must follow specific steps to clear that lien and distribute settlement funds correctly. Below is a step-by-step process under Virginia law.

1. Identify the Lien Amount
   Request a written statement from the employer/carrier specifying the total workers’ compensation benefits paid and the date range covered. This figure represents the amount to subrogate against your third-party recovery. See Va. Code § 65.2-309.
2. Provide Timely Notice
   Under Va. Code § 65.2-309, you or your attorney must notify the employer/carrier in writing when you file your personal injury suit. Include a copy of the complaint and demand full accounting of the workers’ compensation lien.
3. Negotiate the Lien Amount
   Review the accounting for accuracy. Common points of negotiation include:
   • Medical benefits directly related to the third-party injury.
   • Temporary total or permanent partial disability benefits tied to the claim.
   • Reasonable attorney’s fees and costs tied to securing the third-party recovery (the employer is typically responsible for their own legal costs).
4. Obtain Court Approval or Commission Ruling
   If you and the employer agree on a lien figure, incorporate it into a stipulation submitted to the court handling your personal injury case. If you cannot agree, you may petition the Virginia Workers’ Compensation Commission to determine the correct amount, or seek a declaratory judgment in circuit court.
5. Allocate and Distribute Settlement Funds
   Once the lien amount is fixed, allocate your settlement or jury verdict as follows:
   • First, reimburse the employer/carrier up to the agreed or adjudicated lien amount.
   • Next, pay your attorney’s fees and litigation expenses (typically subject to the contingency agreement).
   • Retain the remaining net recovery for your damages, such as pain and suffering, lost wages, and future medical care.
6. Secure a Lien Release
   After payment, obtain a written release from the employer or insurer confirming satisfaction of the lien. Keep this document in your case file to protect against future claims.

Helpful Hints

• Document every communication in writing. Confirm oral agreements by email or letter.
• Track all medical expenses and benefit payments related to the work injury.
• Ask your attorney to request a lien worksheet early in litigation.
• Consider mediation if lien negotiations stall.
• File any necessary motions for lien adjudication promptly to avoid delays in settlement.
• Keep settlement receipts and releases in a secure file for at least the statute of limitations period.