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
1. Identify Your Workers’ Compensation Benefits and Subrogation Rights
Under West Virginia Code § 23-2-9, your employer’s insurer has a statutory right to recover benefits paid if you settle or win a third-party personal injury claim. This right, called subrogation, allows the insurer to step into your shoes and claim part of your recovery to reimburse benefits it already paid.
2. Provide Written Notice of Your Third-Party Claim
Per WV Code § 23-2-9(d), you must notify your employer or its workers’ compensation insurer in writing within 30 days after filing a third-party lawsuit or giving notice to the at-fault party. Include:
- Your name and address
- Date and description of the work injury
- Details of the third-party suit or claim
Send this notice by certified mail and keep the return receipt.
3. Calculate the Insurer’s Subrogation Amount
West Virginia limits the insurer’s recovery to its pro rata share of your net proceeds. Under WV Code § 23-2-9(g), calculate the insurer’s share as follows:
- Add together the total benefits paid by the insurer and your net recovery (gross settlement minus attorney fees and litigation costs).
- Divide the insurer’s benefits by that total to get its percentage share.
- Multiply that percentage by your net recovery to find the subrogation amount.
Example: If the insurer paid $20,000 in benefits and your net recovery is $30,000, the insurer’s share is 20,000/(20,000+30,000)=40%. Its lien on your net recovery equals 40% of $30,000, or $12,000.
4. Negotiate or Petition to Resolve the Lien
You can negotiate a discount from the insurer’s full lien amount. Settlement discussions often lower the insurer’s claim in exchange for prompt payment. If negotiations stall, consider filing a declaratory action in circuit court to determine the proper lien amount under WV Code § 23-2-9.
5. Obtain a Lien Waiver or Release
Once you agree on an amount, secure a written lien waiver or release from the insurer. This document confirms the insurer will no longer assert a claim against your settlement proceeds.
6. Document the Resolution in Writing
Keep copies of all notices, calculations, settlement agreements, and lien releases. Store these records with your case file to protect against future disputes.
Helpful Hints
- Track and save all workers’ compensation benefit records for accurate lien calculation.
- Serve your notice within 30 days to avoid procedural defenses.
- Use certified mail or another method with delivery confirmation.
- Engage counsel familiar with West Virginia subrogation rules to review calculations.
- Consider early negotiation to reduce delay and litigation costs.
- Verify any written release covers both past and future subrogation rights.