Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult an attorney to address your specific situation.
Detailed Answer
Under Wisconsin law, an employer or its workers’ compensation insurer may recover benefits it paid if an injured employee later recovers damages from a third party. This right, known as a lien, appears in Wis. Stat. § 102.29. To resolve such a lien in a personal injury claim, follow these steps:
1. Identify and Calculate the Lien
First, confirm that your employer or its insurer paid workers’ compensation benefits related to the injury. Request a detailed statement of benefits paid and any associated medical costs. Under Wis. Stat. § 102.29(3), the insurer’s lien includes amounts for medical and indemnity benefits.
2. Notify the Workers’ Compensation Insurer
Once you file a personal injury claim against a third party, notify the workers’ compensation insurer in writing. Provide copies of your complaint, demand letters, or other pleadings. Early notice prevents delays and preserves the lien holder’s right to reimbursement.
3. Negotiate and Settle the Third-Party Claim
When settling with the third party, negotiate the total settlement amount. Recognize that the workers’ compensation lien will reduce your net recovery. You may negotiate a reduction of the lien based on equitable considerations or subrogation rules found in Wis. Stat. § 102.29(3m), which allows a pro rata share of fees and costs.
4. Allocate Settlement Proceeds
Allocate the settlement among damages for medical expenses, lost wages, pain and suffering, and other categories. Courts and the Wisconsin Department of Workforce Development review this allocation to determine the lienable portion. Clear settlement allocations can minimize disputes with the lien holder.
5. File Petition for Approval with the Wisconsin Workers’ Compensation Commission (WCC)
After settlement, file a stipulation or petition with the WCC. Include the settlement agreement, notice of the lien amount, and proposed distribution of funds. The WCC must approve the settlement and lien resolution to protect all parties and ensure the insurer’s right is honored.
6. Obtain the WCC Order and Release of Lien
Once the WCC reviews and approves the petition, it issues an order confirming the settlement and authorizing distribution to the insurer for the lien amount. Obtain a copy of the finalized order. It serves as the official release of the workers’ compensation lien.
Helpful Hints
- Review all compensation records to verify lien accuracy.
- Keep detailed notices and correspondence with the insurer.
- Include clear allocation language in your settlement agreement.
- Consider involving experienced counsel early in negotiations.
- Watch the WCC filing deadlines to avoid forfeiting rights.
- Confirm the WCC order is final before disbursing funds.