Disclaimer: This article is for educational purposes only and does not constitute legal advice. For guidance on your unique situation, consult a qualified attorney.
Detailed Answer
When you suffer a work injury caused by a third party, Virginia law allows two streams of recovery: workers’ compensation benefits and a personal injury settlement. Coordinating these benefits ensures you receive full compensation while satisfying the insurer’s right to reimbursement.
1. Understand Virginia’s Subrogation Rule
Under Virginia Code § 65.2-309, if you recover damages from a third party, your employer’s workers’ compensation insurer has a statutory right to reimbursement for benefits paid. You must repay the insurer from your settlement or judgment to the extent of benefits received.
2. Calculate the Subrogation Amount
The reimbursement covers total disability, medical expenses, vocational rehabilitation, and burial benefits paid. Typically, the insurer submits a statement of benefits paid. For example, if you received $50,000 in medical and wage benefits, the insurer can claim up to $50,000 from your third-party award.
3. Negotiate Allocations to Preserve Your Recovery
You and your attorney can negotiate with the insurer to allocate attorney fees and litigation expenses. Virginia courts often allow you to deduct a pro rata share of legal fees and costs from the reimbursement figure. This reduces the net repayment amount and protects more of your settlement.
4. Resolve Disputes Before the Commission
If the insurer disputes the repayment amount, you can file a petition before the Virginia Workers’ Compensation Commission. The Commission can adjudicate the correct subrogation figure, fee allocations, and interest under § 65.2-309.
5. Complete Coordination Before Finalizing Your Settlement
Finalizing your personal injury settlement before addressing subrogation can delay your full recovery. Include provisions in your settlement agreement that require the insurer’s lien to be satisfied out of the settlement proceeds. This approach avoids subsequent claims against you.
Helpful Hints
- Obtain a detailed benefits statement from the insurance carrier early.
- Discuss fee-sharing formulas with your attorney to minimize out-of-pocket costs.
- Include subrogation language in the settlement document.
- Track deadlines for petitions at the Workers’ Compensation Commission.
- Consider mediation to resolve subrogation disputes quickly.