Detailed Answer
When you receive workers’ compensation benefits in Wyoming and later pursue a personal injury claim against a third party, you must coordinate your recovery to satisfy the insurer’s statutory lien without losing money you’ve earned through a settlement. Under Wyo. Stat. § 27-14-207, a workers’ compensation insurer has a lien against any third-party recovery to the extent of benefits paid or payable. You need to follow these steps:
- Identify the Insurer’s Lien. Review your workers’ compensation award notices and benefit statements. The insurer’s lien covers medical expenses and wage-loss benefits already paid or owed. Wyo. Stat. § 27-14-207.
- Provide Timely Notice. Notify the workers’ compensation insurer in writing that you intend to file a personal injury suit or negotiate a settlement. Early notice helps protect your right to adjust the lien and avoids disputes about your settlement allocation.
- Allocate the Settlement. Break out settlement proceeds between categories: past and future wage loss, medical expenses, and pain and suffering. Wyoming law generally limits the insurer’s lien to wage loss and medical costs—not to pain and suffering. By allocating, you ensure you keep non-covered elements of the recovery.
- Negotiate Lien Reduction. Your personal injury attorney can negotiate with the workers’ compensation insurer to reduce the lien by a proportional share of attorneys’ fees and litigation costs. Many insurers will agree to a reasonable reduction under equitable principles.
- Obtain a Lien Release or Judgment Approval. Either obtain a written statement from the insurer releasing its lien for the agreed-upon amount or ask the court to approve the settlement and address lien rights in a single order. Court approval can bar later attempts by the insurer to claim additional sums.
- Disburse Settlement Funds. After deducting the negotiated lien, attorney fees, and costs, disburse the remaining funds to yourself. Maintain clear records showing how you satisfied the workers’ compensation lien.
By proactively managing these steps, you protect your rights under the Wyoming Workers’ Compensation Act, avoid double recovery issues, and maximize the net amount you keep from a personal injury settlement.
Helpful Hints
- Start coordination early—don’t wait until after you’ve signed a release.
- Keep written proof of all notices and correspondence with the insurer.
- Work with a personal injury attorney familiar with Wyoming lien statutes.
- Ask the insurer to send a formal lien statement with itemized benefit totals.
- Request a court-approved allocation if your settlement requires judicial oversight.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.