Disclaimer: This article is for informational purposes and does not constitute legal advice.
Detailed Answer
Under Mississippi law, an employer or its insurer that pays workers compensation benefits gains a subrogation right to recover those benefits from your third-party personal injury recovery. This remedy prevents you from double collecting for the same injury and helps keep Mississippis workers compensation system solvent.
Statutory Basis: Mississippi Code Annotated §71-3-37 provides that an employer or insurer shall be subrogated to the cause of action of the employee against any negligent third party and shall be entitled to reimbursement of all compensation paid. The statute further directs that the employers recovery bears its fair share of attorney fees and costs. Read the full text at Miss. Code Ann. §71-3-37.
How the Lien Affects Your Recovery:
- Subrogation: Your employer steps into your shoes and asserts a lien on any third-party settlement or verdict.
- Reimbursement: The employer may recoup medical benefits, temporary total disability payments, and other comp benefits it paid.
- Pro Rata Allocation of Fees: Under §71-3-37, the employers share of attorney fees and costs is proportional to the benefits it recovers.
Hypothetical Example:
- Total third-party settlement: $200,000
- Workers compensation benefits paid: $50,000
- Attorney fees (30% of recovery): $60,000
- Employers share of fees: ($50,000 ÷ $200,000) × $60,000 = $15,000
- Reimbursement to employer: $50,000 $15,000 = $35,000
- Net amount to you: $200,000 $35,000 = $165,000
In practice, injured workers and their attorneys often negotiate with the carrier to reduce the lien, especially for future medical benefits or disputed charges. A successful negotiation can increase the net amount you receive.
Helpful Hints
- Document All Payments: Keep detailed records of medical bills, wage benefits, and dates issued under workers comp.
- Request a Detailed Lien Statement: Ensure you understand exactly what the carrier paid and seeks to recover.
- Negotiate When Possible: Ask for discounts on future medical liens or disputed treatment charges.
- Allocate Attorney Fees Properly: Work with your attorney to apportion fees according to statute, reducing the amount owed on the lien.
- Maintain Copies of All Filings: Preserve settlement agreements, lien releases, and court orders.