Detailed Answer
When you receive workers’ compensation benefits for a job-related injury in New York, your employer’s insurer can claim a lien on any recovery you later obtain from a third party. This rule prevents double compensation and helps maintain the workers’ compensation system.
Statutory Basis
Under N.Y. Workers’ Compensation Law § 29, insurers have a right to reimbursement from third-party settlements, judgments, or awards. The lien amount equals the total benefits—medical payments, wage replacement, and disability—you already received.
Effect on Net Recovery
Before you get any funds from a personal injury settlement or verdict, the insurer’s lien reduces the gross recovery. For example, if you received $20,000 in workers’ comp benefits and later settle a slip-and-fall claim for $100,000, the insurer can recover $20,000. You then retain $80,000 before attorney fees and case costs.
Liens and Attorney Fees
New York personal injury attorneys typically charge about one-third of the gross recovery. Courts may prorate fees and costs between you and the insurer’s lien, which can slightly increase your net share.
Reducing the Lien
If your third-party recovery does not fully compensate you for all damages, you can petition to reduce the lien. File a petition under N.Y. Workers’ Compensation Law § 23. The Workers’ Compensation Board may adjust the lien to prevent undue hardship and ensure you receive fair compensation.
Helpful Hints
- Keep Detailed Records: Track all workers’ comp benefits paid and injury-related expenses.
- Consult Early: Inform your personal injury lawyer about any comp lien to plan budget and strategy.
- File a Lien Reduction Petition: If your recovery is limited, ask your attorney to file under § 23 to adjust the lien.
- Negotiate Pro Rata Fees: Request your attorney prorate fees and costs to protect your net recovery.
- Calculate Net vs. Gross: Always focus on your net recovery after liens and fees, not just the headline settlement.
Disclaimer: This article provides general information and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.