Detailed Answer: Oregon Workers’ Compensation Liens and Personal Injury Recovery
Under Oregon law, an insurer that pays workers’ compensation benefits has a lien on any third-party personal injury recovery. This lien ensures the insurer recovers benefits paid before you keep the remainder. The key statute is ORS 656.268.
What Is a Workers’ Compensation Lien?
A workers’ compensation lien gives the employer or insurer the right to recover benefits it paid if you later sue a negligent third party. Benefits include medical treatment costs, wage replacement, and disability payments.
How ORS 656.268 Governs Liens
ORS 656.268 states that an employer may recover the amount of compensation, medical or hospital benefits paid if you obtain damages from a third party. The lien reduces by the employer’s share of attorney fees and costs. See ORS 656.268.
Effect on Your Final Recovery
When you settle or win a judgment, you start with the gross recovery. Then deduct attorney fees and case costs. Oregon law splits those fees and costs between you and the insurer based on the ratio of benefits paid to total recovery. Finally, the insurer’s lien is reduced by its share of the fees and costs. The net amount is what you keep.
Hypothetical Example:
- Gross recovery: $100,000
- Workers’ comp benefits paid: $20,000 (20% of recovery)
- Attorney fees and costs: $30,000
- Insurer’s share of fees (20%): $6,000
- Net lien repayment: $20,000 − $6,000 = $14,000
- Net to you: $100,000 − $30,000 − $14,000 = $56,000
Helpful Hints
- Review ORS 656.268 to understand lien rights and obligations.
- Negotiate the allocation of damages to limit the lien on future medical needs.
- Ask your attorney to seek a lien reduction when possible.
- Document all workers’ compensation payments to verify the lien amount.
- Keep detailed records of legal fees and costs for accurate pro-rata calculations.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.