Detailed Answer
In Rhode Island, if you sustain a work-related injury and receive workers’ compensation benefits, your employer can claim a lien against any third-party personal injury recovery. This process, known as subrogation, ensures that the employer is reimbursed for benefits paid. Understanding how this lien works helps you estimate your net recovery.
1. Subrogation Rights Under Rhode Island Law
Rhode Island’s subrogation statutes R.I. Gen. Laws § 28-33-1 and § 28-33-2 grant employers the right to recover the lesser of:
- The total workers’ compensation benefits paid;
- The portion of your third-party recovery that represents wage loss;
- Medical expenses covered by workers’ compensation.
2. Impact on Your Settlement Amount
The employer’s lien reduces the gross settlement or verdict. After subtracting the lien, your attorneys’ fees (33%) and case expenses, you arrive at your net recovery. For example, if you recover $100,000, and the lien is $30,000, and you owe $33,333 in attorneys’ fees plus $5,000 in costs, your net amount is $31,667.
3. Allocating Attorneys’ Fees and Costs
Rhode Island courts often allocate attorneys’ fees proportionally across damage categories (medical vs. wage loss) (R.I. Gen. Laws § 28-33-3). This ensures fair reduction of the lien and fee award.
4. Negotiating or Challenging the Lien
You can negotiate lien reductions if medical fees were unreasonably high or if the employer’s recovery would leave you with little or no net amount. To dispute a lien, file a petition with the Rhode Island Workers’ Compensation Court.
5. Practical Steps
Retain counsel experienced in both workers’ compensation and personal injury. Early coordination helps optimize settlement structures and minimize liens.
Helpful Hints
- Track all workers’ compensation benefits and payment dates.
- Keep detailed medical records and billing statements.
- Consult an attorney before settling any third-party claim.
- Understand how fees and costs split across different damage categories.
- Consider mediation with your employer’s insurer to reduce the lien.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For advice tailored to your situation, consult a qualified attorney in Rhode Island.