Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
Understanding Workers’ Compensation Subrogation in Wyoming
When you suffer a work-related injury in Wyoming, your employer’s insurer typically pays medical bills and lost wages under the Wyoming Workers’ Compensation Act. In exchange, the insurer gains a subrogation right. Under Wyo. Stat. Ann. § 27-14-503, the insurer may step into your shoes to recover those benefits from any third-party settlement or judgment you obtain.
Employer’s Lien and Priority
Wyoming law also grants a lien on third-party recoveries. Under Wyo. Stat. Ann. § 27-14-504, your employer or its insurer can assert a lien against money you recover from a negligent third party. The lien secures repayment of benefits already paid.
How Liens Affect Your Net Recovery
When you negotiate a settlement or win a jury verdict against a negligent third party, the gross recovery is subject to reduction for:
- Subrogation reimbursement: The insurer’s right to recoup paid benefits.
- Legal fees and costs: Your attorney’s fees generally follow a contingency agreement, often taken from the gross recovery before lien allocation.
Wyoming law requires you to allocate fees and costs before calculating the lien amount. The insurer may recover only its pro rata share of the net recovery after attorney fees and litigation expenses, unless you negotiate otherwise or the Wyoming Workers’ Safety and Compensation Division approves a different arrangement.
Commission Approval and Dispute Resolution
If you and the insurer disagree on lien amounts, you can petition the Wyoming Workers’ Safety and Compensation Division for a hearing. The Commission has authority to reduce the lien in the interest of justice or to encourage settlement. Filing a joint petition with the insurer often streamlines approval of allocation and disbursement of funds.
Hypothetical Example
Imagine you settle a third-party claim for $100,000. Your attorney’s contingency fee is 30% ($30,000), and costs total $5,000. The insurer paid $20,000 in benefits. After fees and costs, the net recovery is $65,000. The insurer’s pro rata share equals ($20,000 ÷ $100,000) × $65,000 = $13,000. You keep $52,000.
Helpful Hints
- Keep clear records of all workers’ compensation benefits paid.
- Review your contingency fee agreement to understand fee allocation before lien calculation.
- Consider early negotiation with the insurer to limit lien disputes.
- File for Commission approval of any settlement allocation to ensure enforceability.
- Consult a qualified personal injury attorney for tailored guidance.