Detailed Answer
When you collect workers’ compensation benefits for a Mississippi workplace injury and then pursue a personal injury claim against a third party (for example, a negligent driver or defective product), your employer or its insurer has a statutory right to recover the amounts it paid on your behalf. This right—called a workers’ compensation lien—arises under Mississippi Code Ann. § 71-3-37. Miss. Code Ann. § 71-3-37.
Key points of how the lien works:
- Lien Amount: The employer can seek repayment of all compensation benefits paid plus certain expenses related to your claim (e.g., medical costs it advanced).
- Notice Requirements: You must notify your employer or its insurer promptly—typically when you file your third-party lawsuit. If the insurer fails to assert its lien within the required period, it may lose its right to reimbursement.
- Allocation of Fees and Costs: Mississippi law allows the employer to share in attorney fees and litigation costs tied to your third-party recovery. Parties often negotiate a pro-rata split of legal fees before settlement.
- Settlement Approval: Your third-party settlement typically must be approved by the Workers’ Compensation Commission if a lien is asserted. The Commission will confirm that the employer’s reimbursement claim aligns with statute and that you retain a fair net recovery.
- Impact on Your Net Recovery: The lien is applied against your gross settlement. First, attorneys’ fees and costs are apportioned (by agreement or by petition to the Commission). Next, the employer’s lien is paid from the remaining funds. You keep what remains.
Example Hypothetical:
Jane suffers a back injury at a warehouse. Her employer’s insurer pays $20,000 in comp benefits. Jane sues a negligent delivery driver and settles her third-party claim for $100,000. After negotiating a 30% attorney fee (or $30,000), Jane’s net settlement is $70,000. The insurer’s lien of $20,000 is then paid from that $70,000, leaving Jane with $50,000.
Because the lien attaches to the gross recovery, it cannot exceed the amount the employer paid in benefits and allowable expenses. If parties disagree over fee splits or lien amounts, they can ask the Workers’ Compensation Commission to resolve the dispute.
Additional Statutes to Consider:
- Subrogation remedies and procedural rules under Miss. Code Ann. § 71-3-37.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Helpful Hints
- Notify your employer’s insurer in writing as soon as you file a third-party suit.
- Keep clear records of all workers’ compensation benefits and medical expenses advanced.
- Discuss lien impact and fee allocation with your personal injury attorney early.
- Consider negotiating a lien reduction if repayment would leave you with minimal net recovery.
- If parties cannot agree on fee splits or lien amounts, file a petition with the Mississippi Workers’ Compensation Commission for guidance.