Disclaimer: This article is for educational purposes only and does not constitute legal advice. Always consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When an employee who suffered a work-related injury also pursues a personal injury lawsuit against a third party, the employer or its insurer often has a statutory right to recoup workers’ compensation benefits paid. In Connecticut, that right is known as a workers’ compensation lien. Here’s how it typically works under Connecticut law (Conn. Gen. Stat. § 31-293):
- Establishing the Lien: After paying benefits for medical costs or lost wages, the employer/insurer can file a lien on any recovery you secure from a third-party claim. See Conn. Gen. Stat. § 31-293(a) (link).
- Calculating the Lien Amount: The lien covers all sums the insurer paid, including medical bills, indemnity benefits, and certain expenses. It may also include interest accrued since payment.
- Attorney’s Fees Allocation: Under the Miller-Driscoll rule (Miller v. Driscoll, 191 Conn. 260 (1983)), you and your attorney negotiate a fee-sharing agreement that allocates fees between the workers’ compensation lien and your personal recovery. Proper allocation can reduce the net lien amount, because your attorney’s fees are prorated against the entire recovery.
- Negotiating or Challenging the Lien: You may petition the Workers’ Compensation Commission to adjust a lien amount if you believe it’s excessive. Often, parties negotiate a reduced lump-sum payoff to resolve the lien.
- Impact on Net Recovery: Suppose you settle your personal injury claim for $100,000. If the workers’ compensation insurer paid $20,000 in benefits and the lien is upheld in full, you owe $20,000 back. If attorney’s fees are 30% of the total recovery ($30,000), and you allocate those fees proportionally (30% of the lien), the insurer’s net lien becomes $14,000 ($20,000 minus $6,000). You’d net $100,000 – $30,000 (fees) – $14,000 (lien) = $56,000.
Key takeaways under Connecticut law:
- A workers’ compensation lien reduces your personal injury recovery by the benefits paid.
- Proper fee allocation under Miller-Driscoll can lower the insurer’s net lien.
- You can negotiate or seek Commission review to adjust an alleged excessive lien.
Helpful Hints
- Notify your workers’ compensation insurer and your personal injury attorney of each other’s involvement early.
- Review the exact lien amount before settlement negotiations.
- Discuss fee allocation strategies under Miller-Driscoll with your attorney.
- Consider petitioning the Workers’ Compensation Commission if the lien seems inflated.
- Keep detailed records of all benefits paid and related expenses.