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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney for guidance tailored to your situation.

When an injured worker in Massachusetts files a personal injury claim against a third party, any benefits paid by a workers’ compensation insurer create a lien against the recovery. Resolving that lien properly ensures you comply with Mass. Gen. Laws ch. 152, § 15, and avoid future disputes.

1. Identify the Workers’ Compensation Lien

   Review all benefits paid (medical and indemnity). Under M.G.L. c. 152, § 15, the insurer has a statutory right to recoup the greater of 25% of the recovery or the full amount paid.

2. Provide Timely Written Notice

   Massachusetts courts require notice to the workers’ compensation insurer before settlement. Send a detailed notice of the pending third-party action and proposed settlement terms.

3. Request Lien Amount and Documentation

   Ask the insurer for an itemized calculation of benefits paid and legal fees. Confirm whether any fees or costs reduce the recoverable amount under the statute.

4. Attempt Negotiation

   Many insurers will negotiate a reduction—especially on medical benefits—rather than enforce mechanical statutory offsets. Document any agreement in writing.

5. File a Petition to Determine the Lien with the Department of Industrial Accidents

   If you cannot reach an agreement, file a “Petition for Approval of Settlement” or a “Petition to Determine Lien” under 452 CMR 1. The Department of Industrial Accidents (DIA) will hold a hearing and issue an order setting the lien amount.

6. Set Funds Aside in Escrow or Court Registry

   Before completing your personal injury settlement or judgment, place the full lien amount in an escrow account or court registry. This protects all parties pending final lien resolution.

7. Disburse Funds and Obtain Release

   Once the lien is determined, issue payment directly to the workers’ compensation insurer. Obtain a written release or satisfaction of lien to prevent future claims.

8. Include Indemnification Clauses

   In your settlement agreement, require the third-party defendant to indemnify you for any additional lien claims. This shifts risk and protects your recovery.

9. Document Everything

   Keep copies of notices, agreements, DIA orders, escrow receipts, and releases. Clear records help resolve any later disputes.

Helpful Hints

• Start the lien process early to avoid settlement delays.
• Track all medical and wage-replacement benefits closely.
• Confirm deadlines for petitions with the DIA.
• Consider using a neutral escrow agent to hold lien funds.
• Review your fee agreements for attorney liens that may also apply.
• Consult a personal injury lawyer experienced in workers’ compensation subrogation.
• Keep the insurer’s contact information readily available.
• Review M.G.L. c. 152 updates annually to stay compliant.