Detailed Answer
In Mississippi, when a worker suffers an injury caused by a third party and receives workers’ compensation benefits, the employer or its insurer gains a statutory lien against any judgment or settlement recovered from that third party. Verifying and satisfying this lien involves several steps under Mississippi Code Section 71-3-37 (Miss. Code Ann. § 71-3-37).
Step 1: Identify Third-Party Liability
From the outset of the claim, assess whether a negligent third party—such as a contractor, product manufacturer, motorist, or property owner—contributed to the workplace injury. Document potential defendants and preserve evidence early.
Step 2: Provide Timely Notice
Mississippi law does not require formal notice to preserve the lien, but to avoid surprises, send written notice of your third-party action, along with the complaint or demand letter, to the employer or its insurer at the start of litigation.
Step 3: Calculate and Verify the Lien Amount
Under Miss. Code Ann. § 71-3-37(5), the lien equals the total compensation paid or owed for medical care and wage replacement. Request an itemized statement from the insurer detailing past medical payments, past indemnity (wage replacement) payments, and any future medical benefits authorized. Review and confirm the figures. Exclude any payments unrelated to the third-party claim.
Step 4: Account for Attorney Fees and Costs
Mississippi courts typically reduce the lien by the claimant’s pro rata share of attorney fees and litigation costs. Plan to negotiate the lien amount by deducting a reasonable percentage for legal expenses, in line with Miss. Code Ann. § 71-3-37(5).
Step 5: Resolve Disputes or Seek Court Determination
If you cannot agree on the lien amount, a circuit court hearing may be necessary to determine a fair reduction. Present the insurer’s lien statement and your fee calculations as evidence.
Step 6: Satisfy the Lien
Upon settlement or verdict, allocate the net proceeds to pay the verified lien. Issue payment directly to the insurer or employer within the agreed timeframe. Finally, file a satisfaction of lien or release document with the court to clear the encumbrance.
Disclaimer: This article provides general information about Mississippi law and is not legal advice. Consult an attorney for guidance on your specific situation.
Helpful Hints
- Preserve evidence early—photographs and witness statements strengthen third-party claims.
- Request a detailed lien statement from the insurer before settlement negotiations.
- Keep clear records of all correspondence with the workers’ compensation carrier.
- Factor lien negotiation into your settlement budget and timeline.
- File the satisfaction of lien promptly after payment to avoid post-settlement disputes.