Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
How Liens Arise Under North Dakota Law
Under N.D.C.C. § 65-05-03, an employer or its insurer that pays workers’ compensation benefits gains a lien on the injured employee’s third-party recovery. This lien allows the insurer to recoup benefits paid, including disability payments and approved medical expenses.
Calculating the Lien Amount
The lien equals the total compensation and medical costs already paid. For example, if your employer paid $15,000 in wage-loss benefits and $5,000 in medical bills, the lien would be $20,000. You must satisfy this lien from any personal injury settlement or judgment.
Impact on Net Recovery
The lien reduces your gross settlement. North Dakota courts follow N.D.C.C. § 65-05-13-02, which mandates a proportional allocation of attorney fees and costs between the injured worker and the insurer’s lien. Suppose you settle a claim for $100,000 and pay 30% in attorney fees ($30,000). The remaining $70,000 distributes pro rata: 20% to the insurer’s $20,000 lien (about $14,000) and 80% to you (about $56,000).
Steps to Protect Your Interests
- Request a written, itemized lien statement from the workers’ compensation insurer.
- Verify all medical expenses listed are valid and related to the work injury.
- Negotiate a lien reduction, especially in cases of hardship or disputed charges.
- Ensure your attorney applies the pro rata fee-splitting method to preserve your recovery.
Helpful Hints
- Obtain the insurer’s lien details early in settlement talks.
- Check that medical bills in the lien match your personal injury expenses.
- Consider mediation with the insurer to resolve lien disputes.
- Keep clear records of all communications and benefits paid.
- Consult a personal injury attorney experienced with lien issues.