Detailed Answer
When an injured worker settles a third-party personal injury claim, North Dakota law grants the employer or insurer a statutory lien to recover workers’ compensation benefits paid. To verify and satisfy this lien, follow these steps:
- Identify the lien amount. Under NDCC §65-05-07, the insurer is subrogated to the employee’s rights and may recover all compensation paid. Request a written statement of benefits paid and projected liabilities from the insurer or adjuster. NDCC 65-05-07.
- Obtain a lien statement. Ask the insurer to prepare and sign a lien statement detailing payments, future medical expenses, and interest. This document sets the maximum lien amount the employer can claim.
- Review settlement documents. Carefully examine the proposed third-party settlement agreement and release. Confirm that the settlement allocates funds for medical costs, lost wages, pain and suffering, and other damages.
- Send notice to all parties. Provide the lien statement and settlement draft to the insurer, the employee’s counsel, and the third-party adjuster. Ensure all parties receive notice in accordance with North Dakota Industrial Commission practice rules.
- Negotiate the lien. Evaluate whether the insurer’s lien is proportional to the settlement allocation. Negotiate reasonable reductions for attorney fees, litigation costs, and case risk.
- Seek Industrial Commission approval. Under NDCC §65-05-19, petition the North Dakota Industrial Commission to approve the lien amount and settlement allocation. Submit a stipulation that itemizes the net recovery to the employee. NDCC 65-05-19.
- Fund the lien. Once the Commission issues its order, deposit the lien amount into escrow or pay the insurer directly. Obtain a release of lien from the insurer or a closing order from the Commission.
- Finalize distribution. After lien satisfaction, distribute the remaining settlement funds according to the agreed allocation. File a closing statement with the Commission to confirm resolution of the lien.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance on your specific situation.
Helpful Hints
- Note NDCC deadlines: Petition for lien approval typically must be filed within 60 days of settling a third-party claim.
- Include all stakeholders (insurer, counsel, adjuster) in written communications to avoid disputes.
- Maintain detailed records of benefit payments and correspondence with the insurer.
- Visit the North Dakota Industrial Commission’s website for required forms and filing instructions.
- Consider retaining counsel experienced in workers’ compensation subrogation to protect your recovery.