Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney for advice about your situation.
Detailed Answer
What Is a Workers’ Compensation Lien?
In Oklahoma, when an injured employee pursues a personal injury claim against a third party (for example, a negligent driver), the employer or its insurer has a right to recover the benefits it paid under the Workers’ Compensation Act. This right creates a lien on any settlement or judgment the employee obtains.
Oklahoma Statutes Governing Workers’ Compensation Liens
The primary statute is 85 O.S. § 172. It provides that an employer or its insurer is subrogated to the employee’s right of action against a third party and holds a lien for all compensation paid. The lien includes medical and disability benefits already disbursed.
How Liens Reduce Your Personal Injury Recovery
When you settle or win a jury verdict in a personal injury case, the worker’s compensation lien attaches to the gross recovery. Before you receive net proceeds, the employer or insurer can claim repayment of benefits paid. However, Oklahoma law requires that the lien share in attorney fees and litigation costs in proportion to the recovery.
Example:
- Your third-party settlement: $100,000.
- Workers’ comp benefits paid: $20,000.
- Attorney fees and costs in the personal injury case: $30,000.
- Ratio of lien to recovery: $20,000 ÷ $100,000 = 20%.
- Insurer’s share of fees and costs: 20% of $30,000 = $6,000.
- Adjusted lien: $20,000 − $6,000 = $14,000.
- Your net recovery: $100,000 − $14,000 = $86,000.
This calculation comes directly from the pro-rata allocation rule in 85 O.S. § 172.
Exceptions and Dispute Resolution
If you believe the lien is excessive or improperly calculated, you can petition the Oklahoma Workers’ Compensation Commission to adjust or reduce the lien. Common dispute points include whether all benefits qualify for reimbursement and the correct share of fees and costs.
Negotiating or Reducing Liens
Parties sometimes negotiate a compromise to reduce the lien amount. Factors include:
- Unreimbursed medical expenses that exceed the lien.
- Potential exposure to litigation risks if the insurer enforces its full lien.
- Strength of your personal injury claim and urgency for settlement.
Helpful Hints
- Keep detailed records of all workers’ compensation benefits paid.
- Ask your personal injury attorney to calculate the pro-rata share of fees and costs for the lien.
- Consider early negotiation with the insurer to reduce or waive part of the lien.
- File a dispute with the Workers’ Compensation Commission if the lien seems incorrect.
- Understand that pursuing both claims efficiently can maximize your net recovery.