Disclaimer: This article is for informational purposes and does not constitute legal advice.
Detailed Answer
Under Rhode Island law, an employer or its insurer may file a workers’ compensation lien against a personal injury settlement if the injury also resulted in workers’ compensation benefits. This right stems from the subrogation provisions in R.I. Gen. Laws § 28-33-16, which allow the insurer to be reimbursed for benefits paid when a third party is responsible for the worker’s injuries.
Statutory Basis
R.I. Gen. Laws § 28-33-16 requires employers to seek reimbursement for medical and indemnity benefits paid if the worker recovers damages from a third-party tortfeasor. The lien covers:
- Medical expenses (reasonable and necessary treatment costs).
- Indemnity benefits (wage loss payments).
Calculating the Lien
The lien amount equals the total workers’ compensation benefits paid, but it reduces proportionally if a settlement includes both work-related and non–work-related damages. Courts allocate funds to distinguish between elements such as pain and suffering (not subject to lien) and wage loss (subject to lien).
Notice and Timing
The insurer must provide written notice of its lien before the settlement. Parties often negotiate the lien amount before executing a release. If the insurer fails to timely assert its lien, it may lose the right to reimbursement under Rhode Island case law.
Impact on Settlement
A workers’ compensation lien reduces the net recovery a claimant receives. Attorneys typically negotiate a lien settlement or ask the court to determine a fair allocation. In many cases, claimants pay a percentage of the comp lien out of the gross settlement to cover attorney fees and costs.
Helpful Hints
- Review your settlement documents for lien language.
- Get a detailed lien statement from the insurer.
- Consult with a personal injury attorney early to address potential liens.
- Consider mediation to resolve lien disputes efficiently.
- Keep records of all compensation benefits paid.