Disclaimer: This article is for educational purposes and does not constitute legal advice.
Detailed Answer
Under Rhode Island law, an employer or its workers’ compensation insurer may assert a lien on any recovery you obtain from a third-party personal injury claim. Rhode Island General Laws § 28-33-17 and § 28-33-22 outline how to verify and satisfy this lien.
1. Identify and Confirm the Lien
First, verify whether your employer’s compensation carrier has paid benefits related to your injury. Review your claim file and benefit statements. Then confirm the carrier’s lien right under R.I. Gen. Laws § 28-33-17 and the recoupment rules under R.I. Gen. Laws § 28-33-22.
2. Notify the Insurer of Your Third-Party Claim
Provide written notice to the workers’ compensation insurer as soon as you file your third-party suit. Include a copy of your complaint or demand to ensure timely compliance. This notice triggers the insurer’s obligation to assert any lien and protects your right to a reduction.
3. Calculate the Lien Amount
Gather documents showing all compensation benefits paid—medical, temporary total disability, permanent partial disability—and any accrued interest. The lien generally equals the total benefits paid, plus allowed interest, but may exclude future medical benefits.
4. Demand Reimbursement and Allocation
Send a formal demand letter to the carrier detailing the lien calculation. Propose an allocation of the settlement proceeds between workers’ compensation and third-party damages (for example, apportioning medical vs. pain and suffering). Proper allocation may reduce the lien amount.
5. Negotiate and Reduce the Lien
Negotiate with the insurer to minimize duplication. Rhode Island courts often reduce liens to account for attorney fees and costs in recovering the settlement. Aim for a fair pro-rata reduction reflecting your legal expenses.
6. Obtain a Lien Release
After payment, secure a written release or satisfaction of lien from the insurer. This document confirms the lien is satisfied and clears any encumbrance on your settlement funds.
Include the lien satisfaction in your settlement agreement or court order. Retain all release paperwork for your records.
Helpful Hints
- Keep detailed records of all workers’ compensation benefits and communications.
- Include a clause in your settlement agreement allocating damages to minimize the lien.
- Work with your attorney to negotiate lien reductions for attorney fees and costs.
- Request a written lien waiver or release before disbursing settlement funds.
- Consult a Rhode Island workers’ compensation attorney for complex lien disputes.