Detailed Answer
When an employee in South Carolina suffers a work‐related injury, they often receive workers’ compensation benefits for medical care and lost wages. If a negligent third party caused the injury, the employee can file a separate personal injury lawsuit. However, the workers’ compensation insurer has a legal right to reimbursement—known as a subrogation lien—on any recovery from that third‐party claim.
Under South Carolina law, specifically SC Code Ann. § 42-15-30 (link), the insurer is subrogated to the employee’s cause of action against the third party. This means the insurer can claim back the benefits it paid. Importantly, the statute requires that the insurer’s lien be reduced by the proportionate share of attorney’s fees and litigation costs incurred in obtaining the recovery.
Here’s how it works in practice: suppose you obtain a $100,000 settlement. Your workers’ compensation carrier paid $20,000 in benefits. Your attorney’s fee for the third‐party case is 33.3% (or $33,333) plus any court costs. The carrier’s share of fees is calculated proportionally: ($33,333 ÷ $100,000) × $20,000 ≈ $6,667. The carrier’s net lien is therefore $20,000 – $6,667 = $13,333. You keep the remaining funds.
Accurate lien calculations and clear allocation of settlement proceeds between medical expenses, lost wages, and general damages can reduce disputes and maximize your net recovery.
Helpful Hints
- Document all workers’ compensation benefits paid, including medical bills and indemnity payments.
- Request a written lien statement from the insurer early in negotiations.
- Negotiate lien reductions or set‐offs when possible before finalizing the settlement.
- Allocate settlement proceeds clearly among medical expenses, lost wages, and pain‐and‐suffering.
- Verify the insurer’s lien calculation and challenge any unsupported charges.
- Consult with an attorney experienced in South Carolina subrogation law to review settlement drafts.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney in South Carolina regarding your specific situation.