Understanding Workers’ Compensation Liens in South Carolina
In South Carolina, if you receive workers’ compensation benefits and later recover against a third party in a personal injury claim, your employer or its workers’ compensation insurer may assert a lien under S.C. Code Ann. § 42-7-60. Resolving this lien properly ensures you receive your net recovery without future claims from the carrier.
Detailed Answer
Follow these steps to resolve a workers’ compensation lien on your personal injury claim:
- Provide Written Notice of Your Third-Party Claim
You must notify your employer and the workers’ compensation insurer in writing within 30 days after filing your personal injury lawsuit. This preserves the carrier’s subrogation rights. See S.C. Code Ann. § 42-15-20. - Request an Itemized Statement of Benefits Paid
Obtain a detailed breakdown of all medical and indemnity benefits the carrier has paid to date. This lets you calculate the exact lien amount. - Calculate the Carrier’s Subrogation Lien
Under S.C. Code Ann. § 42-7-60, the carrier is subrogated to the benefits paid. In South Carolina, courts allow an equitable apportionment of attorney’s fees and costs before satisfying the lien. - Negotiate Lien Reduction If Appropriate
Present your anticipated recovery, attorney’s fee agreement, and case expenses. Many carriers will agree to reduce the lien proportionally based on fees and costs. - Draft a Settlement and Lien Release Agreement
Specify the exact amounts allocated to you, your attorney, and the carrier. Obtain a written lien release or “no-lien” letter from the carrier before distributing funds. - File Any Necessary Court or Commission Papers
If you dispute the lien amount, you can petition the South Carolina Workers’ Compensation Commission to reserve settlement funds or determine lien rights. Visit SCWCC for procedures. - Secure Final Lien Release
After you pay the agreed lien amount, obtain a final, signed release from the carrier. Keep this document in your case file to avoid future claims.
Hypothetical Example
John Smith suffered a back injury in a work-related accident and received $12,000 in workers’ compensation benefits. Later, he sues a negligent third party and notifies his employer within 30 days. The carrier provides an itemized statement showing $12,000 paid. John’s attorney negotiates a 25% reduction for legal fees, yielding a lien of $9,000. When John settles his personal injury case for $100,000, his attorney disburses $9,000 to the carrier, secures a lien release, and John retains the remaining net proceeds.
Disclaimer: This article is for informational purposes and does not constitute legal advice. Consult a qualified attorney about your specific situation.
Helpful Hints
- Track all deadlines for written notice to preserve the carrier’s subrogation rights.
- Ask for an itemized benefits statement early to avoid last-minute disputes.
- Negotiate lien reductions by showing your attorney’s fees and case expenses.
- Obtain lien waivers in writing before you distribute settlement funds.
- Consider filing with the SC Workers’ Compensation Commission to resolve contested liens.