Workers’ Compensation Liens and Personal Injury Settlements in Utah
Disclaimer: This information is for educational purposes and does not constitute legal advice.
When an employee suffers a work-related injury, Utah’s workers’ compensation system covers medical expenses and partial wage loss. If another party contributed to the injury, you may pursue a personal injury claim. In that case, the workers’ compensation insurer holds a lien on any settlement or judgment to recover benefits it paid.
How the Lien Works
Under Utah Code § 34A-2-407, insurers have a statutory right to reimbursement. The lien attaches to medical benefits and wage-loss payments tied to the injury. You or your attorney must notify the workers’ compensation carrier of any third-party claim and set aside settlement funds for the lien.
Calculating the Lien Amount
The insurer’s claim generally equals the total benefits it paid, minus a proportional share of attorney fees and costs. Utah follows the “made whole” principle: you must first recover enough to cover your expenses before the lien applies in full. Insurers often negotiate discounts to expedite settlement.
Notice and Timing Requirements
Utah law requires timely notice to preserve lien rights. You must inform the carrier when you file a personal injury lawsuit or start settlement talks. Failure to provide proper notice can limit or eliminate the insurer’s lien claim.
Allocating Your Settlement
A typical settlement divides into categories: past and future medical costs, lost wages, pain and suffering, and punitive damages. Liens generally attach only to medical and wage-loss categories. Careful allocation can protect non-compensatory damages from subrogation.
Resolving Lien Disputes
If you and the insurer disagree on the lien amount, you can ask a workers’ compensation judge to adjudicate under the Utah Labor Commission’s procedures. A judge may reduce the lien if enforcing it in full would cause an unjust result.
Next Steps
Before finalizing any settlement, review the workers’ compensation lien thoroughly. Confirm the amount, negotiate any discount, and ensure your net recovery covers outstanding costs while preserving compensation for pain and suffering.
Helpful Hints
- Provide early notice to the workers’ compensation carrier once you pursue a third-party claim.
- Review benefit records to verify the lien amount.
- Structure settlement categories to protect non-lienable damages.
- Consider mediation or a lien hearing for disputes.
- Keep detailed documentation of medical treatment and wage-loss benefits.