Detailed Answer
In Vermont, if you receive workers’ compensation benefits and later pursue a third-party personal injury claim (for example, against a negligent driver), your employer’s insurer may assert a lien to recover benefits paid. Under 21 V.S.A. § 640, the insurer can claim reimbursement for medical costs, wage replacements and other benefits it provided. The lien must be filed within one year after you settle or obtain a judgment. 21 V.S.A. § 640
The key calculation hinges on your net recovery, not the gross settlement. Vermont law permits the insurer to recover only from funds remaining after attorneys’ fees and litigation costs. For example, if you settle for $100,000, and legal fees and costs total $35,000, the net recovery is $65,000. If you received $20,000 in workers’ comp benefits, the insurer can claim up to $20,000 from that net amount, leaving you with $45,000.
If multiple benefits streams exist (e.g., medical and wage losses), the insurer apportions its lien among them but cannot exceed the total net recovery. You or your attorney can negotiate the lien’s amount or timing as part of the settlement process to maximize your share.
Disclaimer
This information is provided for educational purposes only and does not constitute legal advice. Consult a qualified attorney in Vermont to discuss your specific situation.
Helpful Hints
- Track all compensation benefits and dates paid by your employer’s insurer.
- Retain detailed billing records for medical treatment; these determine lien amounts.
- Calculate net recovery by subtracting attorneys’ fees and case expenses from the settlement.
- Ensure the insurer files its lien within one year of settlement or judgment per 21 V.S.A. § 640.
- Discuss lien negotiation strategies with your personal injury attorney early in your case.