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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.

In Washington, when you receive workers’ compensation benefits and later pursue a personal injury claim against a third party, your employer’s insurer can assert a lien to recover the benefits it paid on your behalf. Under RCW 51.24.060, the insurer has subrogation rights against any settlement or judgment you obtain in a third-party case.

Here’s how the lien affects your personal injury settlement:

1. Gross vs. Net Recovery: The insurer’s lien attaches to the gross settlement before attorney fees and costs are deducted. Washington law requires that the employer’s insurer recover the full amount of benefits it paid, not just the net amount you receive (RCW 51.24.030).
2. Attorney Fee Allocation: Under RCW 51.24.070, attorney fees must be apportioned between you and the lien. Courts frequently calculate fees on the portion exceeding the lien to ensure the insurer does not benefit from your attorney’s work.
3. Negotiations and Reductions: Many insurers agree to reduce or waive part of the lien if you show that full enforcement would leave you with inadequate compensation. Factors include the strength of your third-party claim, litigation costs, and your future medical expenses.
4. Future Medical Benefits: If your workers’ compensation claim remains open, a lien may also attach to future third-party recoveries. You must stay in contact with the insurer to understand how future benefits might be affected.
5. Release Requirements: Before the insurer releases the lien, you must provide proof of your third-party settlement and an accounting of fees and costs. The insurer then issues a formal release or notice of satisfaction.

Helpful Hints

• Document all communications with the workers’ compensation insurer about the lien in writing.
• Review your settlement agreement to identify gross and net amounts clearly.
• Consider hiring an attorney experienced in Washington workers’ compensation subrogation.
• Ask the insurer for a lien breakdown showing principal, interest, and costs.
• Negotiate the lien early in settlement talks to avoid surprises at closing.
• Keep copies of all medical records and bills submitted to both insurers.
• Understand that failure to resolve the lien can delay your settlement distribution.