Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Detailed Answer
When you settle a personal injury case and a Washington workers’ compensation insurer has paid benefits, the insurer gains a lien against your recovery. You must verify the lien’s validity and satisfy it to avoid post-settlement disputes. Below are the steps under Washington law (RCW Title 51).
1. Confirm the Lien Filing
Under RCW 51.24.020, the insurer must file a lien claim within 90 days after its last payment of compensation or medical benefits. Verify the filing by checking the Department of Labor & Industries (L&I) online records or by requesting the lien notice directly from the insurer.
2. Request a Lien Statement
Under RCW 51.24.030, the insurer must serve all parties with a detailed statement of the claimed amount. This statement should itemize medical costs, disability benefits, penalties, and any accrued interest.
3. Review and Audit the Amount
Carefully review the insurer’s statement. Ensure it applies the correct interest rate and excludes any overpayment. You may request supporting documentation—such as medical invoices and payment records—to audit the lien calculation.
4. Negotiate the Lien Amount
After verifying the lien’s accuracy, negotiate with the insurer. In many cases, you can reduce the lien by allocating attorney fees and litigation costs, or by challenging any non-recoverable benefits under RCW 51.24.020.
5. Obtain Court or Mediator Approval
Include the agreed lien amount in your settlement documents. Seek approval from the court or mediator to direct payment to the insurer. A formal stipulation or order prevents future challenges to the settlement allocation.
6. Disburse Settlement Funds
Pay the insurer directly from escrow or your client trust account. Provide proof of payment to all parties and retain records to prevent future disputes.
Helpful Hints
- Keep detailed records of all communications with the insurer.
- Verify the lien filing deadline to spot any time-barred claims.
- Confirm which benefits are exempt from subrogation under Washington law.
- Use a structured settlement to manage large payments over time.
- Consult an attorney before finalizing any settlement to protect your rights.
References: RCW 51.24.020, RCW 51.24.030