Disclaimer: This article provides general information under West Virginia law. It is not legal advice.
Detailed Answer
Under West Virginia law, an employer or its workers’ compensation insurer can claim a lien on any third-party personal injury recovery. West Virginia Code §23-2-12 authorizes subrogation of benefits paid:
Example: Suppose Alice, a warehouse worker, suffers a back injury at work. Her employer’s insurer pays her medical bills and wage-loss benefits totaling $30,000. Later, Alice sues a negligent machine manufacturer and settles for $100,000. The workers’ compensation insurer has a lien for the $30,000 it paid.
The lien operates as follows:
- The insurer notifies the court or parties of its lien.
- The insurer may claim reimbursement from the gross settlement.
- West Virginia law allows the insurer to recover the full amount it paid, but courts may approve a lesser “reasonable” amount if fairness demands.
- The lien typically repays before the injured worker receives net proceeds.
- Parties often negotiate a reduced lien to avoid litigation over subrogation amounts.
Failure to address the lien can stall your settlement. Courts will not distribute funds until all valid liens resolve.
Helpful Hints
- Identify any workers’ compensation liens early in your case.
- Request a written statement of lien amount from the insurer.
- Review subrogation rights under W. Va. Code §23-2-12.
- Negotiate lien reductions when possible to increase net recovery.
- Allocate settlement funds to satisfy liens first, then attorney fees and costs.
- Use an escrow agreement to protect all parties during settlement.
- Consult a personal injury attorney experienced with workers’ compensation subrogation.