Detailed Answer
When you settle a personal injury claim in Wisconsin after a work-related accident, your workers’ compensation insurer has a right to recover the benefits it paid on your behalf. That right is called a lien or subrogation claim. Understanding this process helps you negotiate a fair net recovery.
What Is a Workers’ Compensation Lien?
A workers’ compensation lien allows your employer’s insurer to recoup medical expenses and wage benefits it paid under Wisconsin’s workers’ compensation system. Without subrogation, employees could receive duplicate compensation for the same injury.
Statutory Framework in Wisconsin
Wisconsin’s subrogation rules appear in Wis. Stat. § 102.29. Key points include:
- The insurer may claim reimbursement from any recovery you obtain from a third party.
- Your attorney’s fees and litigation costs are deducted proportionally from the insurer’s reimbursement amount.
- Non-economic damages such as pain and suffering generally fall outside the lien.
Impact on Personal Injury Settlements
When you reach a settlement with a third-party tortfeasor (for example, a negligent driver), you and your attorney typically allocate the settlement into categories:
- Medical expenses (subject to lien).
- Lost wages (subject to lien).
- Pain and suffering (not subject to lien).
The workers’ compensation insurer then submits a lien amount. From the settlement fund, the insurer’s reimbursement comes off the top for the subrogated categories, less its share of attorney fees and costs. You keep the remainder, including your non-economic damages.
Key Steps in the Process
- Notify the workers’ compensation insurer that you have a third-party claim.
- Estimate your total recovery and allocate it among damage categories.
- Request a lien statement from the insurer showing benefits paid.
- Negotiate the insurer’s reimbursement amount if necessary.
- Obtain court approval or file a stipulation with the workers’ compensation division before disbursing funds.
Disclaimer: This article is for general informational purposes and does not constitute legal advice. Consult a qualified attorney about your specific situation.
Helpful Hints
- Begin lien discussions early to avoid delays in settlement.
- Keep detailed records of all workers’ comp benefits paid.
- Separate economic and non-economic damages clearly in your settlement documents.
- Confirm how attorney fees will be apportioned against the insurer’s lien.
- File any necessary lien waivers or stipulations promptly with the compensation division.