How Much Does the Injured Worker Have to Pay Back ?
Does the Virginia Workers Comp lien consist of reimbursement in full ? If there is a requirement for a reduction, is it reduced by a specific percentage pursuant to statute ? The short answer is “no.”
The Virginia Code sets forth the specific procedure for determining how much must be paid back from a bodily injury settlement or verdict to the workers compensation insurance company, according to Herndon disability lawyer Doug Landau
Some think that there is an automatic 1/3 reduction, just like others think that a fair settlement in a car crash case is always there times the medical bills and lost wages. “Wrong on both counts,” according to Herndon Virginia workers comp lawyer Doug Landau. Virginia Code Section 65.2-309(A) provides that
“[a] claim against an employer . . . shall operate as an assignment to the employer of any right to recover damages which the injured employee . . . may have against any other party . . . , and such employer shall be subrogated to any such right.” In applying this statute, the courts have held that “the employee may not pursue his common law remedy in such a manner or settle his claim to the prejudice of the employer’s subrogation right.”
The purpose of the statute is to reimburse an employer (or, more likely, their compensation insurance company) who is compelled to pay compensation as a result of the negligence of a third party and to prevent an employee from obtaining a double recovery of funds.
In 1994, the General Assembly adopted Code Sec. 65.2-313. Acts 1994, ch. 586. As pertinent, the statute provides:
“In any action or claim for damages by an employee . . . against any person other than the employer under Sec. 65.2-310, . . . if a recovery is effected, the employer shall pay to the employee a percentage of each further entitlement as it is submitted equal to the ratio the total attorney’s fees and costs bear to the total third-party recovery until such time as the accrued post-recovery entitlement equals that sum which is the difference between the gross recovery and the employer’s compensation lien. In ordering payments under this section, the Commission shall take into account any apportionment made pursuant to Sec. 65.2-311. For the purposes of this section, ‘entitlement’ means compensation and expenses for medical, surgical and hospital attention and funeral expenses to which the claimant is entitled under the provisions of this title, which entitlements are related to the injury for which the third-party recovery was effected.”
This also includes ALL money paid under a settlement agreement.
So, if the workers comp carrier settles a comp claim, and THEN settles the third party bodily injury claim, the injured worker (or his family) has to pay the money back in the proportions set forth above. In tomorrow’s post, we will look at the interplay between the Circuit Court and the Virginia Workers Compensation Commission. If you or someone you know or care for has been injured as the result of an on the job accident AND it was the result of a car, truck, bicycle or motorcycle crash and there are questions about what laws apply, e-mail or call us at ABRAMS LANDAU, Ltd. (703-796-9555) at once.