At the Intersection of Lost Limbs and Lost Wages: A Workers’ Compensation Subrogation Story
Why is my hair on fire, you may ask? Easy answer: we have 50 states and D.C. all with their own and distinctive workers’ compensation statutes and case law; and all 51 jurisdictions are adamant on interpreting these laws in their own special way.
If that doesn’t resolve your curiosity about the flames where the frosted tips should be (hey, I’m a child of the 90’s, blonde tips make everything better), please allow me to introduce myself, and try to explain what I do for a living.
So, what exactly is the practice of Workers’ Compensation Subrogation? The answer is long and complex, and it is probably easier to explain what Workers’ Compensation Subrogation is not. Workers’ Compensation Subrogation is not the practice of workers’ compensation law. Specifically, we do not represent injured workers seeking benefits or defending workers’ compensation insurance carriers on these claims.
Workers’ Compensation Subrogation attorneys do recover liens for their clients; liens that are created by the payment of workers’ compensation medical bills and lost wages. Workers’ Compensation Subrogation attorneys investigate the potential liability of third parties outside of the employer/employee relationship, make sure critical evidence is preserved, retain qualified experts to assist in the investigation and formulate theories of recovery to help recover our clients’ liens. Recovery oftentimes requires direct litigation and working with third party and workers’ compensation attorneys to secure the best results.
Workers’ Compensation Subrogation attorneys are the gatekeepers of the bar against double recoveries; we represent insurance carriers who pay for work injuries without regard to fault. Workers’ compensation insurance protects injured workers and their families, because they collect benefits without waiting for a lawsuit to resolve or fault to be assigned. We then investigate the loss to determine if it was the responsibility of a third party. If it is, we pursue the third parties responsible for the loss. If a workers’ compensation subrogation recovery is made, workers’ compensation insurance premiums (“MODS”) are affected in a positive way. This, in turn, can lead to more manufacturing and an expanded workforce. It’s a win – win.
One recent example of our work involved a steel manufacturer who bought new heating cauldrons from a China based company. The cauldrons were designed to speed up steel alloy melting. A few months after delivery, one of the cauldrons exploded, causing devastating inhalation injuries to the worker who inhaled molten metal during the explosion. In this circumstance, our job was to work with the insured company to preserve evidence, travel to the scene to inspect the preserved evidence with an expert, develop a theory of liability, and then, analyze whether the theory of recovery is legally and financially viable. If it is, we may bring suit directly, or work with a personal injury attorney who sues on behalf of the injured worker.
If this sounds easy or straight forward, it’s not. No two cases are the same. Each new loss reminds us that chaos theory is alive and well – small changes in facts and law between claims with similar fact patterns, will often lead to starkly different results. We must understand each jurisdiction individually; what is actionable there, how any nuances in the workers’ compensation statute will affect our lien rights, how expensive and lengthy litigation is likely to be, and what a given personal injury case may be worth in the area.
One of the greatest challenges presented by workers’ compensation subrogation practice is juggling the multiple interests of the numerous parties to every claim, while working to affect the best possible outcome for our clients. For example:
- Our clients and their insured businesses have an interest in seeking their lien recovery but also have an interest in the injured worker’s personal injury recovery. Generally, a worker’s recovery, depending on relevant state law, decreases the carrier’s and employer’s liability for payment of future benefits. This is a delicate balancing act, requiring knowledge of the requisite jurisdictional law, a mastery of lien repayment and future credit calculations, as well as a nuanced understanding of our client’s ultimate goals for a claim.
- Injured workers themselves have an interest in maximizing recoveries from target defendants but may also allege their employer was negligent in causing their injury. Defendants may also allege employer fault. In many jurisdictions, employer negligence can reduce the amount of the lien an injured worker must repay. However, if an injured worker or defendant is successful, a liability defense for any third party sued may be created; if an accident is deemed to be solely the employer’s fault, there can be no third-party liability.
The above issues are but the tip of the iceberg on the myriads of issues confronted by Workers’ Compensation Subrogation attorneys in this niche area of the law. Each time you speak with an attorney aligned with a different party you must stay on guard and bear in mind what their ultimate goals will be, what to watch out for, and how to possibly work with or against them to ultimately create the best possible lien recovery outcome for our clients.
In other words, the smell of burning keratin is here to stay.
