Worker's Compensation Liens On Third-Party Personal Injury Recoveries
Metro Detroit Personal Injury Lawyer
Imagine this scenario: Amy is a sales representative for Company ABC and regularly makes sales calls to various businesses. While visiting Company XYZ, she slips and falls in the parking lot (owned by XYZ) as a result of a dangerous condition on the property. Since Amy was working at the time of the incident, she would be entitled to worker’s compensation benefits for her wage loss and medical expenses. However, since she was injured on the property of a third-party, she would also be entitled to bring a third-party action against the negligent premises owner.
If Amy were successful in receiving an award against the premises owner, what would happen to the benefits she received from her worker’s compensation carrier? Does she receive a double recovery i.e. does Amy get to keep benefits for lost wages and medical expenses from her worker’s compensation carrier and Company XYZ?
The Worker’s Disability Compensation Act states that when a recovery is made against a third-party (Company XYZ) as a result of personal injuries, the verdict or settlement shall first reimburse the employer or worker’s compensation carrier for benefits paid (after deducting expenses of recovery including attorney fees). The remaining balance is then paid to the injured employee (or his or her dependents or personal representative) and is considered an advance for any future worker’s compensation benefits. MCL 418.827(5).
Under MCL 418.827(6), the expenses of recovery is apportioned by the court between the injured party and the employer/carrier as each party’s interests appear at the time of recovery. For example, if the employer/carrier received $50,000 and the employee received $50,000, each would be responsible for one-half of the expenses (costs and attorney fees).
Credit For Future Worker's Compensation Benefits
Any balance of the tort recovery that the employee receives (the amount the employee receives exceeding the worker’s compensation benefits) is treated as an advance payment by the employer of any future benefits. MCL 418.827(5). The amount of the tort recovery that the employee receives is treated as a future credit. Even though the employer/carrier has a credit for future benefits, the employer/carrier must still reimburse the employee for his or her share of the recovery expenses. If the employee is no longer receiving benefits this provision is inapplicable.
Am I Required To Bring A Third-Party Claim?
No. In the above example, Amy is not required to bring a third-party lawsuit against XYZ. However, Amy’s failure to bring a lawsuit within one-year of the date of the accident means her employer/carrier can bring an action against Company XYZ to recoup benefits it paid to Amy. MCL 418.827(1). Whether it is Amy or her employer/carrier bringing the lawsuit against XYZ, each must notify the other (and any other relevant party) not less than 30 days before filing. Furthermore, if Amy does decide to bring a lawsuit, her employer/carrier has the right to join the lawsuit to ensure it’s interests are represented.
Worker’s Compensation Benefits & The Michigan No-Fault Benefits
What happens when a worker is injured in a car accident and both the Worker’s Disability Compensation Act and Michigan’s No-Fault Act apply? In this situation, worker’s compensation carrier provides primary coverage for first-party benefits. If the no-fault benefits would exceed worker’s compensation benefits, the injured worker can recover the remaining amount from the responsible no-fault carrier.
For instance, while worker’s compensation benefits provide unlimited medical coverage, the limits on wage loss benefits are lower than the no-fault limit. A person injured in a car accident while working would generally receive benefits for their medical expenses and wage loss through their worker’s compensation carrier. If he or she were a high-wage worker, he or she could receive no-fault benefits for wage loss in addition to the benefits provided by worker’s compensation.
Metro Detroit Injury Lawyers is a Bloomfield Hills, Michigan law firm practicing personal injury law. Contact us today at 248-430-8929 for a free consultation and evaluation of your personal injury case, with no obligation.