Workers’ Compensation Subrogation

You just settled your personal injury lawsuit and now workers’ compensation is calling asking for its money back…can they do that?

Workers’ compensation is a “No Fault” system. If a worker is injured in the course and scope of his/her employment, benefits are provided. If the work injury occurs as a result of the negligence of someone who is not a co-worker, a personal injury claim can also be brought, allowing for a more full recovery of monetary damages, including compensation for pain and suffering. For example, a machine operator injured by a defective machine may recover workers’ compensation benefits against his own employer and also bring a third party liability personal injury claim against the manufacturer of the machine.

The interplay between workers’ compensation and personal injury can complicate matters. In the example above, the workers’ compensation insurer may try to recoup its workers’ compensation benefit payments from any settlement or court judgment received from the machine manufacturer. Georgia’s workers’ compensation subrogation statute, O.C.G.A. § 34-9-11.1, permits the workers’ compensation insurer to recoup its medical and weekly indemnity payments if it can prove that the injured workers has been “made whole” for all of his injuries, both economic (medical bills and wage loss) and non economic (pain and suffering). This statute even allows a workers’ compensation insurer to intervene in any personal injury lawsuit.

There are numerous strategies which can be used to minimize, or even entirely defeat, a workers’ compensation subrogation claim. Care must be given to the language used in any settlement documents releasing a personal injury claim. Georgia courts have denied subrogation claims when the release did not specify the amounts attributed to medical expenses, lost wages, pain and suffering, or a spouse’s loss of consortium claim. A recitation in the settlement documents that the settlement sum is not meant to be complete compensation can also be helpful. Further, be mindful that workers’ compensation subrogation claims cannot be made against automobile uninsured motorist benefit recoveries. Stewart v. Auto Owners Insurance Company. In the event a valid workers’ compensation subrogation claim is asserted, it can be reduced through negotiations, including an offset for the workers’ compensation insurer’s pro-rata share of attorney’s fees and expenses of litigation.

The bottom line is that careful planning is needed to maximize recoveries from both workers’ compensation and third party personal injury claims.