That worker has a right to proceed with both a workers’ compensation claim as well as a third-party lawsuit. However, the workers’ compensation insurer will have a lien on that third party recovery. The idea is workers shouldn’t be able to collect twice for the same injury. But to how much are employer insurers entitled?
The highest court in Massachusetts recently took on this question in a pair of two cases wherein lower courts had issued conflicting rulings. The cases were DiCarlo v. Suffolk Construction Co. and Martin v. Angelini Plastering Inc. The Massachusetts Supreme Judicial Court was asked to decide whether employer insurers are entitled to collect a lien on damages awarded for pain and suffering.
Now, it’s important to point out that workers’ compensation insurance does not provide coverage for pain and suffering. Although employees needn’t prove negligence by employer to collect workers’ compensation, they are only entitled to coverage of medical expenses and a portion of lost wages.
It is generally only through civil litigation against third parties that workers can collect damages for wrongs like pain and suffering, mental anguish, emotional harm, loss of consortium and, in some cases, punitive damages. Employees cannot sue their employers to collect these damages, per the principle of exclusive remedy.
In both the aforementioned cases, employees were injured at work and received workers’ compensation. Also in both cases, workers sought recovery from third-parties.
However in the DiCarlo case, the judge overseeing the third-party liability lawsuit rejected a settlement agreement because the insurer would not be allowed a lien on damages for pain and suffering. Worker, an electrician who injured his back on a construction site, had received $48,400 from workers’ compensation for medical expenses and another $233,300 for lost wages. He then pursued a tort action against the owner of the site as well as the contractor managing it, and was awarded $100,000 – with $35,000 of that for pain and suffering. This was the amount he sought to protect from the insurance lien. The judge reasoned the insurer’s lien attached to the entire recovery. Plaintiff appealed.
In Martin, plaintiff was an electrician injured at a construction site. Workers’ compensation insurance had paid $566,000 in benefits. He and his wife then filed a personal injury lawsuit against a subcontractor and a general manager. He was awarded $1 million in damages, with 35 percent of that allocated for pain and suffering. The judge approved a third-party liability settlement similar to the one rejected in the DiCarlo case. The insurance company appealed.
Both cases went to the appellate court, which determined employees’ awards for pain and suffering were exempt from insurer liens. The insurance companies both appealed, and the supreme judicial court combined the cases for argument.
The state high court agreed with the appeals court, finding insurers’ liens don’t extend to damages awarded to an employee for pain and suffering. So while workers do have to repay damages for medical bills and lost wages, their compensation for pain-and-suffering is free-and-clear of insurer liens.
If you have been injured at work, contact the Lee Law Offices at 800-887-1965.
DiCarlo v. Suffolk Construction Co. and Martin v. Angelini Plastering Inc., Feb. 12, 2016, Massachusetts Supreme Judicial Court
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Recent DOL Plan Identifies Work Safety Whistleblower Protections, Feb. 22, 2016, Asheville Workers’ Compensation Lawyer Blog