There are times when an injured worker can receive a personal injury settlement while still on Workers’ Compensation. Personal injury lawsuits can arise from machine malfunctions, Motor Vehicle Accidents and various other scenarios. Anytime someone is negligent, resulting in an injury to someone else, there is a good possibility a lawsuit will be brought against the negligent party.
It’s important to understand how a third-party settlement affects your Workers’ Compensation claim. The key here is “do not settle” until you are clear on the ramifications of settling. Many times, after receiving a personal injury settlement, your Workers’ Compensation carrier is entitled to a lien against your settlement. Additionally, injured workers must pay their attorneys. I recently ran into an injured worker who was devastated after receiving a 6 figure settlement. She was involved in a motor vehicle accident and likely will never return to work due to severe injuries. She had multiple surgeries and is on various prescription medications, including high doses of opiates. She ended up settling her personal injury lawsuit for $137,000 believing her Workers’ Compensation carrier would continue to pay her compensation payments and cover medical expenses. This was NOT the case.
First her attorney took his fee, then the insurance carrier enforced their liens rights. After the attorney fee and the insurance carrier’s lien the injured worker only received about $25,000. The insurance carrier cut the injured workers medical coverage and lowered her compensation payments. The injured worker then had to use her settlement money to cover her medical bills. Her medical expenses drained her settlement money in no time. She eventually ended up in a considerably worse position. Had she been aware of the outcome of taking the settlement, she could have made a much more advantageous decision.
The conclusion – make sure you do your research and know the pros and cons before settling your personal injury and Workers’ Compensation cases. It may be tempting to take the settlement, but don’t do it until you know exactly how it will affect your long-term outcome.