If you were hurt at work, you could file a workers’ compensation claim. But you may also file a personal injury claim if a third party caused your injuries. In Virginia, workers’ compensation insurers have the right to be reimbursed from a third-party personal injury lawsuit for any benefits they paid. This right is called “subrogation,” outlined under Va. Code § 65.2-309.
When you receive workers’ compensation benefits after suffering a workplace accident and then pursue a personal injury claim against third parties at fault for the accident, you need to consult with a personal injury lawyer about your obligation to pay back workers’ compensation benefits. An attorney can help you maximize your financial recovery from workers’ comp and third-party personal injury claims.
For example, your lawyer can help you negotiate a settlement of your workers’ comp and third-party personal injury claims simultaneously. This may include reducing the employer’s or workers’ comp insurer’s lien on your third-party personal injury recovery.
When May I Receive Both Workers’ Comp and Personal Injury Compensation?
Workers’ compensation is typically an injured worker’s only remedy against their employer. But in some cases, an injured worker can pursue personal injury claims against third parties unaffiliated with the employer to recover compensation. Personal injury compensation provides some of the same financial benefits available under the workers’ compensation system, including costs of medical treatment and lost income.
For example, an employee in a motor vehicle accident while working can file a workers’ comp claim with their employer to pay for reasonably necessary treatment and partial lost wage replacement. The worker can also file an auto accident claim against the driver who caused the crash to seek compensation for medical and rehabilitation expenses, costs of long-term care for disabilities, and full reimbursement of lost income or future earning capacity.
What Is Subrogation?
When an injured worker receives compensation in a personal injury claim, their employer or workers’ compensation insurer usually has a right to subrogation. Subrogation entitles an employer or workers’ comp insurer to reimbursement of benefits they paid to an injured worker. The reimbursement money comes from a settlement or judgment the worker obtained in a personal injury claim for their work-related injuries. Alternatively, the employer or insurer can take credit against future workers’ comp benefits.
In some cases, the insurance company with the right of subrogation might take over the injured party’s personal injury claim against the third party. The insurer must hold any money that exceeds paid workers’ comp benefits and reasonable legal expenses incurred for the injured worker. The insurer must also get approval from the injured worker and the Virginia Workers’ Compensation Commission before settling a subrogated personal injury claim.
If the injured worker pursues a personal injury claim, they must provide their employer or workers’ compensation insurer with notice of the claim. The employer or insurer may also have the right to approve any proposed settlement of the third party.
Accident victims cannot obtain a “double recovery” for any loss they incur due to an accident. Subrogation ensures that an injured worker doesn’t receive medical benefits or lost wages from both workers’ comp and a personal injury claim. Through subrogation, the party at fault for injuring the worker – not the worker’s employer – bears financial liability for the worker’s losses.
Will I Have to Pay Back All of My Workers’ Compensation That Was Paid to Me?
Yes, except to the extent that your own insurance carrier paid you for your personal injury claim (i.e., uninsured or underinsured motorist coverage). To the extent that you must reimburse your employer or the workers’ comp insurer for past benefits, you may have several alternatives.
After recovering compensation from a third-party personal injury claim, you will first deduct your legal fees and expenses. Then at least some portion of the remaining amount will likely be used to pay back the workers’ comp benefits you received. In some circumstances, however, you would only need to reimburse the insurer on a pro rata basis from the personal injury recovery, but then your future workers’ comp benefits would be reduced on a pro rata basis until the full amount has been recouped.
Alternatively, you might reach a global settlement with your employer and the third party at fault for your work injury to settle both your workers’ comp and personal injury claims. With this option, your employer may receive a portion of your personal injury compensation in exchange for releasing you from any further liability for the workers’ compensation lien.
Is There a Statute of Limitations on Subrogation Claims in Virginia?
When an employer or workers’ comp insurer pursues a subrogation claim by taking on an injured worker’s third-party personal injury claim, they must follow the same statute of limitations that applies to the worker’s injury claim. Under Va. Code § 8.01-243, Virginia’s statute of limitations on injury claims requires filing a lawsuit within two years after the worker suffers an on-the-job injury due to a third party’s fault.
Va. Code § 65.2-310 also states that when an injured employee files a personal injury lawsuit against a third party, the court must first notify the employee and employer. They will then calculate the workers’ comp benefits paid by the employer or its insurer. After deducting the worker’s share of legal fees and expenses, they will require the liable third party to pay the employer out of the judgment.
Contact a Virginia Personal Injury Lawyer
When you’ve suffered an injury at work due to a third party’s negligence, you must understand your legal options for obtaining financial recovery from workers’ comp and a potential personal injury claim. To learn how personal injury compensation might affect your workers’ comp benefits, contact Marks & Harrison today for a free, no-obligation consultation and speak with a Virginia personal injury lawyer about your rights.
