Third Party Negligence Lawsuits can Benefit both the Injured Worker and the Employer

Workers' Compensation Uninsured Employers

Often times the first thought that employees have after suffering an on the job injury is whether their injury will cause them to be looked upon negatively by their employer.  It is common knowledge that an injury that requires medical treatment and lost time from work will cost the employer money, both by way of lost productivity and increased workers’ compensation premiums.  When an employee is injured on the job and requires more than six calendar days of disability from work, or requires medical treatment, shall be entitled to workers’ compensation benefits that compensate the injured worker for the lost time and medical treatment. These benefits are typically paid for by the employer’s workers’ compensation insurer, but may be paid directly by the employer themselves if they qualify for “self- insured” status.  Once an employer’s workers’ compensation insurer has paid benefits to a Massachusetts’ injured worker, that insurer will then subject the employer to an insurance premium adjustment based on cost incurred by the insurance company.  This adjustment typically passes some or all of the cost of the injured workers’ compensation claim from the insurance company back down to the employer.  Because workplace injuries can cause an employer to incur a substantial cost, often times injured workers may be reluctant to report injuries or seek medical treatment out of fear that they may alienate their employer or be terminated.

Although Massachusetts workers’ compensation benefits are limited in that they only provide a partial wage replacement benefits to the injured worker (and does not provide any compensation for pain and suffering), they may be costly to the employer and have an impact on the employer’s ability to conduct business.  There is a possible way for the injured worker to receive a significant increase in his financial recovery due to the work injury, while at the same time having his employer’s workers’ compensation insurance premium adjusted (which therefore pays back the employer a significant amount of the money that they had to pay after their insurance company modified their premiums due to the workers’ compensation benefits being paid).  Massachusetts General Laws, Chapter 152, Section 15 allows an injured worker to bring a lawsuit against a third party whose negligence caused the workplace injury (and the resulting disability from work and need for medical treatment).  Third party negligence claims allow an injured worker to pursue compensation for 100% of their wage loss (both past and future), 100% cost of medical treatment, and compensation for pain and suffering.  The possible financial recovery for an injured worker in a third party negligence claim is typically far greater than the recovery allowed in a straight workers’ compensation claim.  In the event that the injured worker is able to receive compensation from a negligent third party, the injured workers’ employers’ workers’ compensation insurer shall be paid back a percentage of any money they paid in workers’ compensation benefits to the injured worker.  This is typically referred to as the “workers’ compensation lien” on the personal injury lawsuit filed against the negligent third party.   M.G.L.A. Chapter 152, Section 53A(4) mandates that a workers’ compensation insurer who recovers previously paid workers’ compensation benefits from a negligent third party must file a revised report to the insurance bureau within 60 days of its recovery, the purpose of which is so that the Commissioner of Insurance can review and adjust the employer’s insurance premium accordingly.

In summary, if a negligent third party can be identified, the filing of and settlement of a third party negligence lawsuit arising out of a work injury can benefit both the injured worker and the employer.  The laws that apply to third party lawsuits, the worker’s compensation insurer’s ability to recover its lien on the third party lawsuit, and the employer’s right to premium modification are very tricky and should only be navigated by an experienced workers’ compensation and personal injury lawyers.  Our firm has extensive experience in this complicated area of the law, and is able to coordinate all benefits that are available to injured workers in a way that maximizes the compensation received by the injured worker and their family members.