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Similar to Identifying and Pursuing 3rd Party Claims in Workers' Comp Cases
Similar to Identifying and Pursuing 3rd Party Claims in Workers' Comp Cases (20)
Identifying and Pursuing 3rd Party Claims in Workers' Comp Cases
- 8. Investigate and Document • Employer/Carrier usually have immediate knowledge of an accident; • Employer often owns the vehicle, product, machinery, or property where accident occurred; • Employer in good position to gather, document, and retain potentially relevant evidence; • Carrier has knowledge and experience in claims investigation;
- 9. Get Carrier to Think Like a Plaintiff’s Attorney! • Hire necessary experts; • In significant motor vehicle accidents or other types of cases where WC exposure is high; • Coordinate choosing an expert and sharing costs. • Get carrier to choose A PLAINTIFF’S EXPERT!
- 10. What Should Carrier/Expert Do? • Photograph/video/document scene of accident; • Document and preserve condition of any machines, products, vehicles; • If MVA, collect and retain all service/repair records for vehicle involved; • Get statements from ALL witnesses, not just co‐ workers
- 13. Heavy Truck Claims • Consider any time a commercial truck driver has an accident; • Even if only a one car accident; • Even if driver may have contributed.
- 14. Heavy Truck Product Defect Theories • PCFFF; • Crashworthiness; – Rollover/roof crush; – Occupant compartment intrusion; – Lack of emergency egress • Seat design and restraint system; • Underride
- 15. PCFFF
- 16. PCFFF Defect Theories • Tank rupture – too big, too weak; • Line failure – unprotected, poor materials; • Leaf spring failure – too close, not wrapped • Hostile Environment – tanks close to ignition source or sharp components
- 19. Underride
- 21. Potential Automotive Defects • Rollover/roof crush (usually an SUV); • PCFFF • Seat or Restraint Defect; • Crashworthiness; • Tire Failure
- 22. Roof Crush
- 23. Rollover
- 25. Seat Belt Defect • Spoolout; • Inertial unlatching; • False latch; • Pretensioner Defect
- 26. Tire Failure
- 28. Tire Claims Failures • Tread/belt separation; • Tire aging; • Tire Misplacement; • Valve stem defects.
- 29. PCFFF
- 30. Airbag Cases • Failure to Deploy; • Aggressive/premature deployment; • Late Deployment; • Lack of side airbags;
- 32. Other Potential Defects • Lack of ESC; • Park to Reverse; • Door unlatching.
- 34. Stored Energy
- 35. Machine Guarding
- 44. 3rd Party Logistics Companies • Manufacturing businesses often hire third party logistics companies to handle warehouse/forklift operations; • If a forklift or other injury occurs in an employer’s plant, see if they were employees of third party company; • Michelin, BMW, Sam’s all use.
- 47. Filing a 3rd Party Case • When to file 3rd Party Complaint? – Don’t wait for the WC claim to resolve; – WC and 3rd party attorneys work in conjunction • Include Loss of Consortium Claim • Timely file and serve S‐2 and S‐4 – Harsh penalties if not: Callahan v. Beaufort Cty. (Court left open whether dismissal without prejudice and refiling with S‐2 prevents election of remedies) • Do NOT settle third party case while WC claim is pending without explicit confirmation that Claimant has not elected his remedies.
- 49. Statutory Lien • 42‐1‐560(b): the carrier’s lien is to the extent of the total amount of compensation, including medical and other expenses, paid or to be paid by the carrier. • Request an itemization. • Review for payments to NCM’s, P.I.’s, or DME’s. • Do the math yourselves.
- 50. Breeden and Future Medicals “The Clincher Enforcement Act” • Lien includes only those medical expenses paid or accrued but not yet paid at the time of the third party settlement, and does not include future medical expenses. • Future medicals are to be included in the fund designated to pay future compensation benefits under subsection (g).
- 51. Breeden and Future Medicals • What does this mean for the third party case? • For your client to receive any benefit from the third party case, they usually must clincher or waive her right to future medicals. • Waiver or clincher of future medicals potentially implicates Medicare and may require a MSA.
- 52. Breeden as a Sword • Don’t underestimate carrier’s desire to close a file and cap exposure; • If 3rd party case has high TCD, but disputed liability or weak causation; • Threaten loss at trial – no repayment of lien, plaintiff still gets lifetime meds
- 53. Capping Breeden Exposure • 3rd party companies will by carrier’s lifetime medical obligation for a fixed cost; • Breeden medicals then become part of existing lien; • Negotiate resolution of lien, Plaintiff still gets lifetime meds paid by 3rd party contracting company; • No need for MSA
- 54. Mediation • Excellent method to resolve 3rd party case and workers’ compensation claim/lien • Choose mediator familiar with workers’ compensation law/liens • Now Mandatory on Lien Reduction Cases.
- 55. Mediation – All Hands on Deck • 3rd party defendants and adjusters; • WC Claimant attorney; • WC Defense attorney and subrogation adjuster; • Structured settlement broker; • MSA proposal
- 56. Diminish Expectations • Make sure clients understand WC lien will be paid out of 3rd party proceeds; • If Client receiving lifetime meds, discuss effects of continuing to receive benefits after resolution of 3rd party case v. clinchering meds; • Do not wait until the day of mediation to explain this to your client.
- 57. Posture of the WC Claim • Ongoing WC claim with no indemnity award, clincher, or future medicals awarded; • Clincher with no future medicals; • Indemnity award in place with lifetime medicals
- 58. Be Aware of Other Potential Liens • STD/LTD; • ERISA; • Always request the Plan Documents.
- 60. Potential Methods of Resolution • Apportion to Loss of Consortium claim; • Upfront negotiation on a sliding scale repayment of lien; • Statutory reduction formula ‐ Total cognizable damages (42‐1‐560(f)); • Equitable reduction or waiver when employer conduct contributed or WC defense IME hurts 3rd party case
- 61. Ongoing WC Claim • Consider two mediators; • Negotiate settlement of WC alongside third party case; • Negotiate waive if third party case has low value.
- 63. WC Lien and Lifetime Meds • Must clincher or waive right to lifetime meds for client to benefit from 3rd party case; • MSA may be required;
- 64. MSAs Funding Options • Carrier funds MSA and adds cost to lien; • Carrier funds MSA after lien repaid; • Client funds MSA using annuity or other structured settlement vehicle; • Client and Carrier jointly contribute to funding MSA. • Look at legal and economic benefits of each option with your particular case.
- 65. Settling 3rd Party Claim Without Resolving WC Lien • If settling for less than amount of WC lien, carrier can continue to prosecute 3rd party claim (42‐1‐560(f)); • File Petition to have WCC determine total cognizable damages and reduction of lien – Helpful in 3rd party cases with large damages but weak liability
- 68. Carrier Damages 3rd Party Case • Look any reason to justify a reduced repayment of lien; • Fault on part of employer in causing injury; • Employer/Carriers contribution to 3rd party defense; • Employer negative testimony, poorly timed surveillance • No decrease in Total Cognizable Damages, but reason for reduction
- 70. 1. Percentage of Settlement to TCD = 3rd Party Settlement / $TCD 2. Carrier Recovery = WC Lien x Line 1 % 3. Carrier Pro Rata Contribution to Attorneys’ Fees = Carrier Recovery x 33.3% 4. Carrier Pro Rata Contribution to Costs = 3rd Party Costs x Line 1 5. Net Payable to Carrier = Carrier Recovery – Pro Rata Fees – Pro Rata Costs (Line 2 – Line 3 – Line 4)
- 72. Lien Reduction Petition • Get affidavit from another attorney establishing TCD; • Go through the formula; • Cite reasons why reduction is equitable.