When you get hurt at work, you typically cannot sue your employer, but you may be able to sue third parties. Workers’ Compensation is no-fault, so your employer’s insurance carrier pays no matter who is at fault, but it will not cover all of your damages. This means you can file a third-party lawsuit to get the rest of your damages covered, but your initial Workers’ Comp case could affect the lawsuit.
First, you have to account for which damages Workers’ Comp covers and which a lawsuit would cover to see how much would be left to get in a lawsuit. You will have to be careful about how much you settle for and which case covers which damages. Second, you run into the issue of subrogation, where the Workers’ Comp insurance company can take back some of what they already paid you out of the winnings in your third-party lawsuit, reducing how much you pocket from the lawsuit.
For help with either or both parts of your case, call the Certified Pennsylvania Workers’ Compensation Lawyers at Cardamone Law at (267) 651-7945.
Damages in Workers’ Compensation vs. a Lawsuit
Typically, if you get hurt, you sue whoever hurt you. In that claim, you can get lost earnings, medical bills, and pain and suffering – a form of “non-economic” damages meant to pay you back for the experience of physical pain, emotional distress, mental anguish, etc.
However, you can’t sue your employer in most cases. That means work-related injuries often go through Workers’ Comp, especially if your injury was caused by you, a coworker, or your employer. These usually pay for 2/3 of your lost wages (subject to caps and floors), all of your medical expenses, and additional “specific loss” benefits for certain amputations, lost function, lost hearing/vision, and facial scarring cases.
If we compare these sets of damages, you can see that a lawsuit can recover extra damages that your Workers’ Comp claim would never recover, namely:
- Pain and suffering
- The unpaid lost earnings
- Other incidental expenses caused by the accident (e.g., property damage).
How Third-Party Claims Work After a Workers’ Comp Settlement
Let’s say you already got paid through Workers’ Comp, and they covered your medical bills, 2/3 of your lost wages, and extra benefits for a permanent amputation. This means you are still missing damages for pain and suffering at the least, plus the rest of your lost wages and other potential damages. If your injury was caused by a third party, you can still sue them.
Workers’ Comp only blocks employees from suing their employers, not other parties. Think, for example, of a work-related car accident: your employer might pay you through Workers’ Comp, but you still have a potential car accident lawsuit against the driver who hit you.
Our Pennsylvania work injury lawyers can help you file that third-party lawsuit to recover pain and suffering and other missing damages.
Why File a Third-Party Lawsuit if I Already Settled My Workers’ Comp Claim?
Because Workers’ Comp cannot cover pain and suffering, you are always missing potential damages by filing a Workers’ Comp case alone. If there is no third party to sue – e.g., if you or your employer caused your injuries – then you may be left with Workers’ Comp as your only option.
However, if a third party can be sued, then you can recover pain and suffering and other missing damages from them. Even once we factor in attorneys’ fees and subrogation – something we will discuss in a second – this still usually leaves you with additional money from the third-party lawsuit.
What is Subrogation?
As mentioned above, your Workers’ Comp case pays some damages, and your lawsuit pays all of those, plus additional damages. That means that the Workers’ Comp damages would be paid twice if you filed both a Workers’ Comp claim and a lawsuit. Getting paid twice isn’t usually allowed.
Subrogation allows your employer/their insurance carrier to take back some of what they already paid you when you recover it again from your lawsuit. This actually serves three purposes:
- It stops you from getting paid for the same damages twice.
- It stops your innocent employer from having to pay for something a third party did.
- It prevents the at-fault party from escaping payment just because your employer paid quicker.
The purpose here isn’t to take money back from you, but rather to take some of the winnings from your case and pay back what the insurance company already covered. In an ideal world, this leaves you with the same amount of money in your pocket either way – though in reality, it often means shorting the Workers’ Comp insurance carrier a bit if you cannot recover their full damages in your lawsuit.
How Much is Subrogation For?
Usually, the insurance carrier will put the full amount they paid into a subrogation claim. So, whatever the insurance company is allowed to collect from your third-party lawsuit will come out, and you will be left with the rest.
They cannot usually “take back” money they did not initially pay you, such as pain and suffering, so you should be able to keep all of that.
How is Subrogation Applied?
Subrogation is typically applied as a lien. This is essentially a placeholder that the employer or Workers’ Comp carrier puts on the money they pay you to say that if you do file a third-party claim, they get their cut back. It may also say that if you do not file a third-party claim, then you assign the right to sue to them so they can sue on your behalf to get their money back.
Can Workers’ Comp Insurance Carriers Use Subrogation Against My Settlement?
Whether your employer’s Workers’ Comp carrier pays you on an ongoing basis, settles part of the case, or settles your whole claim, subrogation usually still applies.
If they are paying money as you go, they have the authority to claw back payments for subrogation. This also works if they settle your wage-loss benefits but continue to pay for ongoing medical bills.
However, even with a settlement, subrogation is usually included in the terms. Your settlement documents will usually state how much the insurance company paid you and how much they want back in subrogation. We can explain these terms in your settlement agreement and help you understand the specific dollar amounts that will have to come out of your third-party claim to satisfy subrogation claims.
Call Our Workers’ Compensation Lawyers in Pennsylvania Today
For help with your initial Workers’ Comp claim and your third-party lawsuit, call the Philadelphia work injury attorneys at Cardamone Law at (267) 651-7945.
