Short Answer

Yes. In North Carolina, if you recover money from a negligent third party for a work injury, the workers’ compensation insurer usually has a statutory lien on that recovery. Your attorney must account for that lien, obtain the carrier’s written consent or a Superior Court order before funds are disbursed, and apply “costs of collection” (attorney’s fees and case expenses) that reduce the lien. The carrier may also receive a credit against future comp benefits.

Understanding the Problem

You were hurt at work and now the at-fault party’s insurer has made an offer that exceeds your out-of-pocket medical bills. In North Carolina, can you take that personal injury settlement without jeopardizing workers’ comp rights, and how do any medical or workers’ comp liens affect what you actually take home?

Apply the Law

North Carolina law allows an injured worker to pursue a personal injury claim against a negligent third party while also receiving workers’ compensation. But the workers’ compensation carrier has a lien on any third-party recovery to the extent of benefits paid, and it may get a credit against future benefits. A Superior Court judge, not the Clerk of Superior Court, resolves disputes about the lien and can approve a settlement and allocate the funds if the carrier won’t consent. Before disbursing settlement proceeds, you must address the lien and any perfected medical provider liens. Most third-party injury claims must be filed within three years; procedures and timing can vary by county.

Key Requirements

• Third-party fault: The injury happened at work but was caused by someone other than the employer or a co-worker, allowing a separate personal injury claim.
• Workers’ comp lien: If the comp carrier has paid or owes benefits, it has a lien on your third-party recovery for those amounts.
• Consent or court order: Do not disburse a third-party settlement without the carrier’s written consent or a Superior Court order approving distribution.
• Costs of collection: Reasonable attorney’s fees and case expenses are deducted before calculating the carrier’s reimbursement and future credit.
• Future benefit credit: The carrier may receive a credit against future comp benefits until your net recovery is exhausted under the statute’s formula.
• Medical provider liens: Properly perfected provider liens must be honored and are capped by law as a share of the settlement after attorney’s fees.

What the Statutes Say

• N.C. Gen. Stat. § 97-10.2 (Third-party liability and workers’ comp liens) - Sets the lien, consent, distribution, and judicial reduction rules.
• N.C. Gen. Stat. § 97-10.1 (Exclusivity and third-party actions) - Preserves the right to sue a negligent third party despite comp exclusivity.
• N.C. Gen. Stat. § 44-49 (Medical provider liens) - Allows providers to assert liens for reasonable charges.
• N.C. Gen. Stat. § 44-50 (Lien cap and distribution) - Caps provider liens at a portion of the recovery after attorney’s fees.

Analysis

Apply the Rule to the Facts: Because your injury occurred at work, any third-party settlement is subject to the workers’ comp lien rules if the carrier has paid or becomes obligated to pay benefits. Your attorney can deduct attorney’s fees and case costs first, then address the comp lien and any perfected medical liens before you receive your net. If the carrier won’t consent to the distribution, a Superior Court judge can approve and, when appropriate, reduce the lien based on the statutory factors.

Process & Timing

1. Who files: The injured worker (through counsel). Where: Superior Court in the county where the third‑party case is pending or where the accident occurred. What: Motion to approve settlement and determine lien distribution under the workers’ comp statute. When: Before any settlement funds are disbursed.
2. The court sets a hearing; your attorney serves the employer/carrier. Timing varies by county, but expect several weeks for scheduling and coordination.
3. The judge enters an order allocating attorney’s fees/costs, medical liens, the workers’ comp lien (including any reduction), and your net. Funds are then disbursed per the order, and any future credit for the carrier is established.

Exceptions & Pitfalls

• If only the employer or a co-worker caused the injury, you generally cannot sue them in tort; your remedy is workers’ comp, and no third‑party recovery is available.
• Settling without carrier consent or a court order can jeopardize workers’ comp benefits and expose you to repayment demands.
• Medical provider liens must be properly perfected and are capped by statute; failing to account for them can delay disbursement.
• Future benefits may be reduced by a credit from your net recovery; plan for this when negotiating your minimum acceptable settlement number.
• Local practice varies; provide prompt notice to the carrier and build in time for a court hearing if consent is withheld.

Talk to a Personal Injury Attorney

If you're dealing with a work injury and a third‑party settlement, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at 919-341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.