Short Answer

In North Carolina, the workers’ compensation carrier has a lien on any third‑party settlement related to your work injury. Before disbursing funds, get the carrier’s written payoff or ask a Superior Court judge to determine and, if warranted, reduce the lien after attorney’s fees and costs. Do not release settlement money until a signed consent or court order sets repayment and any future credit terms.

Understanding the Problem

You want to close a North Carolina personal injury case that arose from a work accident. Because workers’ comp paid benefits, you’re asking: how do I properly repay those benefits from my settlement? Here, your attorney has requested a lien amount from the comp insurer, and you need a clear, lawful payoff and documentation before funds are disbursed.

Apply the Law

North Carolina law gives the employer/insurer a statutory lien on your third‑party recovery when you were hurt on the job and received comp benefits. Attorney’s fees and litigation costs are deducted first. If the parties cannot agree on the lien payoff, a Superior Court judge can determine the lien amount, apportion the recovery, and in the judge’s discretion reduce the lien to reach a just result. The judge’s written order then controls repayment and any future credit against comp benefits. The forum is Superior Court; the key trigger is resolving the lien before any settlement funds are distributed.

Key Requirements

• Verify the lien: Request an itemized, up‑to‑date ledger showing benefits actually paid (medical and indemnity), excluding reserves.
• Deduct costs of collection first: Reasonable attorney’s fees and case costs come off the top before lien repayment is calculated.
• Obtain consent or a court order: Get the carrier’s written payoff agreement, or file a motion asking a Superior Court judge to set or reduce the lien and approve distribution.
• Serve required parties: Provide notice to the employer and comp insurer and attach the lien ledger, settlement terms, and fee/cost affidavits.
• Address future credit: Ensure the order clarifies any credit the carrier may take against future workers’ comp benefits from your net recovery.
• Keep other liens separate: Medicare/Medicaid and health plan recoveries are handled independently and must also be resolved before disbursement.

What the Statutes Say

• N.C. Gen. Stat. § 97‑10.2 (Third‑party liability; lien; distribution) - Creates the workers’ comp lien on third‑party recoveries and authorizes the court to determine and apportion the lien.
• N.C. Gen. Stat. § 97‑17 (Comp settlements require Commission approval) - Compromise settlements of comp claims need Industrial Commission approval (separate from third‑party distribution).

Analysis

Apply the Rule to the Facts: You received North Carolina workers’ comp benefits and are finalizing a third‑party settlement. Your lawyer should collect an itemized lien ledger from the comp carrier and deduct attorney’s fees and costs. If the carrier agrees in writing to a payoff, disburse per that agreement. If not, file a motion in Superior Court to set or reduce the lien and obtain an order that specifies repayment and any future credit before any funds are released.

Process & Timing

1. Who files: The injured worker (through counsel) or the comp carrier. Where: Superior Court in the county where the third‑party case is pending or would be filed. What: Motion to Determine Workers’ Compensation Lien and for Order of Distribution (attach lien ledger, settlement terms, fee/cost affidavits). When: Before any settlement funds are disbursed.
2. Serve the employer and insurer; the court sets a hearing. Time to hearing varies by county; plan ahead so the motion is heard before closing.
3. The judge enters a written order setting the lien payoff, approving distribution (after fees/costs), and clarifying any future credit. Use the order to disburse safely.

Exceptions & Pitfalls

• Counting reserves: Only amounts actually paid in workers’ comp benefits belong in the lien, not future reserves or estimates.
• Ignoring other liens: Medicare, Medicaid, and health plan recoveries are separate and must be resolved to avoid penalties or double recovery.
• Service gaps: Failing to give the employer and insurer notice of the motion can delay approval or jeopardize enforceability.
• Future credit silence: If the order is silent on the carrier’s future credit, disputes can arise later; ask the judge to address it explicitly.
• Allocation assumptions: Allocating more to pain and suffering does not sidestep the statutory comp lien; seek court apportionment if needed.

Talk to a Personal Injury Attorney

If you’re resolving a third‑party injury case after receiving workers’ comp, our firm can help verify the lien, seek reductions, and secure a court‑approved distribution so you can close confidently. Contact us today to discuss your options and timelines.

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.