What steps are needed to verify and satisfy a workers’ compensation lien on a personal injury settlement in North Carolina?
How to Verify and Satisfy a North Carolina Workers’ Compensation Lien on Your Personal Injury Settlement
Detailed Answer
Under N.C. Gen. Stat. § 97-10.2, any money paid by a workers’ compensation insurer (or self-insured employer) for an injured worker’s medical bills or wage benefits creates a statutory lien against the worker’s third-party personal injury recovery. Below is the step-by-step process most attorneys follow to verify the lien amount and ensure it is properly satisfied so the settlement can be disbursed without future surprises.
Place the Carrier on Written Notice. As soon as you know a third-party claim exists, send the employer and its carrier written notice. Early notice preserves goodwill, helps you gather timely payment data, and is required under § 97-10.2(h).
Request an Itemized Payment Ledger. Ask for a complete, certified ledger that lists every indemnity check and medical bill paid.
• Verify dates, CPT codes, provider names, and dollar amounts.
• Make sure the ledger reflects only compensable payments related to the accident, not unrelated treatment.
Audit and Challenge the Ledger. Compare the ledger to medical records and wage statements. Dispute any duplicate, non-causally-related, or unrelated payments in writing. Carriers frequently remove contested items after documentation.
Calculate the Statutory Lien. In North Carolina the lien is not automatically the full amount paid. Under § 97-10.2(f)–(j):
• You deduct reasonable costs of collection (attorney’s fees and litigation expenses).
• The lien may be capped at two-thirds of the net recovery or reduced further by court order if full reimbursement would be inequitable.
Attempt a Voluntary Reduction. Send the carrier:
The proposed settlement statement showing gross settlement, attorney’s fee, litigation costs, and projected net to the client.
A written reduction request referencing § 97-10.2(j) and pointing to factors such as limited coverage, comparative fault, or significant future medical needs.
Most carriers will negotiate to avoid a court hearing.
File a “Motion to Determine Subrogation” if Needed. If negotiations stall, § 97-10.2(j) lets you petition the Superior Court in the county where the third-party claim is pending (or where any party resides). The judge weighs eight statutory factors—ability of the employee to recover, future medical costs, etc.—and enters an order setting the final lien amount.
Obtain Written Satisfaction. Whether by agreement or court order, require a signed Release and Satisfaction of Lien from the carrier. Keep the original in your file and provide a copy to the settlement insurer.
Disburse Settlement Funds. From the trust account, pay the carrier the exact agreed amount. Note the check number, date, and tracking information in the final settlement statement.
Close Out the Workers’ Comp Claim (Optional but Smart). Once the lien is paid, consider clinching the workers’ comp case with a Form 26A or Compromise Settlement Agreement so no additional indemnity or medical payments accrue and no new liens attach.
Helpful Hints
Put Everything in Writing. Email confirmations and certified letters create a paper trail that can resolve disputes quickly.
Watch for Medicare or ERISA Liens. Paying the workers’ comp lien does not clear these separate obligations.
Track Future Medical Payments. If the carrier keeps paying after you reach a third-party settlement, those amounts can spawn new liens. Close the claim or obtain a waiver.
Know the 5–Year Statute of Limitations. The carrier must assert the lien within five years of the third-party claim under § 97-10.2(b).
Equitable Distribution Favors the Injured Worker. Judges often grant significant reductions when liability is disputed or coverage is low—so do not hesitate to seek court help.
Bottom Line: Verifying and satisfying a North Carolina workers’ compensation lien requires diligence, negotiation, and strict compliance with § 97-10.2. A single mistake can delay settlement or leave you responsible for unpaid liens.
Need Guidance? Our firm’s seasoned North Carolina personal injury attorneys routinely navigate workers’ compensation liens and secure maximum net recoveries. To safeguard your settlement and peace of mind, call us today at 919-313-2737.
