How to Coordinate Workers’ Compensation Benefits with a Personal Injury Settlement in North Carolina

Detailed Answer

When an on-the-job injury is also caused by someone outside your workplace (for example, a delivery driver rear-ends your company vehicle), you may have two concurrent claims:

1. A North Carolina workers’ compensation claim for medical care and wage replacement under the North Carolina Workers’ Compensation Act, N.C. Gen. Stat. § 97-10.1 et seq.
2. A third-party personal-injury claim against the negligent person or business.

Coordinating these claims matters because the workers’ compensation insurer (the carrier) gains a statutory lien—often called a subrogation lien—on any money you recover from the third party. Failing to address that lien can delay your settlement or slash your net recovery.

1. Understand the Workers’ Comp Lien

Under N.C. Gen. Stat. § 97-10.2(b), every dollar the carrier pays for wage loss, medical treatment, or permanent-disability ratings becomes part of its lien. The lien also covers future payments it is obligated to make.

2. Calculate the Initial Lien Amount

• Request a written, itemized lien statement from the carrier before beginning settlement talks.
• Reconcile the carrier’s numbers against your own medical bills and indemnity checks to avoid overcharges.

3. Deduct Attorneys’ Fees and Costs

Section 97-10.2(f) requires the carrier to share in the cost of winning the third-party case. After you subtract a pro-rata portion of your attorneys’ fees and litigation costs, the carrier’s lien is automatically reduced. For example, if your contingency fee is 33⅓ %, the lien usually drops by the same percentage.

4. Seek an Equitable Reduction

If paying the reduced lien would still be unfair—maybe the third party had minimal insurance or you suffered a catastrophic injury—North Carolina allows a judge to cut the lien even further. You must file a motion to determine the subrogation amount in Superior Court under § 97-10.2(j). The court balances:

• Degree of fault of all parties;
• Net compensation you, the injured worker, will receive;
• Legal expenses you incurred;
• Public-policy factors, such as financial hardship.

5. Close the Workers’ Comp File Strategically

Many injured employees choose to settle the workers’ compensation claim through a Form 26A or Form 21 Clincher Agreement at the same time as, or shortly after, the personal-injury settlement. A full and final clincher may:

• Eliminate future exposure and stop the lien from growing;
• Provide additional funds in exchange for releasing future medical rights;
• Require Medicare set-aside coordination if you are—or soon will be—on Medicare.

6. Allocate Settlement Proceeds Wisely

North Carolina law does not require a specific allocation between categories such as pain-and-suffering versus medical bills, but a clear, good-faith allocation in the release agreement can help support a lower lien if challenged.

7. Obtain Written Lien Satisfaction

After you pay the negotiated lien, secure a Release and Satisfaction of Lien from the carrier and file it with the clerk of court. This document protects you from future collection efforts.

Helpful Hints

• Send the carrier written notice of any third-party lawsuit within 30 days, as required by § 97-10.2(h).
• Keep meticulous records of every workers’ compensation payment; carriers sometimes miscalculate the lien.
• Never endorse a third-party check until the lien amount is settled in writing.
• Coordinate with Medicare, Medicaid, or private health insurers to avoid surprise reimbursement claims.
• Consider mediation; carriers often agree to lien reductions in exchange for prompt payment.
• If multiple insurers paid benefits, each may assert a lien—address them all before closing.

Takeaway: Coordinating a workers’ compensation lien with a personal injury settlement in North Carolina requires careful timing, statutory knowledge, and strategic negotiation. Our attorneys have guided injured workers through this process for years and can protect your bottom line.

Ready to maximize your recovery and resolve your lien correctly? Call us today at 919-313-2737 for a free consultation.

• Prev Post
• Next Post