What steps are necessary to resolve any workers’ compensation lien on a personal injury claim?
How to Resolve a North Carolina Workers’ Compensation Lien on Your Personal Injury Settlement
Detailed Answer
North Carolina law gives the workers’ compensation carrier (often the employer’s insurance company) an automatic lien against any third-party recovery you receive for the same injury. The controlling statute is N.C. Gen. Stat. § 97-10.2. Clearing that lien before accepting money from the at-fault party is essential; otherwise, you (and sometimes your lawyer) can be sued for repayment. Follow the steps below to protect your recovery and stay compliant.
1. Confirm That a Lien Exists
Request a ledger from the workers’ compensation carrier showing all benefits paid (medical, wage replacement, vocational rehab, etc.).
Verify accuracy—compare the carrier’s payments with medical bills and wage records. Dispute unrelated or excessive charges immediately.
2. Calculate the Statutory Lien Amount
Under § 97-10.2(f), the lien equals the total compensation paid minus the proportional share of “costs of collection” (primarily attorney’s fees and litigation expenses) attributable to the third-party case. A common formula is:
Example: The carrier paid $60,000. Your fee contract is one-third (33⅓ %). The tentative lien is $40,000.
3. Negotiate Voluntary Reduction
Send the carrier a written demand for reduction summarizing facts, liability issues, and limited insurance coverage.
Cite § 97-10.2(b), allowing the carrier to compromise its lien to promote settlement.
Stress factors the Industrial Commission or a court would consider: comparative fault, extent of injuries, litigation risk, and public policy favoring injured workers.
4. Petition for Judicial or Commission Approval if Needed
If the carrier refuses to agree or will not reduce enough, North Carolina gives you two paths:
Superior Court Petition under § 97-10.2(j) File a motion in the county where the third-party case is pending (or would be filed). The judge may determine and declare a fair lien amount after weighing the above factors.
Industrial Commission Motion If there is no active civil action, you may request a consent order from the Commission approving a compromise between you, the carrier, and the employer.
5. Obtain a Signed Release or Order
Secure a compromise settlement agreement or a court/Commission order that sets the exact amount owed and states the lien is satisfied upon payment.
Have all parties (injured worker, carrier, employer, and sometimes healthcare providers) sign.
6. Directly Pay the Agreed Lien from Settlement Proceeds
North Carolina typically requires the plaintiff’s attorney to issue a trust-account check for the lien simultaneously with client disbursement. Keep proof of delivery and obtain a zero-balance confirmation from the carrier.
7. Document Everything for the Settlement Statement
Include the original lien amount, reduction obtained, costs deducted, and final payment on the closing statement to the client.
Helpful Hints
Request the workers’ compensation ledger early; surprises delay settlement.
You can still resolve the lien even if you rejected workers’ comp benefits initially—the carrier’s subrogation right attaches once benefits are paid.
Use medical privacy laws: ask the carrier to remove unrelated treatment it accidentally paid.
The court rarely awards the carrier more than two-thirds of your net recovery when funds are limited, but you must petition to gain that benefit.
Medicare and health-insurance liens are separate. Resolve each lien independently to avoid double repayment.
Need Guidance? Resolving a North Carolina workers’ compensation lien is often the last—and most technical—step before you can enjoy your settlement. Our personal injury team has years of experience negotiating lien waivers and securing court-approved reductions. Let us protect every dollar you deserve. Call 919-313-2737 today for a free consultation.
