Protecting Your Lien Recovery Rights
One of the most essential areas of successfully handling workers’ compensation claims is intelligent and aggressive recovery of the statutory liens afforded to employers and insurers for workers’ compensation benefits paid to employees who file civil lawsuits arising out of their on-the-job injuries. While minimizing exposure through vigilant and calculated payment of benefits is an indispensable part of achieving an optimal end result, recovery of benefits is an equally crucial determinate of an employer or insurer’s total out-of-pocket cost regarding a claim. As such, the filing of intervenor actions in the overwhelming majority of civil suits in which lien recovery rights are at stake is recommended.
The most important benefit of filing an intervenor action is that lien enforcement and adjudication in the employee’s civil suit comes under the civil court’s contempt power, whereby the court can enter orders establishing the existence and amount of an employer or insurer’s lien, and also is able to compel compliance with those orders by the parties to the suit. Such power is an almost invaluable tool when considering that the filing of a separate action to enforce a wrongfully dishonored lien is substantially more expensive than intervening.
Further, by filing an intervenor action, employers and insurers are entitled to notice of all proceedings in the employee’s civil suit, which serves not only to inform as to the overall progress of the suit, but also as to the critical points in the litigation where settlement, and hence, lien recovery, are seriously negotiated. In this regard, employers or insurers that intervene in an employee’s civil suit are frequently consulted regarding settlement negotiations. As a result, they are in a stronger position to negotiate and facilitate recovery.
Another distinct employer advantage of early intervention in an employee’s civil suit concerns early identification and analysis of an employer’s defense of potential third-party civil claims. In Illinois, employees injured on the job are not able (most times) to directly sue their employer in civil court for their injuries, as workers’ compensation is their “exclusive remedy.” However, direct defendants in a civil action filed by an injured employee are able to file third-party contribution claims against the employer regarding the employer’s liability for the employee’s injuries. A problem for employers and insurers arises from the fact that the direct defendants maximize their litigation advantage against the employer long before a third-party claim is even filed.
A typical tactic employed to gain such an advantage is the direct subpoena of an employer and/or their insurer’s records. In responding to the same without counsel, employers and insurers may produce privileged, non-discoverable documents and information that later prove to be damaging and detrimental to the employer’s defense of a third-party claim. However, through early intervention in the civil suit, production of an employer or insurer’s records is conducted by an attorney pursuant to civil discovery procedures, ensuring that all privileged information is withheld and protected, and the third-party civil defense optimized. As a result, employers and insurers minimize their out-of-pocket costs by minimizing their potential third-party liability, which directly reduces their recoverable lien.
Additionally, intervention in an employee’s civil suit can enhance the defense of the employee’s open workers’ compensation action through the receipt and analysis of written discovery that is unavailable in the workers’ compensation action. Also, an intervening party may attend depositions of an employee’s treating and other expert physicians in the employee’s civil suit before they are taken in the corresponding workers’ compensation action, allowing for strategic handling of the workers’ compensation action through advance knowledge of medical testimony affecting disputed issues. In the context of a potential third-party action, intervention also allows for an employer’s representatives to be prepared and presented for deposition by counsel (before the filing of third-party claims), as opposed to being subpoenaed for deposition in the civil matter and testifying unrepresented, unprepared, and sometimes, without the knowledge of the employer and/or its insurer.
Unfortunately, intervenor actions are commonly misperceived as too expensive and unnecessary, requiring the equivalent legal expense as a first-party defense in a typical civil suit. However, intervenor actions do not require day-to-day litigation management or appearance at the hearings and depositions attendant to a typical civil defense. Rather, intervenor actions entail strategic, calculated participation in an employee’s civil lawsuit to maximize lien recovery, minimize potential third-party liability, and strengthen the defense of the corresponding workers’ compensation claim. In doing so, in the vast majority of claims in which they are applicable, intervenor actions serve to minimize an employer or insurer’s out-of-pocket cost well beyond any additional legal cost incurred, and should be seriously considered from the moment an employee’s workers’ compensation case, or civil action, is filed.