The struggle between insurance carriers and innocent injured claimants/plaintiffs very often does not cease when a settlement agreement or award has been obtained. Battles must be fought on additional fronts, as subrogation lienholders swoop in to assert their interests that have been placed on a file.
In cases involving both workers’ compensation and third-party liability actions arising from the same incident, it is almost inevitable that injured claimants and their counsel will have to deal with a subrogation lien asserted by the employer’s compensation insurance carrier. In many instances, a plaintiff/claimant may be able to negotiate a reduction (or complete waiver) of the lien. A recent decision of Pennsylvania’s Commonwealth Court, however, suggests that claimants and their representatives must formulate air-tight third-party settlement agreements detailing reduction or waiver of liens, or be subject to further lien obligations on future recovery and compensation.
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