In 1946, Winston Churchill described the long history and ties between the United States and England as a “special relationship.” The term stuck and by the time of the much loved and equally much maligned movie, “Love Actually,” Hugh Grant's character reprises it in a speech about his feelings for a woman he catches kissing the U.S. president, played slyly by Billy Bob Thornton. The gist is that the special relationship between the nations has soured. Ultimately, Hugh gets the girl and their special relationship is celebrated in the final scenes.

When a worker is injured on the job by a third party, a special relationship arises between workers' compensation counsel and personal injury counsel, with the claimant/plaintiff in the middle. The relationship likely begins with a referral going one way or the other. But it shouldn't end there or remain one of minimal contact, or the relationship will become not-so-special and the claimant/plaintiff may suffer consequences. The reasons for this include the likelihood that the workers' compensation insurer can assert subrogation from any third-party settlement of amounts it pays for wage loss and medical benefits, which in most cases will be expended well before the third-party matter gets far along enough for settlement to be a reality. This article will explore some of the contours of that relationship and how both attorneys can manage expectations but also optimize and protect their special relationship as well as their mutual client's recovery.

Let's follow the case of our claimant/plaintiff, Claire Plant. Claire works for a beauty business in Philadelphia where sometimes the employees stand outside and offer samples and quick beauty tips to passersby in an effort to get them into the store. One day Plant was out on the street advising a woman that bright orange lipstick and hot pink eyeshadow wasn't optimizing her skin tone and bone structure when a car ran up on the street and banged into Plant, who fell and injured her back and knees. The car's driver was insured by personal injury insurer (PII) and Plant's employer had workers' compensation insurance through workers' compensation insurer (WCI).

As we know, workers' compensation is designed to be a relatively quick process where the injured worker can receive wage loss benefits and access to medical care within weeks if the claim is accepted, which this one was. Plant began receiving benefits and treating for her injuries. She also signed up with a workers' compensation attorney she knew as a customer at her store, Wendy Compson, to ensure her interests would be protected. Compson put her in touch with a personal injury attorney, Persimmon (her parents are creatives) Inge, also one of Plant's customers, to file suit against the driver and PII.

After about a year, Inge was able to negotiate a settlement of $100,000, which was to make Plant whole for the injuries and pain and suffering she'd sustained from the incident. But that isn't the end of the story. WCI, which had paid $25,000 already in wage losses and medical bills asserted its subrogation right under Section 319 of the Workers' Compensation Act and claimed the right to recover its money from the $100,000 settlement Plant got from her personal injury case.

Unfair as this seems to Plant, WCI can do this. My colleague Maureen Cassidy wrote about this subject (and its injustices) for the Legal Intelligencer in August 2018. See Maureen Cassidy, “With Subrogation, It's the Injured Worker Left Paying the Price,” The Legal Intelligencer, Aug. 9, 2018. The workers' compensation insurer can eat into the third-party recovery for wage loss benefits as long as they may go on and for medical expenses it paid through the third-party settlement, although since the Supreme Court of Pennsylvania's decision in Whitmoyer v. Workers' Compensation Appeal Board (Mountain Country Meats), 186 A.3d 947 (Pa 2018), the workers' compensation insurer may no longer assert subrogation for projected future medical expenses. This seems fair on the surface, since the workers' compensation carrier has been paying for an injury that was not its legal responsibility, and it should be able to recover the amounts it paid out once there is a source of funds from the third-party driver's automobile insurer ultimately responsible for the liability.

But as Cassidy explains, the problem is that there are two distinct sources of injury and recovery at issue here. Workers' compensation addresses wage losses and medical costs, while personal injury litigation encompasses a more expansive and nebulous collection of harms, including pain and suffering. Allowing workers' compensation insurers to eat into third-party recovery makes the workers' compensation insurer whole while leaving the injured worker/plaintiff deprived of the recovery achieved that was intended for harms never addressed in workers' compensation.

Returning to Plant, when she learned about this hit to her settlement sum, she was devastated. She wasn't well enough to return to work and had planned to use her settlement money to take business classes and open her own company specializing in virtual makeovers. She wondered why neither of her attorneys had made it really clear to her that this might happen. It might have been mentioned along the way or she might have signed engagement paperwork indicating this was a possibility, but it was never emphasized, fully discussed, or set out for her in clear terms she could understand.

The relationship in this case had been one of convenience, not communication, and thus was not-so-special. Wendy Compson and Persimmon Inge had known each other at law school, ran into each other at alumni events, and were both customers at Plant's store. They had referred cases to each other, but these referrals usually remained at arms-length and they did not often check in during the parallel litigations until things were more or less resolved on either end and the paperwork had to be completed so that WCI could claim its share.

Some time passed after Plant's case ended, then Compson and Inge ran into each other at Plant's store. Plant no longer worked there, and they had both lost touch with her. Realizing that they could have done better, they resolved to work together more closely if they got the chance to do so again. They would set monthly ticklers in their calendars where they shared information and Compson could give Inge a sense of how WCI's lien was shaping up. They would make sure their mutual clients knew what was going on in both cases and how the two litigations related to each other. Especially, they decided that going forward, the existence of a WCI lien would be a crucial part of settlement considerations and negotiations. It might not fully ease the sting and they might not be able to recover all of the money for their clients, but they would work together and try. They decided to make their connection into a mutually beneficial special relationship.

The law usually changes slowly, if at all, and subrogation will most likely always be around. But as lawyers working on behalf of injured people, particularly when there are both workers' compensation and personal injury components in a case, workers' compensation and personal injury attorneys can be nimbler and more cooperative with each other. We can do better at sharing information with each other and with our mutual clients. Maintaining our special relationship is not just good business; it's the right thing to do.

Susan Nanes is an associate at Pond Lehocky Stern Giordano. She is a former law clerk to retired Pennsylvania Chief Justice Ronald D. Castille and focuses her practice exclusively on workers' compensation.