Workers’ compensation claims frequently intersect with third-party liability and insurance disputes, particularly when an injured employee receives benefits, and a separate insurer may bear responsibility for reimbursement. In those situations, insurers often resolve reimbursement obligations through intercompany arbitration rather than direct litigation. A recent decision from a Massachusetts court highlights how strictly courts enforce deadlines and procedural rules when an insurer seeks to challenge an arbitration award tied to workers’ compensation benefits. If you have questions about workers’ compensation disputes or related insurance litigation in Massachusetts, you should consider speaking with a Massachusetts workers’ compensation attorney as soon as possible.
Facts and Procedural History
Allegedly, a motor vehicle accident occurred in March 2023 in Cambridge, Massachusetts, involving two drivers. One driver was insured under an automobile policy issued by the plaintiff insurer, while the other driver sustained injuries in the course of employment and received workers’ compensation benefits from the defendant insurer. As a result of the injury, the defendant insurer paid workers’ compensation benefits to or on behalf of the injured employee.
It is alleged that, in June 2023, the defendant insurer asserted a workers’ compensation lien against the plaintiff insurer seeking reimbursement for benefits paid in connection with the accident. The lien reflected medical and related expenses arising from the work-related injury, consistent with the statutory framework that allows workers’ compensation carriers to recover benefits when a third party may be liable.
Reportedly, later in 2023, the defendant insurer initiated intercompany arbitration through Arbitration Forums, Inc., seeking reimbursement of workers’ compensation benefits from the plaintiff insurer. The arbitration demand ultimately sought more than $178,000 and included materials such as medical records, billing information, and accident-related evidence. According to the complaint, the plaintiff insurer contended that it was unable to access or review the supporting evidence during the arbitration process.
It is reported that the plaintiff insurer requested a one-year deferment of the arbitration to allow time to obtain and evaluate the workers’ compensation evidence supporting the reimbursement claim. Arbitration Forums granted only a brief deferment, after which the arbitration proceeded. The plaintiff insurer maintained that it repeatedly sought the underlying documentation from both Arbitration Forums and the defendant insurer but was unable to obtain it before the hearing.
Allegedly, in May 2024, the arbitrator issued an award in favor of the defendant insurer, ordering the plaintiff insurer to pay $178,472.39 in reimbursement for workers’ compensation benefits. Several months later, in February 2025, the plaintiff insurer filed a lawsuit in federal court seeking a declaratory judgment vacating the arbitration award. The defendant insurer moved to dismiss the complaint and to confirm the award, arguing that the challenge was untimely and unsupported.
Arbitration in the Context of Workers’ Compensation Claims
The court evaluated the dispute under the highly deferential standards governing judicial review of arbitration awards. It emphasized that both federal and Massachusetts law sharply limit a court’s authority to vacate an arbitration award, particularly in commercial disputes involving insurers.
Central to the court’s analysis was timeliness. Under the Federal Arbitration Act, a party seeking to vacate an arbitration award must act within three months of the award’s delivery. The court found that the plaintiff insurer waited well beyond that deadline before filing suit. Even assuming equitable tolling might apply in extraordinary circumstances, the court concluded that the plaintiff insurer failed to demonstrate diligence or obstacles beyond its control that would justify extending the deadline.
The court rejected the argument that difficulties obtaining workers’ compensation evidence during arbitration excused the late filing. It explained that concerns about evidentiary access arose before the award was issued and did not prevent the plaintiff insurer from timely seeking vacatur based on those same alleged deficiencies. The court also noted that arbitration rules restricted access to opposing evidence and that disagreement with those rules did not amount to fraud, corruption, or undue means.
The court further determined that, even if the complaint had been timely, the plaintiff insurer failed to allege grounds sufficient to set aside the award. The allegations did not establish arbitrator misconduct or denial of a fundamentally fair hearing. As a result, the court dismissed the complaint and confirmed the arbitration award, reinforcing the finality of intercompany arbitration decisions involving workers’ compensation reimbursement.
Consult a Skilled Massachusetts Workers’ Compensation Attorney
Workers’ compensation claims often extend beyond benefit payments and can involve complex reimbursement and insurance arbitration issues. James K. Meehan of the Law Office of James K. Meehan is a skilled Massachusetts workers’ compensation attorney who assists clients throughout Massachusetts with workers’ compensation matters, including disputes involving liens, reimbursement, and related litigation. If you are facing questions about workers’ compensation benefits, contact the Law Office of James K. Meehan at 508-822-6600 or submit a request through the firm’s online contact form to arrange a consultation and discuss your options.