Massachusetts Court Discusses Insurer’s Liens in Workers’ Compensation Cases

Under Massachusetts’ Workers’ Compensation Act (the Act), employers have an obligation to provide employees with workers’ compensation benefits if they are hurt on the job. In most instances, employers obtain coverage for such benefits from insurance companies. It is not uncommon for said insurance companies to place liens against any recovery an employee might have via third-party claims. As discussed in a recent Massachusetts case, such liens do not extend to damages for pain and suffering.  If you suffered harm while working, you could be owed benefits for your lost wages and medical expenses, and it is advisable to consult a Massachusetts workers’ compensation lawyer as soon as you can to talk about your rights.

Factual Background of the Case

It is reported that the plaintiffs, two employees, suffered work-related injuries, received workers’ compensation benefits, and subsequently settled claims with third parties, including damages for pain and suffering. Both employees had the same workers’ compensation insurer. The insurer sought reimbursement under Massachusetts law from the employees’ settlements, arguing that their liens extended to damages for pain and suffering.

It is alleged that in the first employee’s case, the court rejected a settlement agreement preventing the insurer’s lien on pain and suffering damages. The first employee appealed, relying on precedent that held the insurer’s lien did not attach to such damages. In the second employee’s case, a similar settlement was approved by a different judge, and the insurer appealed.

Insurer’s Liens in Workers’ Compensation Cases

On appeal, the court determined that the insurer’s lien did not extend to pain and suffering damages in both cases. In doing so, the court explained that under Massachusetts law, workers’ compensation beneficiaries cannot sue employers for work-related injuries but can file claims against third parties. When damages are recovered from third parties, the workers’ compensation insurer is entitled to a lien on the recovery equivalent to the benefits paid.

The key issue was whether this lien extended to damages for an employee’s pain and suffering. The court, after analyzing the language of the statute Act, held that “injury” should be narrowly construed to mean only those injuries for which workers’ compensation benefits are payable. Therefore, damages for pain and suffering were not within the insurer’s lien.

The court emphasized the legislative intent of the Act, stating that the goal was not to return the full dollar amount but to prevent double recovery for the same harm. Thus, the court’s decision reversed the rejection of the first employee’s settlement and affirmed the approval of the second employee’s settlement, reiterating that the insurer’s lien did not extend to pain and suffering damages.

Meet with a Skilled Massachusetts Attorney

Employees hurt while performing job duties can typically seek workers’ compensation benefits, and they may be able to recover damages from third parties as well. If you sustained injuries while working, it is smart to speak to an attorney about your possible claims. James K. Meehan of the Law Office of the Law Offices of James K. Meehan is a skilled Massachusetts workers’ compensation attorney who can aid you in fighting to protect your interests. To contact Mr. Meehan to arrange a consultation, you can use the online form or call him at 508-822-6600.