tial workers’ compensation award, then the plaintiff’s attorney has the option of filing a law suit and thus preserving con- trol of the cause of action for the employee exclusively. A workers’ compensation in- surer cannot use the tactic of hiring its own counsel to defeat the statutorily re- quired pro rata reduction of the lien for attorney’s fees and expenses incurred by the plaintiff. See Collins v. United Pa- cific Insurance Company, 315 Md. 141, 553 A.2d 707 (1989). The only limited exception is where the plaintiff’s attorney is not cooperative in providing informa- tion to the workers’ compensation insurer about the status of the third-party claim, and even there, the reduction in the amount of the setoff for the plaintiff’s attorney’s fees and expenses likely will be very slight. Id. With regard to having the consent of the workers’ compensation insurer to a settlement, Franch v. Ankney, 341 Md. 350, 670 A.2d 951 (1996), makes it clear that while a plaintiff’s attorney can settle a third party action without the consent of the workers’ compensation insurer, he or she does so at potential risk to the cli- ent. Specifically, if the workers’ compensation insurer can establish that it has been prejudiced by the settlement because the value of the third party claim was higher than what was actually ob- tained, then the employer is entitled to a credit for the amount of the prejudice. 670 A.2d at 955-956. If the plaintiff pursues a cause of ac- tion against the third party and obtains a settlement or judgment, then to the ex- tent of the actual amount netted by the plaintiff, the workers’ compensation in- surer is entitled to a dollar for dollar setoff against any future workers’ compensation benefits that are claimed. LE sec. 9-903. This setoff against future benefits includes future medical benefits, which can present a very difficult situation if significant ad- ditional treatment is expected for a claimant. Many health insurers, includ- ing Medicare and an increasing number of health insurance plans, exclude cover- age for injuries covered by workers’ compensation. In practice, if a plaintiff will not be re- quiring significant future medical care, negotiating a workers’ compensation lien is straightforward. One deducts a pro rata share of attorney’s fees and expenses at the start and then tries to obtain additional concessions. However, given the setoff against future benefits noted above, if a plaintiff will be requiring significant future medical care, negotiating a workers’ com- pensation lien can prove to be difficult. This


Spring 2001


is especially the case if there problems with liability insurance coverage or with the is- sues of liability and causation. In this situation, the workers’ compensation in- surer and the employer have to be pressed about providing future care. There are techniques that can be used to help make a settlement involving a workers’ compensation lien work. First, one should try to maximize the amount of the workers’ compensation lien before settling the third party case. This is nearly always in the client’s best interest since workers’ compensation liens are never paid back dollar for dollar while the off- set against future workers’ compensation benefits as a result of a personal injury settlement is dollar for dollar. As a result, if permanent residual injury is involved, it is often best to pursue and obtain an award from the Workers’ Compensation Commission for permanent partial dis- ability benefits before resolving the third-party case.


The second technique is to consider settling not only the third-party case, but also the workers’ compensation case. If a plaintiff is going to have a large setoff against future


workers’ compensation


benefits, it is conceivable that the benefit to the plaintiff of leaving the workers’ compensation case “open” will not amount to much. In contrast, workers’ compensation insurers often will reduce their liens substantially if the claimant is willing to “close” the workers’ compensa- tion claim. This type of approach works best where significant future medical care is not anticipated. A third technique to consider is take


advantage of the Social Security Disabil- ity program to increase the amount of


money that your client receives. If a per- son is disabled from working for a year or longer, they may well have a claim for Social Security Disability benefits. While Social Security provides for an offset against Workers’ Compensation benefits, it does not do so for personal injury re- coveries. I have had success in persuading Social Security that where a Workers’ Compensation lien is asserted and satis- fied out of a personal injury recovery, the plaintiff in effect did not receive any Workers’ Compensation benefits and thus is entitled to the full amount of his or her Social Security benefits.


G. UM Coverage As indicated earlier, special situations with liens can arise where a claim is being made for uninsured motorist coverage, as opposed to liability coverage. Workers’ compensation liens cannot be


asserted on a recovery under uninsured motorist benefits. Under Maryland Anno- tated Code Section 19-513(e), “benefits payable under [UM] coverage shall be re- duced to the extent the recipient has recovered benefits under the workers’ com- pensation laws of any state or the federal government.” Conversely, under Erie In- surance Company v. Curtis, 330 MD 160, 623 A.2d 184 (1993), our Court of Ap- peals held that a workers’ compensation insurer does not have a lien on UM ben- efits received by the injured worker. Also, as indicated above, it is extremely important in dealing with a health plan to obtain the actual language under which they are asserting their lien that is contained in their plan since frequently, a health plan will


(Continued on page 22)


Trial Reporter


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