How personal injury and workers’ compensation systems work together

Note: Veteran workers’ compensation attorney James Yoro recently spoke at the Kern County Paralegal Association luncheon about the relationship between workers’ compensation law and personal injury law. Chain | Cohn | Clark law firm focuses on only personal injury and workers’ compensation cases. Below is a portion of Yoro’s presentation.

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If you have been injured due to the fault of both your employer as well as a third party, then you may be entitled to further compensation from the third party. Since Chain | Cohn | Clark practices law in both areas, the lawyers and staff are uniquely situated to handle both aspects of these cases.

To explain a little further:

• A personal injury claim is a civil lawsuit that is pursued and processed through superior, appellate and supreme courts, and is a part of the civil justice system, which allows a person to sue another person or party for damages as a result of negligent conduct that caused certain damages to that person. The outcome and any potential recovery is determined at the end of the case by way of dispute resolution (settlement, mediation, or arbitration) or through litigation (trial). Damages can include:
  • Cost of medical treatment provided and potential future medical needs.
  • Loss of earnings and future earning capacity.
  • Potential loss of consortium.
  • Non-economic damages (typically referred as pain and suffering). Recovery is a fluid process up until a jury verdict is returned and upheld on appeal.
• A workers’ compensation claim is an administrative claim that is pursued through an administrative process governed by the Workers’ Compensation Appeals Board, and if legal disputes arise, the appellate and supreme courts. It is categorized as an administrative process because the workers’ compensation system was created by statute and designed to be a benefit delivery system. If disputes arise, they are adjudicated by a Workers’ Compensation Appeals Board, and the system can become adversarial. A case can be resolved at any point in the process or it can remain unresolved for many years. A case can be resolved and yet remain open for the provision of certain benefits for the person’s lifetime. If there are no disputed issues as to the legitimacy of a claim, benefits as defined by statute are to be provided without delay. A workers’ compensation formula is applied for employer negligence calculation as applied to total damages, not including recovery. The benefits include:
  • Medical treatment and associated benefits.
  • Monetary benefits.
  • Vocational rehabilitation (that are set and defined by statute)
  • Temporary total disability.
  • Permanent disability.

One rule to note: A workers compensation insurance carrier that has provided benefits to an injured worker who has a personal injury case is not entitled to a recovery of their lien or application of the credit to the extent of their percentage of fault if the employers conduct contributed to the cause of the injury.

To illustrate a couple of examples of how personal injury and workers’ compensation cases work together, here are a few hypothetical scenarios.

SCENARIO 1

Ann is a UPS delivery driver, and one day while driving down a Main Street on the way to deliver a package, she is broadsided by a Chevron tanker truck that has gone through a stop sign. Ann suffers serious personal injuries and requires medical treatment including hospitalization, surgery and time off from work to recover.

Ann files a workers’ compensation claim with her employer who is insured for worker’s compensation by Cal. Comp. Ann hires an attorney to pursue a personal injury against Chevron. Cal. Comp. hires an attorney to pursue its subrogation interests and files a complaint in intervention in Ann’s personal injury lawsuit.

At the mandatory settlement conference in the personal injury case, Chevron settles with all parties for $1 million. As of the date of the settlement conference, Cal. Comp. has paid out $150,000 in both medical and monetary benefits to Ann. Because of her level of permanent disability percentage, Cal. Comp. still owes an additional $60,000 and may have to provide her with another surgery that could cost $40,000 in her unresolved workers’ comp. case. Ann nets $550,000 from her personal injury case.

A few questions arise:

• Who got what and why?
• Is Ann entitled to get the additional $60,000 that Cal. Comp. owes her and get them to pay for her surgery? Why or why not?
• What if Cal. Comp. did not hire an attorney and did not file a complaint in intervention and only served a lien on Ann’s personal injury attorney? Then what would Cal. Comp. get? What would Ann get?

SCENARIO 2

Ann is a UPS delivery driver. One day while driving down a Main Street on the way to deliver a package, she is broadsided by a converted taco truck that has blown a stop sign. Ann suffers serious personal injuries and requires medical treatment including hospitalization, surgery and time off from work in order to recover.

The owner of the Taco truck is Don Quixote who has a $100,000 auto policy with GEICO. Ann files a workers’ compensation claim with her employer who is insured for workers’ compensation by Cal. Comp. Ann hires an attorney to pursue a personal injury claim against Don Quixote. Cal. Comp. does not hire a subrogation attorney and only sends Ann’s attorney a lien.

Upon presentation of the current medicals on GEICO by Ann’s personal injury attorney, GEICO decides to tender their policy. At the time of the tender, Cal. Comp. has paid out $100,000 in medical and temporary total disability. Its future obligation to Ann is estimated to be another $200,000 with $60,000 to $70,000 estimated for her permanent disability benefit. Cal. Comp. notifies Ann’s personal injury attorney that it wants payment of its lien.

• What strategies can be employed for Ann’s benefit?

SCENARIO 3

Ann is a UPS delivery driver. One day while driving down a Main Street on the way to deliver a package, she is broadsided by a Chevron tanker truck that has blown a stop sign. When the CHP officer interviews Ann, she tells him that as she approached the intersection she saw the Chevron truck out of the corner of her eye, and thought that the truck was going too fast to stop, so she started to apply her brakes but she couldn’t stop in time. Upon inspection, the CHP officer notes that the UPS truck’s brakes are badly worn. Ann suffers serious personal injuries and requires medical treatment including hospitalization, surgery and time off from work in order to recover.

Ann files a workers’ compensation claim with her employer who is insured for workers’ compensation by Cal. Comp. Ann hires an attorney to pursue a personal injury claim against Chevron. Chevron’s attorney obtains the UPS trucks maintenance records and discovers that UPS failed to bring this
particular truck in for its last routine maintenance inspection which was scheduled two months before the accident. Chevron hires an accident reconstruction expert who says that Ann would have had enough time to avoid the accident had the brakes been working properly. Ann’s attorney hires an accident reconstruction expert, who says that it is too speculative to say that Ann would have had enough time to avoid the accident.

As of the date of the mandatory settlement conference for the personal injury case, Cal. Comp has paid out $150,000 in both medical and monetary benefits to Ann. Because of her level of permanent disability percentage, Cal. Comp still owes an additional $60,000 and may have to provide her with another surgery that could cost $40,000 in her unresolved workers’ compensation case. The full damage value of the case is about $1 million. The case settles for $850,000, and Ann nets $540,000.

• What if anything is Cal. Comp. entitled to recover?
• Would it make a difference if Cal. Comp. had an attorney?
• What strategies can Ann’s attorneys use to get the best result for Ann?

SCENARIO 4

Ann is a UPS delivery driver. One day while driving down a main street on the way to deliver a package, she is broadsided by a converted Taco truck that has blown a stop sign. Ann suffers serious personal injuries and requires medical treatment including hospitalization, surgery and time off from work in order to recover.

The owner of the Taco truck is Don Quixote who has a $100,000 auto policy with GEICO. Ann files a workers’ compensation claim with her employer who is insured for workers’ compensation by Cal. Comp. Ann hires an attorney to pursue a personal injury claim against Don Quixote. Cal. Comp. does not hire a subrogation attorney and only sends Ann’s attorney a lien.

Upon presentation of the current medicals on GEICO by Ann’s personal injury attorney, GEICO decides to tender their policy. At the time of the tender, Cal. Comp. has paid out $100,000 in Medical and temporary total disability. Its future obligation to Ann is estimated to be another $200,000, with $60,000 to $70,000 estimated for her permanent disability benefit.

Ann’s personal injury attorney discovers that UPS has an Uninsured / Underinsured policy on all of its trucks for $1 million. Cal. Comp. notifies Ann’s personal injury attorney that it wants payment of its lien and credit for any and all recovery that Ann obtains.

• Is Cal. Comp. entitled to recover its lien and get credit?
• For how much?
• What strategies can be employed for Ann’s benefit?

While these are hypothetical situations in which personal injury and workers’ compensation law intersect, similar cases are very real. And each case presents its own questions and challenges, ones which the workers’ compensation and personal injury lawyers at Chain | Cohn | Clark has confronted time and time again.

If you or someone you know is injured in an accident at the fault of someone else, or injured on the job no matter whose fault it is, contact the attorneys at Chain | Cohn | Clark by calling (661) 323-4000.

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*NOTICE: Making a false or fraudulent Workers’ Compensation claim is a felony subject to up to 5 years in a prison or a fine of up to $150,000 or double the value of the fraud, whichever is greater, or by both imprisonment and fine.