Suppose you are considering settling a lawsuit related to injuries on the job. In that case, it is essential to understand how a potential settlement of a related claim could affect your workers’ compensation benefits. What happens to your workers’ compensation benefits if you settle a related lawsuit without written approval from your employer and their workers’ compensation insurer? The following case helps answer that question.
While working at Mouton Plumbing, Terrell Talbot was involved in a car accident. Mouton Plumbing and its workers’ compensation insurer accepted Talbot’s claim under La. R.S. 23:1021. He received $69,265.02, consisting of workers’ compensation indemnity benefits of $23,487.86 and medical expenses of $45,777.16. Talbot filed a lawsuit against the other individual involved in the car accident and her insurer. Pursuant to La. R.S. 23:1102(A), Talbot notified Mouton Plumbing and its insurer in writing about the lawsuit. They intervened in Talbot’s case. Talbot settled the lawsuit for $107,389,73 but did not obtain written approval from Mouton Plumbing or its insurer. As a result, the insurer ended Talbot’s workers’ compensation benefits.
Under La. R.S. 23:1102(B), a worker is not entitled to workers’ compensation benefits if he does not obtain the employee or insurer’s approval to settle a related lawsuit. However, an employee can reclaim his workers’ compensation benefits through a “buy-back provision.” When Talbot’s benefits were terminated, a lien from Mouton Plumbing’s insurer was not satisfied. As a result, the $28,730.84 due to Talbot from the settlement, after deducing attorney’s fees and costs, was paid directly to the insurer to satisfy the lien.