Can I Bring a Personal Injury Lawsuit If I Already Receive Workers' Compensation Benefits?

Many New York workers injured on the job, or in the course of their employment, are eligible to receive workers' compensation benefits. Workers' compensation refers to a state-mandated insurance program requiring certain employers to provide or purchase, and which provides benefits to injured employees. The basic idea behind workers' compensation is that the employee waives his or her right to sue the employer in exchange for receiving the benefits.

But, what if you suffer a work-related injury as the result of negligence by a third-party? For example, let's say you are driving a company-owned vehicle and are hit (and injured) by another driver. Can you file a personal injury lawsuit against the other driver and recover damages without affecting your workers' compensation benefits?

As a general rule in New York, if you bring or settle a lawsuit against a third party for injuries covered by workers' compensation, your employer (or the employer’s insurance carrier) may place a lien on any amount recovered. The lien is equal to any amounts paid out now or in the future. So if you receive $50,000 in workers' compensation benefits and later reach a $75,000 settlement with the third party, your employer's insurer can seek repayment of the $50,000 it previously made to you. Basically, the law does not want injured employees to recover twice for the same injury.

On a related note, the law also authorizes the employer or insurer to pursue legal action against the third party if you do not do so within two years of the accident. Likewise, the law restricts the employee's ability to bring and settle a claim within that two year window. New York's “no-fault” insurance law law authorizes victims to receive up to $50,000 for “economic loss” suffered due to an accident. But, if an employee has previously received workers' compensation benefits and then settles with a third party for less than the $50,000 maximum, the employer or insurer may object, as obviously it may still leave them owing money to the employee. Therefore, in order to protect the employer or insurer's interest, the employee must receive consent for the settlement from either the insurer or the judge overseeing the third party lawsuit.

Lobban v. Brown

Here is a recent example of how the law operates in practice. In this case, the plaintiff was injured in a car accident with another driver. The plaintiff was driving in the course of his employment, and subsequently received workers' compensation benefits from his employer's insurance carrier. The plaintiff then sued and settled with the driver of the other vehicle for $48,100—less than the $50,000 maximum under the no-fault law. The plaintiff did not receive consent from the insurance carrier.

Several months after the fact the plaintiff sought judicial approval of the settlement. Suffolk County Supreme Court denied the plaintiff's request, however, noting he'd waited more than three months as specified in the workers' compensation law for obtaining judicial approval. A court may grant retroactive approval—known as a “nunc pro tunc” order—after the three-month period expires, but only if the judge is satisfied the delay was not due to the plaintiff's own “fault or neglect.” That was not the case here according to both the Supreme Court and the Appellate Division, Second Department.

Understanding and following legal deadlines is just one factor in bringing (or even settling) a successful personal injury lawsuit. If you have been injured in a motor vehicle accident and need help navigating the complexities of New York personal injury law, contact our office right away.