Third Party Workers Compensation Liens Unfair to Injured Workers
New Jersey law, in particular, New Jersey Statute NJSA 39:15-40 provides that an injured worker who recovers monies from a Third Party must reimburse the Workers Compensation carrier monies paid by the carrier including temporary disability benefits, medical bill payments, and permanent disability benefits.
The law was written to prevent an injured worker from recovering twice for the same injury. The reality, however, is that the current version of the law which was recently upheld in an unpublished decision, Greater New York Insurance Company v. Calgano & Associates and John Phillips, New Jersey Superior Court, Appellate Division, Docket No: A-0900-11T4, gives money to insurance carriers that is not justly their money. In the Greater New York case, the Attorney representing the injured worker paid back money to in the insurance carrier but the carrier contended that it had not been paid back the correct amount due it under the New Jersey Third Party Lien law (NJSA 34:15-40). The dispute centered around whether the injured work could deduct the actual costs incurred in pursuing the Third Party or whether the worker was only entitled to deduct a maximum of $750.00 as set forth in the statute. A two-judge panel in the New Jersey Appellate Division found that the maximum amount of actual costs that could be deducted from the repayment of the lien is what was set forth in the statute — $750.00. The injured worker’s attorney had spent $12,767.23 in actual costs in pursuing and settling an action against a negligent party who had caused the injured workers accident (called a Third Party).