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Massachusetts Court Discusses Workers’ Compensation Insurers’ Right to Settlement Proceeds

Under Massachusetts’ Workers’ Compensation law, people who are hurt while working cannot recover damages in tort from their employer; they can recover them from third parties that contribute to their harm. In a recent Massachusetts case, a court debated whether an insurer had a right to settlement proceeds for pain and suffering and loss of consortium, ultimately determining that they did not. If you experienced workplace harm, it is advisable to confer with a Massachusetts Workers’ Compensation lawyer promptly.

History of the Case

It is reported that the decedent was involved in a motor vehicle accident while he was working; he subsequently died five days later. The plaintiff, the executrix of the decedent’s estate, initiated a medical malpractice and wrongful death action against the hospital and physicians involved in his treatment. The case proceeded to arbitration, resulting in an unallocated $300,000 recovery for the plaintiff. Subsequently, the defendant, a workers’ compensation insurer, filed a statutory lien to recover the benefits paid to the decedent’s widow. The plaintiff filed for declaratory relief to invalidate the lien. The Superior Court ruled that the $300,000 was settlement proceeds and upheld the validity of the insurer’s lien.

Allegedly, the parties submitted their proposed allocations for judicial approval. The insurer suggested that $250,000 was subject to the lien, including allocations for loss of consortium and conscious pain and suffering. Conversely, the plaintiff’s proposal allocated amounts to categories exempt from the lien, leaving $18,951.51 for the insurer. A second judge found both proposals legally unsound, ruling that compensation for conscious pain and suffering and loss of consortium was not subject to the insurer’s lien. The judge ordered a resubmission of proposals with fair allocations to net income loss, to which the lien could attach. The plaintiff’s revised proposal was approved, allocating $100,000 to net expected loss of income, $100,000 to conscious pain and suffering, and $100,000 to loss of consortium for the decedent’s widow and son. The insurer appealed this decision.

Workers’ Compensation Insurers’ Right to Settlement Proceeds

On appeal, the insurer argued for entitlement to the entire settlement, including sums allocated for loss of consortium and conscious pain and suffering. The court rejected this reasoning and ultimately affirmed the trial court’s decision, agreeing that neither loss of consortium nor conscious pain and suffering were compensable injuries under the workers’ compensation statute and, thus, not subject to reimbursement.

The court highlighted that the statute aimed primarily at wage replacement, not compensation for pain and suffering or loss of consortium. It referenced established legal precedents which asserted that only injuries compensable under the statute could be reimbursed. Consequently, the court ruled that the allocations for loss of consortium and conscious pain and suffering were independent claims and not reimbursable to the insurer.

Thus, the court concluded that the insurer’s claims for these allocations were meritless and upheld the lower court’s allocation of the settlement proceeds. The judgment was affirmed.

Discuss Your Case with a Skilled Massachusetts Workers’ Compensation Attorney

Workers injured during their job duties have the right to pursue workers’ compensation benefits, but employers often challenge the work-related nature of an injury to avoid payment. If you sustained an injury at work, it is wise to discuss your options with an attorney. Attorney James K. Meehan is a skilled Massachusetts workers’ compensation lawyer who can inform you of your rights and assist you in seeking the best possible legal outcome in your case. You can reach Attorney Meehan at 508-822-6600 or through our convenient online contact form to schedule a private consultation.

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