In California, businesses and organizations are required to provide no-fault workers’ compensation coverage to their employees. When someone gets hurt on the job, they can claim benefits. While workers’ compensation is usually the sole and exclusive remedy that an employee has against an employer, an injured worker may file a lawsuit directly against a negligent third party.

In these types of cases, the employer (and its insurance carrier) may recoup some, or all, of the workers’ compensation benefits from the third-party settlement or verdict. The right to recovery is often pursued through a lien. Here, our Fresno workers’ compensation defense attorneys provide an overview of these basic things to know about subrogation and liens in California.

What is a Lien and How Does it Apply to Workers’ Compensation Defense?

As simply defined by the Cornell Legal Information Institute, a lien is a security interest that a creditor obtains in another party’s property. Once a lien is successfully put into place, it will remain effective until the related obligation is resolved.

When appropriate, an employer or workers’ compensation insurer could obtain a lien on the personal injury settlement or judgment paid out by a third party to an employee who filed a workers’ compensation claim for the same accident.

By obtaining that lien, the employer or insurer can recoup their workers’ compensation costs. In essence, this prevents ‘double dipping’, and it ensures that the negligent third party is the one who is ultimately held responsible for the avoidable workplace accident.

California Workers’ Compensation Statute: Subrogation of Employer

Third party claims and workers’ compensation liens are dealt with under California Labor Code Section 3852. This is the state’s workers’ compensation subrogation statute. It is a complex and highly technical area of state law that can be difficult to navigate. That being said, as far as liens are concerned, the statute provides clear rights to employers and their insurance providers.

Section 3852 states that an employer who pays out workers’ compensation benefits to a beneficiary has the right to bring a corresponding legal action against a third party. If a lawsuit—the third-party work injury claim—is successful, then the employer can recover for its costs.

Put another way, an employer or its insurance carrier can bring a subrogation action in order to obtain a reimbursement for the money paid that was already paid out. In many cases, subrogation of a third-party settlement is carried out by filing a workers’ compensation lien.

Call Our Fresno Workers’ Compensation Defense Lawyers for a Confidential Consultation

At Yrulegui & Roberts, our California workers’ compensation defense attorneys are skilled, effective representatives for our clients. We are focused on results. If you have any questions or concerns about liens, subrogation actions, or your rights, we are more than ready to help. Contact us now for a completely confidential, no obligation review of your case. We represent clients throughout the entire region, including in Bakersfield, Stockton, Sacramento San Luis Obispo, and Santa Barbara.