CT Court Rules Third Party Payments Can Offset Future Worker’s Comp

July 13, 2010 (PLANSPONSOR.com) – The Connecticut Supreme Court has ruled that a worker’s settlement with a third-party for an injury can be used by an employer to offset future worker’s compensation benefits.

Janice Thomas claimed that the state worker’s compensation board improperly interpreted the statutory lien provision in Connecticut law as applying to future workers’ compensation benefits and that the correct interpretation limits the scope of the lien to the amount of benefits paid by the employer to the injured employee up to the date of recovery from the third party. However, the court agreed with the board that the statutory lien provision includes a right to a credit for future workers’ compensation benefits based on the lien provision’s context and prior case law.  

According to the opinion, Thomas sustained various injuries when she fell on an icy walkway leading to her workplace. She filed a claim for workers’ compensation benefits and asserted a third party liability claim, which settled for $45,000. Thomas reimbursed the employer for the then outstanding lien of $2523.43 already paid in worker’s compensation benefits.  

However, following the settlement, the employer claimed that its lien entitled it to a credit for unknown, future workers’ compensation benefits that it may become obligated to pay to Thomas equal to the full amount of the Thomas’ proceeds from the settlement.   

The commissioner ruled in favor of Thomas, but that decision was reversed by the board on appeal by the employer. The board acknowledged that the lien provision was silent with respect to its scope, but concluded that it could discern its meaning by reading the lien provision in light of the law as a whole and considering the public policy discouraging a claimant’s double recovery.  

The court opinion is here.