Work Comp Cases that also Involve a Personal Injury Claim

This section explains the Iowa law and procedures for injured workers who have both a workers’ compensation claim against their employer and a personal injury claim arising out of the same incident.

Introduction and Overview

There are numerous situations in which an employee can have both a work comp claim and a personal injury claim arising out of the same accident. One of the most frequent situations comes up in the construction industry where employees of multiple contractors are on the same job. For example, in a large building project a bricklayer on an elevated scaffolding might accidentally drop a tool on an electrician on the ground. The injured electrician has a workers’ compensation claim against his own employer and the work comp insurance carrier of his employer. The injured electrician also has a personal injury claim based on negligence against the bricklayer and the bricklayer’s employer.

The most common situation where an injured worker has both a work comp claim and a PI claim is when the worker is driving as part of his job and is injured in a motor vehicle accident. Later in this section I will use a hypothetical car accident to illustrate how work comp and personal injury law interact.

The Iowa law relating to work comp claims and personal injury claims arising out of the same accident is very complicated. This section explains how the law operates as a general matter. However, there are numerous exceptions, and the specific facts of each case are critical and can lead to dramatically different results. If you have a joint workers’ compensation and PI claim you should obtain the assistance of a lawyer.

The Subrogation and Indemnity Liens of the Workers’ Compensation Insurance Company

The most important thing to keep in mind for cases involving both work comp claims and personal injury claims is that the work comp insurance company has subrogation and indemnity liens that are very strong. This means that the work comp insurance company is entitled to be repaid out of any personal injury settlement or awards for any amount that the work comp insurance company has paid in the past or will pay in the future.

The fact that the injured worker might not be totally compensated by the personal injury settlement or award does not reduce the work comp insurance company’s right to be repaid.

Therefore, an injured worker with both a work comp claim and personal injury claim is not legally entitled to obtain what is sometimes called a “double recovery.”

The work comp insurance company is required to pay the attorney fees and litigation expenses for all amounts that are paid to the work comp insurance company from the personal injury recovery. As an example, an injured worker may have hired a lawyer to pursue the personal injury claim with the agreement that the lawyer would be paid one-third of the recovery. Assume that the injured worker resolves his personal injury claim for $30,000, and there is a work comp lien for $15,000. In the absence of a negotiated alternate settlement, the work comp insurance company would be entitled to receive $15,000. Five thousand dollars would be paid to the lawyer as his fee for effectively recovering money on behalf of the work comp insurance company, and the work comp insurance company would receive $10,000.

Differences Between Workers’ Compensation and Personal Injury Cases

There are several differences between Iowa workers’ compensation law and Iowa personal injury law that also have a large effect in combined cases. The “Overview of Iowa Workers’ Compensation Law” section of this website gives a good introduction to how Iowa work comp law works. This work comp section can be found here. The “Auto Accidents” section of this website gives a good overview of how personal injury law operates in Iowa. This personal injury section can be found here. You can look over these two sections to get an idea of the differences between work comp and personal injury cases. Here are the three biggest differences that come into play in joint work comp – PI cases:

1. In Iowa workers’ compensation cases a worker is entitled to recover if his injury arose out of and in the course of his employment. A simplified explanation of this standard means that if a worker is hurt on the job he is entitled to receive work comp benefits. The injured worker’s entitlement to receive work comp benefits is not negatively affected or reduced even if the worker’s own actions contributed to his injury.

By contrast, Iowa personal injury law uses a comparative fault system that can reduce or completely eliminate the injured party’s right to recover. In every Iowa personal injury trial the jury is instructed to divide the 100% of available fault among any party who contributed to the accident. The apportionment of the fault is then used to determine what percentage of damages each defendant must pay, and what percentage of damages the injured party can collect. By way of example, in a two-car accident if the injured party is 20% at fault, then they can only recover 80% of their damages. If the injured party is 40% at fault, then they can only collect 60% of their damages. If the injured party is 50% at fault, then they can still collect 50% of their damages. However, a key aspect of the Iowa comparative fault system is that if the injured party in a car accident case is found to be 51% or more at fault then they are not entitled to collect any damages.

In some car accidents which involve both a work comp claim and a PI claim, the injured worker may have contributed to the accident. Even though the injured worker contributed to the accident, he is still entitled to collect 100% of his work comp benefits. However, depending on how much the injured worker is found to be at fault for the accident, the amount of personal injury damages he is entitled to receive can be reduced or even completely eliminated.

2. The categories of damages which can be recovered in workers’ compensation and personal injury cases are also different. The types of damages are more limited in work comp.

An injured worker is entitled to receive healing period benefits at his weekly work comp rate for each week he is off work. The worker is also entitled to receive permanent partial disability (PPD) benefits at his weekly work comp rate once he has reached maximum medical improvement.

For scheduled injuries the maximum amount of PPD benefits is based on a value given to each body part. For instance, an arm injury in Iowa has a maximum value of 250 weeks of PPD benefits. If a worker ends up with a 50% impairment of his arm, he is entitled to receive 50% of 250 weeks of PPD benefits which works out to be 125 weeks of PPD benefits.

Work comp injuries to unscheduled body parts such as the shoulder, back, neck, head and hip are based on an assessment of the worker’s potential loss of earning capacity taking into account the injured worker’s age, education, qualifications, experience, motivation, loss of earnings, severity and location of the injury, work restrictions, inability to engage in employment for which the worker is fitted, and the employer’s offer of continuing work or failure to offer continuing work.

In Iowa work comp cases the defendants are also required to pay for the injured worker’s medical care.

By contrast, there are many more types of recoverable damages in Iowa personal injury cases, including:

  • Past medical expenses.
  • The present value of future medical expenses.
  • Past lost wages or lost time from a business.
  • Future loss of earning capacity.
  • Past loss of function of the mind and body.
  • Future loss of function of the mind and body.
  • Past physical mental pain and suffering.
  • Future physical mental pain and suffering.
  • A child’s loss of consortium because of an injury to a parent.
  • A spouse’s loss of consortium because of an injury to a spouse.

3. Workers’ compensation disputes are decided by a Deputy Workers’ Compensation Commissioner, and personal injury cases are generally decided by a jury. The Work Comp Deputy Commissioners are very professional, and the potential range of their decisions is generally more predictable. Iowa juries take their role very seriously, but the range of their potential verdict in any particular case is generally much wider.

Maximizing the Total Net Recovery from the Workers’ Compensation and Personal Injury Claims

The specific facts of each joint work comp and PI case are always critical in determining the best strategy for maximizing the total net recovery.

As a result of the differences in the systems, sometimes the personal injury part of a case is more valuable than the workers’ compensation side. In other very similar cases the workers’ compensation claim is more valuable than the personal injury claim.

Frequently, it works out best for the injured worker to negotiate a joint resolution of the workers’ compensation claim and personal injury claim at the same time. Our lawyers carefully analyze the facts and law in each case to determine the best strategy for maximizing the total net recovery to our client.

Example of a Possible Resolution of Work Comp and Personal Injury Claims Arising out of the Same Accident

In the remainder of this section I am going to discuss a hypothetical set of facts to help explain and discuss the legal and strategic issues that come up in a joint work comp-personal injury case. It might seem like a lot of factors, but this is actually a simplified hypothetical. Real cases are usually more complicated. Here is the hypothetical situation:

  • The name of the injured worker is Mr. Worker and his job is to deliver auto parts.
  • Mr. Worker is employed by Delivery Services, Inc.
  • The work comp insurance carrier for Delivery Services, Inc. is Work Comp Insurance Company.
  • Mr. Worker was involved in a collision in the middle of an intersection that is controlled by traffic lights.
  • The name of the other driver involved in the collision is Mr. Adverse-Driver.
  • Mr. Adverse-Driver has liability insurance for his car with Auto Insurance Company.
  • There is a legitimate dispute over whether Mr. Worker or Mr. Adverse-Driver had the green light and the right of way.
  • Mr. Worker suffered a low back injury that required surgery. The medical care cost a total of $15,000 and was paid for by Work Comp Insurance Company.
  • Mr. Worker was also off work for 15 weeks following the accident. Work Comp Insurance Company paid Mr. Worker $500 per week in healing period benefits while he was off work. Therefore, the total of healing period benefits that was paid is $7,500.
  • After 15 weeks, Mr. Worker was able to return to work but he is now having a much more difficult time doing his job.
  • Work Comp Insurance Company voluntarily paid Mr. Worker an additional 30 weeks of Permanent Partial Disability (PPD) benefits at the rate of $500 per week. Therefore, the total of PPD benefits that was paid is $15,000.
  • Therefore, Work Comp Insurance Company has paid a total of $37,500 to or on behalf of Mr. Worker. ($15,000 of medical benefits + $7,500 of healing period benefits + $15,000 of PPD benefits = $37,500).
  • The future medical expenses will be $10,000.
  • If the work comp case went to trial, Mr. Worker would probably receive additional “new money” PPD worth between $75,000 and $100,000.
  • In the personal injury trial there is a 50% chance that the jury will find Mr. Adverse-Driver 100% at fault. This means that Mr. Worker will be entitled to receive all of his personal injury damages. There is a 50% chance that the jury will find that Mr. Worker was 100% at fault for the accident. This means that Mr. Worker would not be entitled to receive any damages in the personal injury case.
  • If the personal injury case went to trial the jury would probably decide that the damages were in the range of $25,000 to $75,000.
  • Mr. Driver has hired an attorney to pursue a personal injury claim against Mr. Adverse-Driver, and also to pursue additional workers’ compensation benefits against Work Comp Insurance Company. Mr. Worker has entered into a Contingent Fee Agreement in which his lawyer will be paid one-third of any additional amounts he can recover on behalf of Mr. Worker.

Here is a simplified version of the factors that the injured worker and his lawyer need to take into account:

  1. The Work Comp Insurance Company is entitled to be repaid from any settlement or award even though the liability for the accident is unclear. Therefore, the Work Comp Insurance Company would be entitled to be repaid $37,500 unless the parties agree to an alternate plan.
  2. Additionally, to the extent that the injured worker received a settlement or award, the Work Comp Insurance Company would not have to pay any future benefits until the total value of the settlement or award has been “used up.”
  3. Work Comp Insurance Company would like to be repaid the entire past amount of money it has already paid out. However, Work Comp Insurance Company also wants to minimize its exposure for additional PPD benefits.
  4. Auto Insurance Company wants to pay as little as possible towards the claim, but avoid the risk of the case going to trial and potentially having to pay a substantial verdict.
  5. Mr. Worker would like to collect the most possible money for his injuries, and maintain his future medical coverage for his work injury through Work Comp Insurance Company.
  6. Mr. Worker would prefer to avoid the risk of a trial in the personal injury case which he might lose.
  7. Mr. Worker would prefer not to have to re-pay any money to Work Comp Insurance Company.
  8. Mr. Worker can point out to Work Comp Insurance Company that if it is not willing to compromise its lien, then Work Comp Insurance Company might end up getting repaid nothing. The reasoning is that in a trial against Mr. Adverse-Driver, the jury might decide that Mr. Worker is more than 50% at fault, and therefore is not entitled to recover any damages in the personal injury case.
  9. Taking this risk of a verdict in favor of Mr. Adverse-Driver into account, Work Comp Insurance Company might be willing to waive some or all of its recovery rights. Work Comp Insurance Company might also be willing to pay additional PPD to resolve the workers’ compensation case.

Therefore, taking into account all of the factors at play and the uncertainties and dangers that Mr. Worker is facing, a good negotiated result might be:

  1. Work Comp Insurance Company pays Mr. Worker an additional $40,000 of PPD benefits.
  2. Work Comp Insurance Company waives its right to be repaid anything out of the personal injury settlement.
  3. Work Comp Insurance Company agrees that Mr. Worker’s right to future medical benefits will remain in effect.
  4. Auto Insurance Company pays Mr. Worker $40,000 as a compromise settlement taking into account the range of potential damages and the chance of a jury verdict in which Mr. Worker would not receive anything.
Conclusion

Joint work comp and personal injury claims are complicated. Call or email us now, and our lawyers will be happy to talk to you about your case. We will answer any questions you have without charge or obligation