Many times when an employee is injured on the job, he or she may have rights to pursue damages against people or businesses other than his employer. For example, a truck driver may get injured in a car accident caused by another driver. In that scenario, the truck driver has a right to workers’ compensation benefits through his employer and personal injury damages against the car driver (sometimes called the "third party")who caused the accident. 

The Pennsylvania Workers Compensation statute states that the truck driver’s employer and/or its workers compensation insurance company has a right to "subrogation" in the action the truck driver pursues against the other car driver. This means that when the truck driver recovers money from the responsible driver for the accident, he has to pay back worker’s compensation anything that they have paid in wage loss or for medical treatment. This initially sounds like a bad thing, however, it is also helpful in the case against the driver who caused the accident. Because Pennsylvania law allows the workers’ compensation company to recover their money, it also permits the injured worker to use that information to his benefit in the car accident case. Specifically, when the injured worker presents his damages against the other driver, he is permitted to include the specific dollar amounts that the workers’ compensation company has paid for lost wages and for medical treatment. This tends to be very helpful when presenting a case to a jury, as it gives the jury some hard numbers to use in making their determination of how much money to award the injured worker. 

The next step is settlement of the workers’ compensation part of the case. Many times the workers’ comp side is settled while the case against the third party is still ongoing. Typically, in this scenario, the goal is to settle the workers’ comp case by securing a lump sum settlement and also a "waiver" of the workers’ compensation insurance company’s right to subrogation. This means that when the injured worker gets money from the third party, he will no longer have to pay the workers comp insurance back any money. 

The Pennsylvania Superior Court has held that if an injured worker does in fact settle his workers’ comp case and in the process obtains this waiver of subrogation, then his rights against the third party are affected. In late 2007, the Pennsylvania Superior Court issued a decision in the matter of Burke v. Erie Ins. Exchange, 940 A.2d 472 (2007). In its opinion, the Superior Court held that, where an injured worker obtains a waiver of subrogation from the workers compensation insurance, he is no longer permitted to submit evidence of the medical bills paid or the wage loss benefits paid by the workers compensation insurance in the trial against the third party. 

In the Burke case, the plaintiff was actually making a claim against his own insurance company for underinsurance benefits associated with a motor vehicle accident. In that case, the plaintiff had settled his workers’ compensation case and secured a waiver of subrogation. The Court held that he could no longer use the evidence of wages and medical bills paid in any part of his case involving the claim for damages in the car accident. 

Thus, the Burke decision has a substantial effect on the way settlement of a workers compensation case is handled when it involves subrogation. It becomes a balancing act, and a decision making process that has to be handled very carefully. An injured worker has to be very cognizant of where he hopes to get the most value out of his case. An informed, reasoned decision must be made about where to get the best compensation, either from the workers’ compensation case or from the case against the third party. This becomes a case by case analysis that must be done in light of all the surrounding factors on that particular case. 

Abrahamsen, Conaboy & Abrahamsen, P.C., a Scranton, Pennsylvania law firm, offers free consultations for personal injury, auto accidents, products liability, workers comp., social security claims and social security disability appeals. If you have been injured or disabled, you probably have questions: Do I have a case?; Who will pay my medical bills?; Should I talk to the insurance company adjuster?; Am I entitled to wage loss or disability benefits? With offices conveniently located in Scranton, Milford, Lords Valley, Stroudsburg, and Mount Pocono, our experienced attorneys can answer your questions and will work to get the benefits and compensation you deserve. No fee unless we recover for you. DON’T GO IT ALONE! Call or E-mail one of our experienced attorneys to learn about your rights.