Preston, Wilson & Crandley, PLC Success in the Virginia Supreme Court on the Issue of Arbitration of Workers’ Compensation Insurers’ Liens in Personal Injury Cases

Jack Crandley was recently involved on the winning side in the case of Hartford Underwriters Insurance Company, et al v. Allstate Insurance Company, et al. This is a decision of the Virginia Supreme Court, handed down on December 8, 2022, resolving an issue which had become problematical in personal injury cases, when the plaintiff was within the scope of his employment at the time of the injury, and was therefore entitled to workers’ compensation benefits in addition to the claim for damages he was making against the at fault driver. In recent years, workers’ compensation insurers had attempted to utilize arbitration to collect their workers’ compensation liens directly from the insurance company for the at fault driver, without making any allowance for a fee for the attorney for the injured plaintiff and reimbursement of costs incurred by the injured plaintiff.

Because of a recent amendment to Virginia’s Workers’ Compensation Act, the Virginia Supreme Court agreed that a workers’ compensation insurer could no longer utilize arbitration to require the insurance carrier for the at fault driver to pay the amount of the worker’s compensation insurer’s lien, to the exclusion of the rights of the injured person. The Virginia Supreme Court held that, while the workers’ compensation insurer had a lien for payments it made to the injured employee, such lien could not be collected until the claim by the injured employee against the at fault driver was either settled or taken to verdict at trial. The decision of the Virginia Supreme Court therefore protects the injured plaintiff in respect to an allowance out of the workers’ compensation lien for a reasonable attorney’s fee and reimbursement of costs, and also protects the at fault driver in respect to his liability insurance, preserving it until such time as the injured plaintiff’s claim is settled in its entirety or is taken to trial to verdict or judgment. In essence, this decision of the Virginia Supreme Court places control of the injured plaintiff’s claim against the at fault driver with the attorney for the injured plaintiff, and prevents a workers’ compensation insurer from interfering with the orderly resolution of an injured plaintiff’s claim against the at fault driver by settlement or judgment.

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Our personal injury attorneys handle injury claims ranging from minor sprains and strains to catastrophic brain injuries and wrongful death claims. Moreover, our firm has been successfully representing people in injury cases in Virginia since 1955. Give us a call and put our experience to work for you.

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