On February 12, 2016, the Supreme Judicial Court of Massachusetts (SJC) clarified the extent of a workers’ compensation insurer’s lien against an employee’s third party claim(s) arising out of the same incident. The SJC ruled that since the workers’ compensation system does not compensate an employee for pain and suffering damages, the workers’ compensation insurer cannot seek reimbursement for damages paid by a third party for those harms. Rather, the lien is limited to recovery for harms covered by the workers’ compensation system, such as lost wages and medical expenses. The decision notes that any concern that an employee will attempt to allocate most or all of a third party recovery to pain and suffering damages to avoid the statutory lien can and should be addressed by a workers’ compensation insurer through the settlement approval process required by G.L. c. 152, s. 15.
A link to this decision in the matters of Robert M. DiCarlo v. Suffolk Construction Co, Inc. (SJC-11854) and Bernard J. Martin v. Angelini Plastering, Inc. (SJC-11853) is attached below: