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Worker’s Compensation Carrier Was Entitled to Credit for Amount Claimant Recovered in Civil Suit against Employer and Co-employees

In a full-fledged opinion by Judge Read, over a dissent, the Court of Appeals determined the worker’s compensation carrier, the NYS Insurance Fund (SIF), was entitled to a credit against the claimant’s future worker’s compensation benefits in the amount of her recovery in a lawsuit against her employee and a co-employee:

Workers’ Compensation Law § 29 (1) provides that an employee injured by “the negligence or wrong of another not in the same employ” may commence an action against “such other.”  If the employee has received workers’ compensation benefits, SIF or the other entity or person liable for the payment of these benefits

“shall have a lien on the proceeds of any recovery from such other, whether by judgment, settlement or otherwise, after the deduction of the reasonable and necessary expenditures, including attorney’s fees, incurred in effecting such recovery, to the extent of the total amount of compensation awarded under or provided or estimated . . . for such case and the expenses for medical treatment paid or to be paid by it and to such extent such recovery shall be deemed for the benefit of”

SIF or the other entity or person liable for the payment of compensation benefits (Workers’ Compensation Law § 29 [1]). Concomitantly, section 29 (4) specifies that “[i]f such injured employee . . . [shall] proceed against such other,” SIF or the other entity or person liable for the payment of compensation benefits “shall contribute only the deficiency, if any, between the amount of the recovery against such person actually collected, and the compensation provided or estimated . . . for such case” (Workers’ Compensation Law § 29 [4]).

Section 29 (4) is referred to as the carrier’s credit against or right to offset the proceeds of a lawsuit brought pursuant to section 29 (1).  The lien and offset provisions in sections 29 (1) and (4), respectively, “cushion[] the inflationary impact of the cost of compensation insurance and avoid double recovery by the claimant for the same predicate injury”… . Matter of Beth V v NYS Office of Children & Family Services…, 202, CtApp 11-19-13

 

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