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Workers’ Compensation Carrier Which Consents to Settlement of Third Party Action Is Entitled to Exercise Its Credit Against the Settlement-Recovery Upon Its Consent

The Third Department determined, where the workers’ compensation carrier has consented to claimant’s settlement in a third-party action, the carrier is entitled to exercise its credit against the recovery when the consent is given:

When a workers’ compensation carrier consents to the settlement of a claimant’s third-party action, the carrier shall have a lien on the proceeds of the recovery equal to the amount of benefits already paid, and may also assert the right to offset future compensation benefits paid until the proceeds of the recovery are exhausted (see Workers’ Compensation Law § 29 [1], [4]…). The issue before us again on this appeal is the point at which a carrier is entitled to exercise its credit. As we observed previously in this matter, “there is no reference in the statute as to when the credit shall commence” (104 AD3d at 1014; see Workers’ Compensation Law § 29 [4]). Cognizant of the fact that the statute in question was enacted in substantial part to prevent a claimant from receiving a double recovery …, we agree with the carrier that its right to exercise its credit must be available, if provided for in the consent letter, at the point at which the carrier provides its consent. To hold otherwise would result in payments made by the carrier that are not subject to either lien or credit rights, i.e., those payments made between the date of consent — at which point the amount of the carrier’s lien is fixed — and the date of actual settlement. This resulting double payment to the claimant would be contrary to the intent of the statute.  Matter of Williams v Lloyd Gunther El Serv Inc, 2014 NY Slip Op 03740, 3rd Dept 5-22-14

 

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