Illinois Employer Assignment of Work Comp Lien- must pay 25% Attorneys Fees

6-7-08

Normally an Illinois employer that pays workers compensation benefits is entitled to seek repayment of all amounts paid in any 3^rd party personal injury action brought by the worker against a responsible 3^rd party. In construction injury cases, that responsible 3^rd party is often the general contractor or another contractor on the job site that are blamed for causing the workers’ injury.

In any lien reimbursement action where the employer seeks repayment from the proceeds of the personal injury law suit, Illinois law requires the employer to pay the injured workers attorney 25% of any recovery or reimbursement as attorneys fees. Therefore Illinois employers usually only obtain 75% reimbursement of amounts paid in workers compensation benefits. Meanwhile, the primary defendants will get to set off 100% of the workers compensation payments as a credit or set-off in any award against them to prevent a double recovery by the injured worker.

Where the employer was also negligent or partially responsible for causing the injury, a law suit for contribution is usually brought by the main defendants against the employer. To the extent that an employer is partially responsible for the workers’ injuries, the right to reimbursement will be reduced by the amount or % of negligence of the employer.

Section 5(b) of the Illinois Workers Compensation Act states:

“Out of any reimbursement received... the employer shall pay his pro rata share of costs… and expenses… and where the services of an attorney… of the employee… substantially contributed to procurement… of the proceeds out of which the employer is reimbursed, then, … the employer shall pay such attorney 25% of the gross… reimbursement.” 820 ILCS 305/5(b) (West 2006)

In a recent case, Evans v Doherty ( 1ts Dist., 4/25/08) the employer in a construction injury setting attempted to shirk payment of attorneys fees by giving an “assignment” of the employers workers compensation lien to the primary defendants. The employer had paid out $152,000 in workers compensation benefits and sold their right to reimbursement to Doherty and other primary defendants for the sum of $90,000. The employer in an argument too cute for the court said they received no reimbursement of their workers compensation lien but merely sold their rights to repayment in an assignment of lien. The Court said it was a distinction without a difference and ordered the employer to pay the 25% attorneys fees on the $90,000 they received.

Questions on Illinois workers compensation lien recovery and reimbursement should be addressed by an Illinois workers compensation attorney with practical experience and knowledge in this frequently changing area.

Chicago Workers Compensation Attorneys --WC-Chicago.com 6-07-08