How a Lien Can Get Placed on Your Workers’ Compensation Settlement

After an on-the-job injury, the last thing you want (or probably expect) is to find out that part of the potential settlement money you were counting on may not be coming to you. But that’s exactly what can happen if you don’t have an attorney on your side who can guide you through the workers’ comp process after you’ve been injured during work by a negligent third party.

Normally if you receive workers’ comp benefits, you cannot also file a lawsuit related to your injury. If you are injured during work by a negligent person or entity who is not your employer, however, you may be able to file a personal injury claim against them, as well as a workers’ compensation claim with your employer. This allows you to pursue compensation for damages that workers’ compensation does not cover, such as pain and suffering.

If you receive an injury settlement on top of workers’ comp benefits, your employer or their workers’ comp insurance company will likely place a workers’ compensation lien on the settlement from your personal injury claim.

A workers' compensation lien is a legal claim on a settlement for reimbursement of the wc benefits paid.

Don’t panic. I help injured workers routinely with workers’ comp cases that involve liens on their personal injury settlements. In this article, I’ll explain how workers’ comp liens work in North and South Carolina.

Call us if you have been injured at work. Whether you were at fault, nobody was at fault, or someone   other than your employer or a coworker was at fault, call us today at 1-866-900-7078 for a free case evaluation. We can answer your questions and help give you peace of mind as you navigate through these legal issues.

How Do Workers’ Compensation Liens Work in North and South Carolina?

Workers’ compensation laws in North and South Carolina prohibit injured workers from “double dipping” (getting paid twice for the same accident). That means that if you file both a workers’ comp claim and a personal injury claim against a third party, your employer or workers’ comp insurance company can file a lien against your personal injury case settlement. By placing a lien, they are seeking repayment of the workers’ comp benefits they already paid to you.

Example of a Workers’ Comp Lien

Bob, a pizza delivery man, was hit in his delivery truck by a drunk driver while driving to deliver a pizza. His injuries were pretty severe, and he filed both a workers’ comp claim and a personal injury claim against the drunk driver. When you sue someone who’s not your employer or their insurance company for your on-the-job injury, this is called a third-party claim.

While the third party personal injury case dragged on, Bob received medical care and lost wage benefits from his employer’s workers’ compensation insurance company. As required by law in NC and SC, Bob informed his employer that he had filed a third-party personal injury claim. When that claim settled a year later, the insurance company filed a workers’ comp lien on the settlement for reimbursement of benefits it had provided Bob.

In general, the attorney handling your personal injury claim will be the one who negotiates with the workers’ comp insurance company about any workers’ comp lien. At my law firm, our personal injury attorneys work closely with our workers’ compensation attorneys on cases like Bob’s. Our common goal is to try to get you as much as possible, as quickly as possible, without you having to worry about surprise liens down the line. This helps gives you peace of mind after your work injury or illness.

Are you getting everything you may be owed for your injury at work? Call us today at 1-866-900-7078 for a free case evaluation.

What Is a Third-Party Settlement?

A third-party settlement is the amount agreed upon by someone other than the employer and their insurance company to settle a personal injury case for an on-the-job injury. Under NC and SC law, the third party generally cannot be the employer, manager, or another employee who is associated with the workers’ comp case.

In the example above about Bob, the pizza delivery driver who got hit by a drunk driver on the job, the third party would be the drunk driver. Bob could bring a personal injury claim against that driver that would allow him to also seek compensation for pain and suffering from the trauma of the accident, and possibly for punitive damages, which are not compensable in the workers’ compensation system.

If the personal injury claim is successful, Bob’s employer, or the workers’ comp insurance company, could seek to impose a workers’ comp lien on Bob’s third-party settlement to reimburse themselves for the costs that they have already paid.

What do you do if you’re faced with a workers’ compensation lien?

How a Workers’ Comp Lawyer Can Help You With Liens

One of the ways a workers’ comp lawyer can assist you if you have both a workers’ comp claim and third-party injury case is to request a lien waiver from the employer or their insurance company so that the lien isn’t taken from the personal injury settlement.

As a workers’ compensation attorney licensed in North and South Carolina, I strategize with my clients to determine if a lien waiver is in their best interests. If we agree that it’s optimal to request to waive the lien, it’s important to determine the value of the lien waiver.

If my client’s potential workers’ comp settlement is reduced by the value of the lien, I will make sure their personal injury lawyer knows the value so that they can strive to negotiate a third-party settlement for their personal injury case that is at least that much.

Deciding on whether or not to negotiate a lien waiver can basically be part of a workers’ comp settlement discussion. Sometimes, I advise clients to keep a lien in place if I believe it will help maximize the recovery of their personal injury case settlements.

A man with an injured wrist meeting with his workers' comp lawyer.

My firm has an experienced personal injury department and workers’ compensation department that work together as needed when strategizing on how to negotiate with the insurance company to try to obtain the highest possible settlements for our clients. Our clients can have these claims handled jointly within one firm, so that the attorneys are able to strategize on trying to achieve the highest net recovery for our clients.

The Workers’ Comp Team at James Scott Farrin Is Ready to Help You

At the Law Offices of James Scott Farrin, our workers’ compensation team has the knowledge and experience to help you navigate your workers’ compensation case. And just as important, we have the compassion and integrity to put you and your needs first.

Our attorneys can help you because:

  • We have inside knowledge
    We have people on our team who have worked for insurance companies and insurance defense firms, and we use this inside knowledge when we strategize with our clients on how to approach their cases and fight for maximum compensation.
  • We know workers’ compensation law
    Our workers’ comp attorneys are recognized professionals in their field who have spoken at workers’ compensation seminars for other attorneys. Several of our attorneys have been recognized by their peers with prestigious workers’ comp awards.
  • We are here to fight for you
    We have 15 office locations in North Carolina, one in South Carolina, and our team takes workers’ comp cases all across both states. We can even come to you!

Call us today at 1-866-900-7078 for a free case evaluation.


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About the Author

Casey Day practices workers’ compensation law for the Law Offices of James Scott Farrin and has experience on both the defense and plaintiff sides. She is licensed in North Carolina, South Carolina, and Virginia and is a North Carolina State Bar Board Certified Specialist in Workers’ Compensation law. Casey was honored on the “Best Lawyers: Ones to Watch” list for Workers’ Compensation Law – Claimants by Best Lawyers in America for 2021 and 2022.a Casey regularly contributes her time to helping the underserved through pro bono legal work.

aFor “Ones to Watch” standards of inclusion, visit