- Hi, how you doing today? I'm Glenn Johnston, and I'm an associate here at Lois Law Firm. You can reach out to me at the office any time with any questions on what we're about to talk about today. - And my name is Chris Major. I'm likewise an associate here at Lois Law Firm, and you can reach either of us at 201-880-7213. And today, we're going to be talking about section 29, liens and subrogation in New York. - So, let's assume, first off, that there's a workers' compensation claim. - So, when we have a workers' compensation claim, when there is a potential third party action is if there's another party involved, so the questions we're gonna ask at the outset of any such thing is, is there an actual tortfeasor, i.e., somebody other than the claimant or employer who might be responsible for the claimant's injury? Has the claimant already filed the lawsuit against said tortfeasor? And was the employee's injury the result of somebody else's negligence? - So let's look at what the facts of any typical loss might be, and we're gonna watch a little an-- Right off the bat, we're gonna see a guy-- - Who's having a wonderful day. - A wonderful day at work. He's just walking to his car with his briefcase. - I wish I were this guy until now. - Yeah, and then it gets bad, okay. - Yeah, right. - So what do we ask? Well, we wanna know who maintained the garage, who owned the garage, and who may be at fault that might be the subject of a third party action in this instance. - So let's talk for a moment about reimbursement versus subrogation. So reimbursement is sort of self-explanatory in the sense that you've paid an amount out and workers' compensation benefits, assume the claimant has already filed their third party action against the, going off our prior example, owner of the garage, or the person who maintains the garage. You have a section 29 lien on that case, and when that case ultimately settles, you'll be reimbursed for compensation benefits paid. Subrogation is when you're stepping into the shoes of the claimant and we'll discuss this a little later on, but the claimants gonna decline to file their own case for whatever reason. Maybe they don't want the hassle, and we have a statutory right as an employer or insurance carrier to step in and subrogate the claim. Now, what's important to note and what's unique to New York among other workers' compensation reimbursement statutes is that it's not either/or in this scenario. You can both collect a section 29 reimbursement, and you can also subrogate the claim, and you might see this situation arise where there is two distinct causes of action. Maybe a medical malpractice claim that the claimant declines to file after, say, they get injured, they go in for surgery, doctor botches the surgery, maybe they got injured by a third party, maybe they declined to file the med mal claim and maybe we find merit in it, and so we can both get reimbursed from the personal injury claim, and subrogate the med mal claim in that example. Now, section 29 is self-executing, so it's going to automatically apply to any third party action filed by the claimant. - Now one of the things that we do to preserve reimbursement rights is we need to make sure that all parties are on notice. Now, section 29 is itself self-effecting, meaning that notice isn't required in order to put the section 29 lien into effect, but as a best practice, you should always put all parties on notice as soon as possible. The other thing you wanna make sure that you do is to monitor any civil claims that you're talking about, and in the instance that Chris just talked about with multiple claims, you're gonna want to monitor all of the claims, so that you know what stage they're at for your subrogation. - And then, as far as putting the parties on notice, we also think it's best practices to include what the current amount is paid in workers' compensation benefits, so this way, you know that whatever your section 29 lien in is gonna be accommodated in the third party settlement or considered, in any offers going back and forth between the parties. So we have a number of resources to check in on the status of these third party claims. The big one we use in New York a lot is eCourts. You can see up on your screen there, for those of you listening at home or at work, you would enter the index number of the case. This is assuming you have it in a cooperative plaintiff's or defendant's attorney who's willing to give you the information. You'll see on the left side there, on eCourts, there's a party search functionality. This is if you can't get ahold of the other attorneys involved, you can search by the claimant's last name, first name, you can search by defendant. I think it's important to note that there are additional resources to find cases. One of them is the New York State Courts Electronic Filing System, NYSCEF. A lot of cases that are newly electronically filed will be available there, and the documents will be available to view. You can get the complaint, answer, all such things, you can usually get those on eCourts, too, but if you don't find it on eCourts, it might on the NYSCEF, and finally, a last resource to keep track of what documents have been filed would be the county clerk's minutes, where the action was filed, but typically, you're gonna need the index number to do that. - So, let's go to the more important question in all of our minds. How much do we get back? Okay, if the third party award is greater than the payments we've made, we're going to get everything back, minus attorney fees and costs, as per the outcome of the Kelly case. If the third party award is less than our payments made, we still get everything minus attorney's fees and costs as per Kelly, but we also get a future credit against our claims, under the Bissell case. - So let's talk for a moment about maximizing your section 29 reimbursement. Ah, so what we're going to do is we're gonna wait for an offer to settle in the third party claim. We essentially are not going to get involved in the parties litigating between each other until there's some money on the table. That's when we step in and make sure that our right to reimbursement is represented and protected at the table. So, through personal experience, there are a couple of, let's just call them tricks, plaintiff's attorneys will love to use. Big one is threatening to abandon the claim, and Glenn, I think you know that no attorney that has litigated a case to conclusion is going to walk away from the attorney's fee at settlement, right? - I've never seen it, never. - Okay, okay, so you can often go ahead and call that bluff and assume that that's an empty threat. Another favorite line of plaintiff's attorneys, every case I've ever done with a section 29 lien is settled for a third, a third, a third. My client gets a third, I get a third, you get a third. Okay, I actually have had situations where I've been told that's in a statute. False, there is no such thing as a third, a third, a third. Your section 29 lien and reimbursement right are statutory entitlements, so you are entitled to that money less cost of litigation as per Kelly, so, when they tell you that they, you have to waive a portion of your lien to get their client to consent to settle, no. No, there is no such thing as a third, a third, a third, and finally, another common trick is inventing an emergency and attempting to pass it onto you as a way to get you to reduce your lien, and a big one with this is case is on for summary judgment in a week and I think we're gonna lose, or my favorite, the defense carrier is here with their checkbook today and they're ready to cut a check for a million dollars, and if you don't consent right now, we're all gonna walk away with nothing. Well, if that's true, you're walking away from what, essentially, 300,000-dollar attorney's fee. I'm not buying it. - Not gonna happen. - Yeah, wait them out. - So there's a couple of other things you need to consider when thinking about how to maximize your reimbursements. One of them, and probably the most important is that we may have access to more information about what happened initially than any other participant in the case. Remember that we've been getting information since the day they had their accident, because they wanna get paid for that lost time, and those injuries as soon as it happens at work, so everything's in early and complete in the workers' comp files, so we may have more information. We also can suggest experts that may assist in the prosecution of the case, because we've already dealt with them early on in the workers' comp case, whether it be for medicals or other issues. We also may have more experience with certain kinds of cases, and certain types of injuries, and more importantly, we may have better relationships with the defense counsel than plaintiff's counsel might have. - Because we know everyone gets along in the world of personal injury law, correct? - Especially in New York. No acrimony whatsoever. - I think my colleague here is being a little sarcastic. - Maybe a little bit. So, the other thing to consider there is subrogation counsel, you, are gonna be viewed as a neutral observer by a mediator who may help the mediator find an avenue to reach consensus, and that's important, because basically, up until there's money on the table, we are neutral, so everybody's gonna look to us as the voice of reason when we're at the table to begin-- - So let's talk about the right of subrogation now, and if you remember, back to earlier in the presentation, this is stepping into the shoes of the claimant. So the word subrogation comes from the Latin, subrogatus, to put into the place of another, substitute for another. Plain English, step into the shoes of another. - I learned some Latin today. - Congratulations. - So, can we subrogate? - Yes, we can. - And that's under workers' compensation law section 29, which we're talking about. So let's take a look at another situation where something may occur. - So this gentleman is going on a big business trip or maybe going on vacation, oh, and his day is ruined. So, as opposed to the prior example of the gentleman in the parking garage, there's a unique situation here. - Well, before we even get to the unique situation, now we gotta ask those questions. Who owned the hallway? Who maintained the hallway? Who may be at fault? Who can we sue? - Well, turns out, he's not suing anyone, and so, this is where the right of subrogation kicks in. So-- - What we can subro, okay. Just so you're aware of it, we can subrogate any claim against an actual tortfeasor, subject to certain limitations. That includes subrogation of a medical malpractice claim, as we discussed earlier. That also includes subrogation of a legal malpractice claim, say, the attorneys involved messed something up and there's a legal malpractice claim, there's money on the table that can help us recover money on the workers' comp payouts. It's something we wanna pursue. We can also even pursue contribution from the employer but only where there is a grave injury, and the definition of grave injury was covered with a podcast, I believe, with yourself and Chris. - Christian Sison, yes, but a grave injury is, the grave injuries are specifically enumerated under workers' compensation law section 11, AKA the exclusivity provision, saying that you can't sue your employer for a work-related injury unless you have one of these grave injuries. So, the notice requirement. If you remember, we have to provide notice that we're going to step in and subrogate this claim, so you need to afford the claimant 30 days' chance to file their own claim, and please continue. - Well, the employer's right to subrogate begins within one year from when the action accrued, which is your date of loss or injury, or six months after the awarding of compensation, whichever comes first, but only 30 days after the injured worker has been notified in writing by personal service or by certified mail. One of the absolute musts that has to happen when you send that notification is that you have to tell them that a failure to commence an action within that 30-day period operates as an assignment of the claim to the employer. But let's think about that for a minute. You're sending this to the claimant. They're not gonna be as sophisticated as a lawyer would be, so you have to follow certain guidelines and make sure that you explicitly state, as part of that notification, that one, you don't represent their interests, two, if they do decide to bring a claim, they need to let you know, so that you can make adjustments and stop any claims action that you have that's involved in that subrogation right. Do you have any other feedback on that? - Yeah, operate as an assignment may seem like a sort of plain English kind of thing. I just think that it makes a lot of sense to follow up on what the consequences are of this so-called assignment, so usually followed up with a sentence to the effect of this means if we file this suit and obtain any judgment, settlement, order, award, that's going to bar your right to file a claim against this person based on this injury. Once we obtain this award, that's it. You no longer have the right to file this claim, and we're only going after what we've paid in comp. We're not trying to get this person the maximum under somebody's insurance policy. We're just interested in a reimbursement here, so a lot of times, we'll find that this actually will be the kick in the butt that the claimant needs to step in and save us a lot of this legwork. - So what limitations are there under this subrogation? - Right, so this dabbles into the world of motor vehicle and insurance law in New York, and this is not motivated by self-interest whatsoever, but myself and Christian Sison, a partner here at Lois Law Firm, did a pretty extensive podcast on loss transfer arbitration and first party benefits and what have you. First party benefits are defined in New York insurance law, 5102, 5104. Long story short, the first 50,000 of benefits paid, basic economic law, as it's referred to, the carrier does not have a lien for. So effectively, it's sort of operates as a carve out to your section 29 lien, right? So you've paid out 100,000 in comp from a motor vehicle accident. Your reimbursement right is 50,000 with a few caveats. As for the uninsured motorist benefits and the underinsured motorist benefits. - Well, the uninsured and underinsured are similarly carved out because when you think about it, when did those arise? They arise when either the claimant has insufficient insurance limits, or they have no insurance, or they've been hit and run by somebody, they don't who the person who did it is, or they've been hit by somebody with not enough insurance, or no insurance. So again, it would operate in the same way that a first party benefits claim would, and pay out, so by trying to recover that money, would be, essentially be making the claimant pay for their own workers' comp case, which we can't have. - Right, and in situations like this, from a common sense perspective, it makes sense to think about the party that's actually responsible, the guilty party here. It's not the claimant, it's not their insurance carrier, it's the guy that did the hit and run. Now insurance law 5105, this is the world of intercompany loss transfer arbitration. Again, you can-- - Say that five times fast. - Yeah, really. You can check out LoisLLC.com. We've got a couple articles on this. Again, myself and Mr. Sison's podcast, but there is basically two requirements where you can pursue as a workers' compensation carrier, what's called loss transfer with the third party defense carrier. There is two situations in which this applies. There is the so-called weight requirement and the livery requirement. I'm not gonna go too deep into that, but if the car weighs, if any car in the accident weighs over 6500 pounds unladen, the case qualifies for loss transfer or if the vehicle was used principally for the transport of persons or property, I think, is the way they phrase it, AKA, the livery requirement, you're talking about your taxicabs, that kind of thing, as transportation of property doesn't mean the neighborhood bakery delivering their rolls to their buyers. That's not a company that's hired to transport property. Here you're talking about your common carriers, UPS, FedEx, et cetera, et cetera, et cetera. For loss transfer, you have to wait one year plus 30 days, and yeah-- - Well, it's also important to know with loss transfer recovery arbitration, all insurers in the state are required to submit to that as part of their contract with the state, so everyone who has an insurance policy in the state with automatically go into that 5105 loss recovery transfer arbitration as a matter of statute. - And where this loss transfer actually applies, the way it ends up shaking out is, it's just your recovery win loss transfer applies. Again, it's just your section 29 recovery is gonna come from multiple sources, so you're gonna have the 50,000 in the prior example of the 100,000-dollar motor vehicle accident, or 100,000-dollar you've paid in comp benefits. Other, in any other case where loss transfer didn't apply, there's a 50k carve out. When loss transfer does apply, you have your 50k lien, and then you have the 50,000 you can get from, in intercompany loss transfer arbitration from the carrier for the liable defendant tortfeasor or driver. - All right, so there are a couple of problems that may crop up when you're dealing with these subrogation claims. The first and foremost that everybody expects is the cooperation of the claimant with discovery and general prosecution of the claim. Now earlier, I had said that we have access to a lot of the information early on in the case, but at a certain point when claimants feel that their interests aren't being served, they may clam up, so when you proceed with these sorts of subrogation matters, be aware of the minefield that occurs when you're trying to obtain discovery and prosecute the claim with the assistance of the claimant, 'cause remember, you don't represent them, you've told them you don't represent them, and they may get the impression that it's against their interest to cooperate. So your job is to make sure that they understand that you're not trying to keep them from money that they deserve in these instances. - Right, and you have, as with the section 29notice, where you advise the claimant you're gonna step in and subrogate, in many of these situations, well, if you're subrogating, there's almost a per se chance that they're gonna be unrepresented, so again, you're talking to a layperson, and it's important that even though your interests may align with the claimants had they filed their own case, where you're both hoping for the maximum reimbursement, and you're stepping into the shoes of the claimant, you do not represent the claimant. You represent the employer or their insurance carrier, so you gotta be careful about giving any legal advice to this claimant when you're seeking discovery information, you'reparticular sort of information or notice for discovery and inspection, all those civil discovery advices. You gotta be careful not to come across as though you're representing the claimant's interests and giving them any sort of advice. Okay, so statute of limitations. So if you remember, we talked about the notice requirement for section 29, so, you gotta keep track of dates here, so for personal injury and motor vehicle accidents, you're looking at a three-year statute of limitations. That means the date the accident happens, three years from then, you have to file suit, or your claim is barred. Now, you do have to wait to subrogate a claim, right? - Yeah. - Yeah, so-- - One year plus the 30-day notice requirement. - Yeah, or the six months-- - Six months, yeah. - After comp benefits are paid, so, in a situation like that, say, you're waiting one year after the injury occurred, if the claimant gets hurt in 2017, by 2018, they haven't filed their own claim, you have until 2020 unless my math is off, lawyers-- - I think you're right. - Lawyers and math are oil and water, but yeah, you have until 2020 to file that claim, so within those two years, you're gonna wanna make sure you get that section 29notice out as soon as possible. You wait the 30 days, claimant doesn't take any action, that's when you file your case. - And never forget that the med mal actions are a separate statute of limitations in New York, at 2 1/2 years, so if med mal is involved, you've got six months less. So, we have a few more of these webinars coming up. That's pretty much it for today. So on January 18th, we have another webinar, titled New Scheduled Loss of Use Guidelines in New York, and on January 15th, we have Section 32 Settlements and Medicare Secondary Payer in New York , and then again on February 19th, we have Appeals in New York in Post Trial Practice. We have more webinars coming up in the new year so stay tuned and we look forward to hearing from you. Thanks a lot. - And again, this is Chris Major with Lois Law Firm signing off, and my colleague. - Glenn Johnston. Thanks for listening.