Florida Statute 440.39 provides the statutory framework for an Employer/Carrier’s entitlement to lien recovery. Manfredo v. Employer’s Casualty Insurance Company, (560 So.2d 1162, Fla. 1990) and City of Hollywood v. Lombardi, (770 So.2d 1196, Fla. 2000) further interpret the statute and establish the formula to calculate the lien percentage. In short, the Employer/Carrier’s lien percentage is dictated by the claimant/plaintiff’s net third-party settlement recovery as compared to the “actual value” of the third-party claim. The challenge in resolving workers’ compensation subrogation liens is determining the “actual value,” as the full valuation of the third-party claim can be debated by reasonable parties. 

If the third-party action is litigated, the Employer/Carrier will need an attorney to file a Notice of Lien on its behalf. If the third-party action is not litigated, the Employer/Carrier does not require an attorney but must notify the parties of its lien in a timely manner. Failure to timely notify the third parties of lien entitlement could result in waiver of the lien. Ultimately, it is recommended that a subrogation attorney be retained for several reasons: (1) To ensure proper/timely notice of the Employer/Carrier’s lien, (2) To investigate the relevant third-party issues that will impact the settlement value, the “actual value” and consequently the lien percentage, (3) To assist with negation and resolution of the lien and (4) To draft a Lien Stipulation to memorialize the terms of the lien.  

The statute and case law allow for lien recovery related to past and future indemnity and medical payments. If the third-party claim settles, and the workers’ compensation claim remains open, the Employer/Carrier is permitted to offset future indemnity and medical benefits by the lien percentage agreed to by the parties. However, the total amount recovered by the Employer/Carrier (i.e., lien recovery of past and future benefits) cannot exceed the Claimant/Plaintiff’s net third-party recovery. Waiving a future offset but increasing the lien recovery related to the past benefits, is a strategy that can be considered by the Employer/Carrier due to the administrative difficulties in monitoring the future offset to not exceed the net recovery.