Lienholder can't touch pain and suffering settlement damages

The department cannot be reimbursed for pain and suffering damages an injured worker collects from a third party.

Case name: Tobin v. Department of Labor and Industries, No. 81946-7 (Wash. 08/12/10).

Ruling: The Washington Supreme Court held that the Department of Labor and Industries cannot be reimbursed for pain and suffering damages collected by an injured worker in a third-party settlement.

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What it means: The department cannot be reimbursed for pain and suffering damages an injured worker collects from a third party.

Summary: A worker was injured when a crane boom operated by a third party crushed him. The department paid time loss compensation, medical benefits, and pension benefits. The worker sued the third party and settled for $1.4 million in damages, of which nearly $800,000 was for pain and suffering. The department sought reimbursement for the workers' compensation benefits it paid him. The Washington Supreme Court ruled that the department could not include the pain and suffering damages in its reimbursement calculation.

The court noted that it previously held that the department could not seek reimbursement for a type of damages it had not paid out in benefits. In that case, the court held that "recovery" excluded damages for loss of consortium and suggested that other noneconomic damages, such as pain and suffering, may also be excluded. After that holding, the legislature amended the law to define "recovery" as "all damages except loss of consortium." The worker argued that the law also gives the department recovery "only to the extent necessary to reimburse the department . . . for benefits paid." This law was not amended after the court's previous holding. Pain and suffering constitute noneconomic damages that the workers' compensation laws do not compensate for.

The court also awarded attorney's fees to the worker since he prevailed on appeal.

A dissenting judge stated that according to the law, loss of consortium damages are the only exception to the damages the department can recover.

Read more at the WorkersComp Forum homepage.

November 15, 2010

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