In a case where the injured worker failed to commence suit against the liable third party, we were able to use the statutory rights of subrogation per Section 29(2) of the Workers’ Compensation Law and intercompany loss transfer per Section 5105 of the Insurance Law to secure full reimbursement of what the carrier had paid in workers’ compensation benefits to the claimant. The underlying work accident was a motor vehicle accident in the State of New York, invoking the $50,000 “carve-out” imposed by New York’s No-Fault Law and Section 29(1-a) of the WCL. However, the at-fault vehicle was used “for hire” for the transportation of people (e.g., a taxi), qualifying as a “livery vehicle” for intercompany loss transfer purposes. Additionally, as the claimant failed to commence suit against the at-fault vehicle within 1 year of the accident, LOIS Partner Christopher Major and Senior Paralegal Jenifer Andrews served proper notice of assignment of the third-party cause of action on the claimant pursuant to Section 29(2) of the WCL. When the claimant failed to commence or compromise the third-party cause of action within 30 days of the Section 29(2) notice, we filed suit in the Supreme Court of the State of New York on behalf of the workers’ compensation carrier, in addition to filing for intercompany loss transfer arbitration with Arbitration Forums, Inc. This strategy granted the workers’ compensation carrier two options for recovery from the automobile liability carrier for the at-fault vehicle: intercompany loss transfer for amounts paid “in lieu of first-party benefits,” and a Section 29(2) right of subrogation on all other amounts paid on the claim.
Ultimately, this dual-pronged attack created significant leverage in negotiating a settlement with the adverse carrier as they now had to defend two separate and distinct actions in two different forums. After continued aggressive negotiations, we were able to secure 100% reimbursement of all amounts paid in workers’ compensation benefits to the injured worker. This serves as an example of how cleverly creating leverage can lead to highly favorable results with minimum litigation expenses!
