Texas: Comp Carrier May Not Rush in Through Back Door to Claim Lien on Settlement Proceeds

Texas: Comp Carrier May Not Rush in Through Back Door to Claim Lien on Settlement Proceeds

In Texas, as in most other states, an employer and/or workers’ compensation insurance carrier enjoy strong subrogation rights that allow recovery of the workers’ compensation outlay against third parties that may be responsible for all or part of the worker’s injury and resulting damages. Where, however, an employer and a carrier agree to utilize a policy that contains a waiver of the carrier’s right to recover from any third party sued by the injured employee, that clause also bars any attempt by the carrier to recover indirectly from the employee once he or she has received settlement proceeds from a third party, held the Supreme Court of Texas in a split decision. The majority said the carrier could not get “through the back door” what it could not recover “through the front” (Opinion, p. 1). 

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is co-author of Larson’s Workers’ Compensation Law (LexisNexis).

LexisNexis Online Subscribers: Citations below link to Lexis Advance. 

See Wausau Underwriters Ins. Co. v. Wedel, 2018 Tex. LEXIS 519 (June 8, 2018)

See generally Larson’s Workers’ Compensation Law, § 117.01.

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law

For a more detailed discussion of the case, see