Florida’s Collateral Source Rule & Workers’ Compensation Liens

worker.jpgPeople harmed in accidents by the negligence of others often have available to them other sources, such as private insurance and governmental programs, to provide lost wages and medical benefits while they wait to be compensated by the tortfeasors (at-fault parties) for their losses. Florida Statute 768.76 calls these other sources collateral sources.

768.76(1) permits a tortfeasor an offset in the amount of any collateral source of indemnity and medical benefit unless the source of indemnity has a right of subrogation. In other words, if the recipient of the collateral source benefits does not have to repay the providers, the tortfeasor does not have to pay for them.

The reasoning behind this principle, known as the Collateral Source Rule, is to prevent victims from receiving a windfall.

Workers’ compensation is a collateral source. People hurt in work-related accidents by the negligence of third parties, may be entitled to both workers’ compensation benefits and compensatory damages from the tortfeasors (third parties).

Florida Statute 440.39
grants subrogation rights to workers’ compensation insurance companies to the compensation injured workers receive from third parties. This means that workers’ compensation carriers are to be reimbursed from the money injured workers receive from tortfeasors. This prevents injured workers from receiving a windfall and tortfeasors from receiving offsets.

Workers’ compensation cases are frequently settled for a lump sum amount. It is not uncommon for carriers to waive their subrogation right in connection with settlements.

Since the waiver means that injured workers do not have to repay the workers’ compensation insurance companies, does this mean that tortfeasors are entitled to the offset? Surprisingly, the answer is No.

The leading case on the subject is Bruner v. Caterpillar, Inc., 627 So.2d 46 (Fla. 1st DCA 1993). The court reasoned that claimants pay for the waiver, usually in the form of a lower lump sum payment, therefore, it is not a windfall for them to be compensated fully by tortfeasors without benefit of the offset.

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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.