SJC: Damages awarded to injured workers are protected

The Massachusetts Supreme Judicial Court has ruled that employees who suffer injuries on the job may keep damages awarded for “pain and suffering” even if they are also receiving workers’ compensation benefits.
 
The Feb. 12 decision in DiCarlo v. Suffolk Construction (SJC-11854) represents a reversal of current practice, under which insurance companies routinely seek reimbursement when “pain and suffering” damages are awarded.
 
Under state law, employees who receive workers’ compensation benefits cannot sue their employers for claims arising from work-related injuries, but they may file claims against third parties for damages arising from those injuries. When an employee recovers damages from a third party, the workers’ compensation insurer is entitled to a lien on the recovery in the amount that the insurer has paid to the employee in benefits.
 
In the DiCarlo case, the SJC was asked to clarify whether the lien may be placed on damages paid by a third party for an employee’s physical or emotional distress as a result of an injury. The SJC ruled that insurers may not seek reimbursement when such additional damages are granted.
 
The ruling applies to both private and public sector employers. It is expected to result in a loss of revenue for workers compensation insurers, which could have an impact on employer premiums.
 
Written by Katie McCue
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