Section 7.10 Workers’ Compensation

• Library: Insurance Practice 2015

Section 287.150.1, RSMo 2000, provides that an employer is subrogated to the rights of the employee, or dependents, when a third person is liable to the employee or dependents for injury or death. Subsection 6 of § 287.150 was added by the Missouri legislature in 1993 and provides that each workers’ compensation insurance policy “shall require the insurer to diligently pursue all subrogation rights of the employer,” except that the insurer and employer may enter into compromise agreements in lieu of the insurer pursuing subrogation against a third party.

When the employee obtains a recovery from the tortfeasor, the employer receives reimbursement for the sums paid in workers’ compensation benefits minus its share of expenses and attorney fees incurred by the employee in prosecuting the action against the third party. The balance is apportioned between the employer and employee in the ratio the amount due the employer bears to the total recovery. William H. Pickett, P.C. v. Am. States Ins. Co., 857 S.W.2d 309 (Mo. App. W.D. 1993). Pickett provides a good discussion concerning allocation of settlement proceeds received from a tortfeasor, including payment of the lien created by § 287.150.1. See alsoRuediger v. Kallmeyer Bros. Serv., 501 S.W.2d 56 (Mo. banc 1973); Bi-State Dev. Agency v. Gurley, 101 S.W.3d 344 (Mo. App. E.D. 2003).

A workers’ compensation lien on proceeds recovered from a third-party tortfeasor is not subject to an additional reduction based on the percentage of fault...