When an employee settles a claim against a third party responsible for a work-related injury, the employer is entitled to a lien for the value of compensation paid and payable on a claim against the recovery from the third party. The lien is reduced by the employer’s proportionate share of the cost of collecting the third party recovery, including reasonable attorney’s fees.
The Court has held that the employer’s proportionate share should be calculated considering past benefits paid and potential future liability relieved, to the extent it can be determined. McKeeman v. Cianbro Corp., 2002 ME 144, 804 A.2d 406. The McKeeman Court predicted the issue in this case: how is the proportionate share calculated when the employer’s future workers’ compensation liability cannot be reasonably determined?
In this case, the parties suspended the Board proceedings pending resolution of the lien issue. However, the Court held that the Superior Court should have delayed ruling on the amount of the lien until after a decision was reached on the underlying claim as a Board decision may provide the Court with the information needed to determine future workers’ compensation liability. The Court therefore remanded the case to the Superior Court pending completion of the Board proceedings.
If the Board’s decision does not provide certainty to the employer’s future liability, the Court would endorse the pari passu approach, whereby an employer pays its proportionate share of costs and attorney’s fees attributable to payment of future benefits as those benefits accrue. That approach is contrary to the employee’s suggestion that the employer’s share of attorney’s fees and costs should be based on the present value of the employee’s future workers’ compensation payments, despite the fact that those payments could be speculative.