In a 3rd party case there is a $100k recovery, attorney fees = $36k, costs = $4k, WC lien = $40k. What is the net recovery to the IW/Petition for Credit for the 3rd party recovery?

In a 3rd party case there is a $100k recovery, attorney fees = $36k, costs = $4k, WC lien = $40k. What is the net recovery to the IW/Petition for Credit for the 3rd party recovery?

• A. $20k
• B. $36k
• C. $60k
• D. $56k

Answer: (A)

In California workers’ compensation, when a worker collects from a third party, the WC carrier has a subrogation lien for benefits paid plus any related costs and attorney fees tied to obtaining that recovery. All of these amounts are paid out of the third-party recovery before the worker receives anything. Here, the third-party recovery is 100,000. The WC lien is 40,000, and the attorney fees plus costs total 36,000 + 4,000 = 40,000. Subtracting the total deductions (80,000) from the 100,000 leaves 20,000. So the net recovery to the injured worker is 20,000.

In California workers’ compensation, when a worker collects from a third party, the WC carrier has a subrogation lien for benefits paid plus any related costs and attorney fees tied to obtaining that recovery. All of these amounts are paid out of the third-party recovery before the worker receives anything.

Here, the third-party recovery is 100,000. The WC lien is 40,000, and the attorney fees plus costs total 36,000 + 4,000 = 40,000. Subtracting the total deductions (80,000) from the 100,000 leaves 20,000. So the net recovery to the injured worker is 20,000.