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Overlooked comp lien brings $5M settlement


An injured employee whose lawyers unwittingly scotched his workers’ compensation award has settled legal malpractice claims for $5 million.

The lawyers allegedly overlooked the need to involve the workers’ comp insurance company when they resolved a related product liability claim.

Details and names were not available due to confidentiality provisions of the settlement, but a settlement report offered a basic account of the case.

The plaintiff suffered complications from an accident at work that initially left him with bilateral leg contusions. His condition became far worse, with a diagnosis of complex regional pain syndrome. He was confined to a wheelchair and deemed permanently totally disabled, entitled to lifetime indemnity and medical benefits.

He had an open award through the Virginia Workers’ Compensation Commission, with his lifetime benefits estimated at around $6 million.

However, the plaintiff then sued a product manufacturer whose product was involved in his accident. After reaching a settlement, the plaintiff’s lawyers, from two different firms, allegedly dropped the ball on a key consideration.

They failed to notify and seek permission of the workers’ compensation carrier prior to entering the settlement. As a result, the comp commission terminated the plaintiff’s open award.

Virginia Code § 65.2-309 provides for a lien and a subrogation right for the employer in any claim against a third party for workplace injury.

Negotiations reportedly focused on damages. The defendant law firms in the legal malpractice suit asserted that the plaintiff had a reduced life expectancy, did not require 24-hour attendant medical care, and did not require other items of care as a result of the plaintiff’s disability.

The plaintiff claimed a $6 million loss, but – after mediation with retired U.S. Magistrate Judge B. Waugh Crigler – the parties settled for $5 million.

The plaintiff was represented in the legal malpractice case by Roanoke attorneys Matthew W. Broughton, Gregory D. Habeeb and Andrew D. Finnicum, along with Fishersville attorney George L. Townsend. Lawyers at Gentry Locke submitted the settlement report.