Arkansas Penalizes Workers’ Comp Carriers For Asserting Their Statutory Right Of Subrogation

When it comes to the apparent evils of workers’ compensation subrogation, the state of Arkansas truly believes that all an injured employee ever wants is a fair advantage.

In Liberty Mutual Ins. Co. v. Youngblood, 2020 WL 5542443 (Ark. App. 2020), it was argued that § 11-9-715 does not allow attorneys’ fees to be awarded outside of proceedings before the Workers’ Compensation Commission.

The Court of Appeals disagreed and held that even requesting that the plaintiff prove that the employee was not made whole can lead to liability for the plaintiff’s attorneys’ fees.

The court stated:

As an intervenor asserting a subrogation lien in the third-party lawsuit, Liberty was provided with Youngblood’s medical information as well as the confidential settlement information. However, Liberty refused to withdraw its lien after the settlement agreement had been finalized. Not until Youngblood’s attorney filed a motion to dismiss Liberty from the lawsuit did Liberty request a made-whole hearing. At the made-whole hearing, Youngblood was required to incur legal expenses to preserve the benefits he had been awarded and to force Liberty to release its lien.