In fall 2024, Nevada’s Supreme Court overruled 38 years of precedent concerning how workers’ compensation liens are resolved in personal injury claims. Nevada’s Senate has now passed a bill to limit the amounts workers’ compensation carriers can recover and provides a system to decide the lien amount. The bill now goes to the Assembly for consideration.
Background
As discussed in a prior article, from 1986 through fall 2024 the Breen formula that the Supreme Court created governed how injured workers and their workers’ compensation carriers determine how much of a workers’ compensation lien needed to be repaid after a personal injury recovery. AmTrust North America, Inc. v. Vasquez overruled Breen because the formula conflicted with NRS 616C.215 and did not work. “Here, the Breen formula failed to provide a net positive recovery for AmTrust, demonstrating that it is mathematically flawed and unworkable.”
When applied in this case, it produced a “net negative recovery for AmTrust” while producing “a double recovery” for the worker. Instead, injured workers were instructed to follow NRS 616C.215(5), stating that the workers’ compensation carrier “has a lien upon the total proceeds of any recovery from some person other than the employer, whether the proceeds of such recovery are by way of judgment, settlement, or otherwise.” It also specifies that injured employees “are not entitled to double recovery for the same injury.”
Senate Bill 258 as Amended
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