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Disability Law

: Doherty & Progar Workers' Comp

Illinois - Workers' Compensation Lien Not Waived by Failure to Reserve it in Settlement Contract

By Michael Progar

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The Appellate Court of Illinois, First District, held that an employer's failure to specifically reserve its right in a settlement contract to file a lien against any proceeds recovered by the employee in a third party action did not constitute a waiver of the lien. The court recognized that although employers can and sometimes do waive their liens, such a waiver must be explicitly and affirmatively stated in a settlement agreement and cannot be implied by a lack of reference to that lien. Gallagher v. Lenhart. The court rejected a contrary holding of the Fourth District in Borrowman v. Prastein, 356 Ill.App.3d 546, 826 N.E.2d 600 (2005), concluding that the result of that case was contrary to general principles of contract law, and contrary to several principles behind the Illinois Workers' Compensation Act.
Offices located in Illinois, Wisconsin, and Indiana.

Full post as published by Doherty & Progar Workers' Comp on October 11, 2006 (boomark / email).

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