In one of the last opinions issued during its most recent term, the Wisconsin Supreme Court held that a circuit court can allow a worker’s compensation insurance carrier to accept a settlement of a plaintiff’s tort (personal injury) lawsuit against a third party who caused the plaintiff’s injury, during the course of his employment, over the protest of the injured plaintiff-employee. In Adams v. Northland Equipment Co., Inc., the Court reviewed the appeal of Russell Adams, who was injured in a snowplow accident during the course his employment with the Village of Fontana, in Rock County. Adams’ lawsuit alleged that defendant Northland Equipment negligently repaired the blade of the Village’s snowplow and this negligence caused serious injuries to Adams’ spine.

Before trial, Northland offered $200,000 to Adams and the Village’s worker’s comp insurer, the League of Wisconsin Municipal Mutual Insurance Companies (“the League”), to release Adams’ tort claims against Northland. The League wanted to accept the offer but Adams refused. The League then asked the Rock County Circuit Court to compel Adams to accept the offer. After reviewing all of the evidence presented by the parties relevant to Adams’ damages and, most centrally, the relative strength/weakness of the proof of alleged negligence, the circuit court granted The League’s motion and forced Adams to accept the $200,000, part of which was to reimburse Liberty Mutual for its worker’s compensation payments to Adams.

The Wisconsin Court of Appeals affirmed the circuit court’s decision, as did the Wisconsin Supreme Court. The supreme court held that Adams’ right to file a claim against the allegedly negligent defendant was purely a product of Wisconsin’s worker’s compensation statute – not a right that arose at common law (the source of nearly all other rights to sue for personal injuries) – and, therefore, that the circuit court had the authority and obligation under that statute to decide whether to approve Northland’s settlement offer. The statute dictates that the injured employee and his worker’s compensation insurer have “an equal voice” in the prosecution of a personal injury claim arising out of a work accident and, the supreme court said, when they cannot agree on whether to accept a settlement offer, the circuit court has the discretion to decide whether the amount of that offer is proper under all of the circumstances. For more detailed information, please read the Wisconsin Supreme Court’s decision.

Listen to the WORT 89.9 FM “Labor Radio” show interview with Aaron Halstead (around 18:15-21:44).

Aaron Halstead

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