New case – Gallagher v. Lenart: The Illinois Supreme Court made it clear that an employer’s waiver of a workers compensation lien must be clearly stated in the workers comp settlement contracts (the pink ones). The law used to be that an employer had to explicitly reserve its right to a lien under Section 5(b) of the Workers Compensation Act by stating so in the contract if the employer settled a case when it knew a third-party action was pending. This is no longer true.
This is important because it overrules Borrowman v. Prastein, 356 Ill.App.3d 546 (2005). For workers compensation practitioners, it is important to always read the settlement contracts, and if a lien waiver was part of the agreement, be sure that fact is spelled out in the contract.
(Howard Zimmerle is a Rock Island and Moline Workers Compensation Lawyer)